Walt Disney Company Analysis | Five Forces and SWOT

Walt Disney participation Analysis Five Forces and SWOTMultinational quite a little (MNC) is a deep comp some(prenominal) with plants or other direct coronation in atomic number 53 or more(prenominal) oversea countries. In the same(p) way, it is likewise c whollyed a transnational corporation or an impertinent corporation. The multinationals comm single provide technology, finance with child(p), and marketing skills in drop on a profit subject market and where they operated in developing countries. However, fifty-fifty the high order industrial nations whitethorn be the scenes of investment by multinational companies. The multinationals develop big c sufficientman that can influence over the foreign governments. It has been the criticism address, hardly umpteen host countries have imposed regulations and given them a bigger sh atomic number 18 of profits, jobs, and markets. (Investments Income, 2007-2010)Multinational corporations can be categorized into thre e types structured according to the structure of their intersection pointion instruments, such as horizontally unified multinational corporations, vertically combine multinational and diversified multinational corporations. horizontally integrated multinational corporations manage production establishments fixed in incompatible countries to adduce the same or similar products, wish McDonalds. Vertically integrated multinational corporations manage production establishment in certain unpolished/countries to produce products that serve as input to its production establishments in other country/countries, like Adidas. Diversified multinational corporations manage production establishments rigid in dissimilar countries that are neither horizontally nor vertically integrated, like Microsoft. (Investments Income, 2007-2010) guild Information2.1 association HistoryThe Walt Disney union (NYSE DIS) is the snatch largest media and fun corporation in the world, after Time War ner. It founded on October 16, 1923 by brothers Walt and Roy Disney as a small animation studio. But now it has become ace of the biggest Hollywood studios, and averer of el eve theme lay and several television receiver earningss, including the American Broadcasting political party (ABC). The Walt Disney friendships corporate headquarters and primary production facilities are located in California at the Walt Disney Studios (Burbank). The headquarters is located in USs large-scale multinational corporation. The primary return manufactures including the enjoyment program, thing park, toy, restrains, computer game and media net consummation. The philosophers stone movie connection, the Miramax movie, Hollywood Movie confederacy ( keep company), the abundant great audio and video product, the ESPN sports, the ABC television network all is its uneven under company brand. (Usahm.net, n.d)Since its founding in 1923, The Walt Disney keep company and its affiliated companies have re master(prenominal)ed faithful to their commitments that produce unparalleled pleasure experiences. It establish on the rich legacy of quality creative content and portentous storytelling. The Walt Disney association, together with its subsidiaries and affiliates, is a leading diversified world(prenominal) family entertainment and media initiative with four business segments, such as media net deeds, parks and resorts, studio entertainment and consumer products. (disney.com, n.d)2.2 Company StructureWalt Disneys Creative Organization Chart(Source Kuang, C., 2009)Roy Disney was fighting for a strangely organized company that the Walt Disney Company readyd in many aspects. It depended to fine-tune remark suitable ideas rather than hovering profits. In other words, check out his cheek chart of Disney under Walt Disneys Creative Organization Chart (above). (Fast Company, 2010)As At Issue signals out, this wasnt your standard pyramidal corporate hierarchyit was one used to swelled autonomy to the good deal. And it actually making the adopts, and letting each of their take in fermentes works out themselves. Naturally, as Disney grew into a corporate behemoth, that organization was swept past in favor of layers of VPs and SVPs. Hence, Disney never makes movies again like they used toJust as Roy invariably argued. (Fast Company, 2010)3 world(prenominal)ization3.1 DefinitionGlobalization is the system of fundamental interaction among the countries of the world in order to develop the spheric economy. Globalization depends on the consolidation of economics and societies doneout the world. Globalization involves technological, economic, political, and cultural exchanges made affirmable largely by advances in communication, transportation, and infrastructure. (Hubpages Inc., 2010) at that place are two different types of integration, such as negative integration and tyrannical integration. Negative integration is breaking down of the trade ba rriers or protective barriers such as tariffs and quotas. The migration of barriers can be profitable to a country if it al busteds for products that are cardinal or essential to the economy. For example, by removing barriers, the cost of raw materials imported leave decrease and the supply will increase. Therefore, it can make cheaper to produce the last products for export (like electronics, car parts, and clothes). (Hubpages Inc., 2010)Besides, positive integration is used to standardize the international economic laws and policies. For instance, a country which has its own policies on taxation trades with a country with its own set of policies on tariffs. In the same way, these bad-tempered countries must have their own policies on tariffs. By following the positive integration and the continuing growth on the influence of globalization, these countries will process on having similar or identical policies on tariffs. (Hubpages Inc., 2010)3.2 Impacts of GlobalizationGlobal to urism is maybe the most obvious performance of a shrinkage world to the western citizen. It allows short term travel to almost any part of the world, an avenue for greater social and cultural awareness and understanding. Vacations may now only a couple of days, instead of the month longsighted tours on past centuries, no longer the domain of the ultra cockeyed with increasingly cheaper flights. Disposable income and unfilled time increased have charge the western citizen to travel beyond national borders cheaply and easily. The Walt Disney Company manages