SWOT Analysis of Disney (2019)

Company: Walt Disney
CEO: Robert Iger
Year founded: 1923
Headquarter: Burbank, California, USA
Number of Employees (2018): 201,000
Type: Public
Ticker Symbol: DIS
Market Cap (Aug 2019): $255 Billion
Annual Revenue (FY18): $59.43 Billion
Profit |Net income (FY18): $12.6 Billion

Products & Services: Television Programs | Motion pictures | Plays | Musical Recordings | Books | Magazines | Video Games | Toys | Apparel | Accessories | Footwear | Home Décor | Cosmetics | Consumer Electronics | Stationery | Radio Networks | Radio Stations | Resort Vacation Club | Cruise Lines | Theme Parks | ABC | ESPN

Competitors: CBS | Sony | Comcast | Viacom | Time Warner Cable

Fun Fact:Did you know that Walt Disney’s first original character was a rabbit named Oswald?

An Overview of Disney

When it comes to entertainment production for cartoons, Walt Disney Studios is one of the most successful and most recognized companies in the world. Currently, Disney Studios has an Umbrella Corporation, which has grown exponentially in the past nine decades. Disney Studio’s magical vision was idealized by two brothers, Walt Disney and Roy O. Disney.

They have also been recognized with titles like Walk Disney Productions. Walt Disney is responsible for some of the most iconic stories like The Lion King and Alice in Wonderland.

In this post, we will highlight the Walt Disney SWOT Analysis, providing insights into Disney’s major achievements, goals, and current conditions.

The report covers Disney’s strengths, weaknesses, opportunities, and any current or potential threats.

Disney SWOT Analysis Report

The SWOT Analysis of Disney is given below:

Disney’s Strengths – Internal Factor

1. Reliability – Disney has strong ties with its suppliers who provide high-quality raw materials for the company’s production line.
2. Large Cash Flow – Disney has a very strong cash flow system that allows the company to make additional investments in other regions of the company. As of end of 2018, they had a total operating cash flow of 14.3 billion.
3. Strong Negotiation Skills – The Company has established strong networks and negotiated deals to set up distributors and dealers throughout the United States.
4. Proficient Team – Disney has some of the most creative teams that consist of artists, story scriptwriters, and graphic designers. The qualified teams are a mix of experienced professionals with extensive years of experience in the mass media industry.
5. High Brand Value – Disney’s brand name and their logo are easily recognizable. All movies and products that are introduced to the public, usually have the “D” symbol somewhere to show that it’s from Walt Disney Studios, Production, or Company. According to Forbes world’s most valuable brands list, Disney is ranked at number 8 position and its brand value is estimated to be $52.2 Billion.

Disney’s Weaknesses

1. Sky-High Attrition Rate – Walt Disney Company has spent enormous amounts on training and grooming their employees. It has still not improved its high attrition rate.
2. Poor Financial Planning – According to company’s 2018 annual report, Walt Disney has reported a loss of over $ 1 billion. Loss of $580 million due to investment in Hulu and loss of $469 million due to its investment in BAMtech streaming technology.
3. Vulnerable To Competitors – The lack of marketing and promotion could leave Disney vulnerable to competitors. The only time they use ads is when they are introducing another movie or toy. Apart from that, most marketing is done visually, through cross promotion.
4. Insufficient Product Demand Scaling – Disney product designers have poor judgment for the “next-big-idea,” which leads Disney to lose many opportunities compared to its competitors. Whenever there is a serious demand, companies take advantage by coiling up a campaign in relevance. However, Walt Disney fails to take advantage of such opportunities.

Disney’s Opportunities – External Factors

1. Gear Up for Marketing – If Disney decides to make a change in investing in marketing, it could change the many opportunities that they have missed, and possibly stir up new prospects.
2. Core Competencies – With Disney’s expertise in the mass media industry, their set of skills can help innovate technologies and other relative aspects.
3. Big Names Are Worth It – Disney is the number one company for a lot of children and adults who grew up during the Walt Disney era. Disney alone is a perfect branding source that can be used as an alternative to promote further and market a business. Partnering up with Walt Disney Company is a beneficial move that any company can make.
4. Disney’s online streaming service: (Disney+) – Disney is developing a new Direct-to-consumer (DTC) service “Disney+” that will feature all Disney, Marvel, Star Wars, and Pixar movies. Disney+ is expected to launch in the US market in late 2019. The service could potentially give a tough fight to Netflix with its massive collection of movies and shows. Additionally, Disney+’s basic subscription plan starts at $6.99 per monthcompared to $8.99 for Netflix. Overall, it is good for consumers because we will have more options and competition may bring the prices down.

Disney’s Potential & Ongoing Threats

1. High Expense Toll – Disney has always spent large amounts on their workforce, employee development, and training. Currently, the average salary offered for a beginner at Disney is $15 an hour. Salary wages around the globe are continuously increasing. With salary wages rising by the country’s law, Disney could end up with lower profits when it comes to paying off their external workforce in foreign countries.
2. Isolation in America – Due to the many ongoing issues with other countries, most of the administration is trying to pull out of international contracts. It includes many manufacturers. A portion of Disney’s manufacturers are in foreign countries, if the isolation phase continues, Disney could be under pressure to gain sufficient profits.
3. Better Products & Technology – Since they are kings in mass media production, the technology could be beneficial for them. Disney isn’t a technology or a software house and therefore cannot make technology to work specifically for them.

As technology progresses, the use of viewing entertaining content has become accessible through smart devices, which is something that Disney lacks in. The only way they can retain a safe zone is to design an application that would provide Disney content only through subscription.

Conclusion

Disney was established in 1923 and is still standing strong. They started with a vision to provide wonderful classical content in the form of 2D cartoons. Over a period of 95 years, they have become an iconic company, reaching out to the hearts of billions.

It is unlikely that Disney will vanish anytime soon. They are in high demand for their products and especially their animated movies. Disney has acquired enough companies and has enough cash flow to sustain their company for the years to come.