the worlds largest spend resort Walt Disney World in Orlando, Florida, as well as managing the carousel eight most visited theme parks in worldwide (TEA, 2010), occupying the leisure tourism market. It is significant to recognize that all the worlds offerings, so many people choose to vacation at Disney resorts. Even in the richer countries, tourism is genuinely often a luxury unaffordable of the majority, e pickyly regular international traveling. (Disney, 2010)Disneys power is dramatic. It will able to pressure governments of many major countries. Firstly, when Disney decided to create a central Asian resort, the company decided sites in China, randomness Korea, Singapore and India in order to set in Hong Kong (TNF, 2010). Disney was able to walkover offset the majority of countries against one-a nonher as to secure the greatest financial pull ahead for the Walt Disney Company. A outline is previously exercised in Europe (primarily between France and Spain) for Euro Disney (Lainsbury, 2000), and earlier that in California between the city councils of Anaheim and Long Beach for their second California park (Blue Sky Disney, 2007). In Hong Kong, Disney was able to secure a 43% stake in the resort, even if the contri barelyion is less than 20% of the construction costs (Balfour, 2009) due to the enormous tourist boost Disney would endorsement (Hong Kong, 1999). (Disney, 2010)Globalization seems t o have produced a commoditized, corporate-controlled experience of the world. For instance, being the relatively novel Disney tour company Adventures by Disney. The Walt Disney Company applies the unlimited practices of its theme parks to real locations in pre-arranged itineraries such as Peru Vacation and Cities of Knights and Lights in capital of the United Kingdom and Paris (Disney, 2010). Convenience and luxury replace uncertainty, providing the experience of backpacking disaster in a controlled manner efficaciously, and its all lead by inner Disney guides. For Adventures by Disney, perhaps the world isnt shrinking and the uninteresting parts are simply being cut out. For better or worse, what was once strange and unusual is now becoming a tourist hotspot, where real glossiness is replaced in favor of tourist expectations and demands. The tourist gaze empowers the tourists contri hardlyion to the symbols of a culture unwisely. (Disney, 2010)Whether globalization is truly g lobal, or simply an expression of Americanization, is uncertain. In terms of the Walt Disney Company, it is proudly American. The company devotes Disneyland to the ideals, the dreams and the hard facts that have created America, in the desire that it will be a source of joy and inspiration to all the world (Marling, 2004). Disney is not only benefitting from this Americanization, but spreading it or even forcing it in some cases. Disney are adopting and selecting which elements they wish to claim as their own in line with westward ideologies. Probably in the future, this may balance, but as present there is certainly an American, or at least, Western governance. As so many of the folk stories and fairytales that had inspired, the designers of Disneyland Paris planned their bewilder honestly to be a gift of the best of Americana to Europe, and sharing American culture with the continent that had provided Walt Disney. The gist is a combination of genuine international communicatio n, and business practices. (Disney, 2010)Porters Five Forces Model4.1 Threat of New EntrantsSince the Walt Disney Company has been able to find a real unusual niche within the patience, the hitch barriers are high relatively. The company is able to grow over a long term period, and has to develop from the departments of Research and Development (RD), marketing, and finance. By depending on past experience, the company officials know to a large extent what the target customer wants. (scribd.com, n.d.)Threat of SubstituteThe products or services are check over to low. Other cartoon figures, theme parks, and movies can search the market in which the Walt Disney Company is operating in, but this is obviously representing a significant threat. The Walt Disney Company has placed outlay controls on many of its product lines already, and should be able to cope with other tender competitors. However, by upgrading products and services, the threat alone of new entrants into the market r equires the Walt Disney Company to besiege against such risk by simultaneously. (scribd.com, n.d.) negociate Power of SuppliersThe suppliers are governed by a few companies as the Walt Disney Company is operating in a highly differentiated and curious exertion with high switching costs associated with operations. Besides, they are most probably really concentrated. However, the Walt Disney Company is a unique company and important customer of many suppliers. Furthermore, the size of the company may be a great emolument certainly. The company will create a dependency relationship in the industry by being able to order large volumes of unique products from unique suppliers. (scribd.com, n.d.)Bargaining Power of BuyersThe bargaining power of buyers is high in the service and in the entertainment industry. The customers have powers certainly since a large number of customers are needed to make the Walt Disney Companys operations run smoothly. For example, if the price on a particul ar home video is too high, customers may be averse to spending the money needed to purchase the products. other example is the entrance fee charged at the Walt Disney Companys theme parks. Furthermore, the entertainment industry does not take the buyer money, even if it is planned in a way that it will make the buyer spend more. A majority of the Walt Disney Companys product mix focuses on intangible returns of the buyers money. However, some customers may not realize that they are getting such a return may increase the bargaining power of the customers. (scribd.com, n.d.)4.5 Rivalry among Existing FirmsIt does not play a in truth important role in the Walt Disney Companys remote operational environment. Nevertheless, it is confessedly that the companys exit barriers are extremely high. Furthermore, capacity is expand in extremely large investments. However, there are no walk-to(prenominal) direct competitors to the Walt Disney Companys operations. Competitors such as Lonely Tun es retail stores do not search to appoint themselves to expensive advertising campaigns in order to come up market shares. Moreover, the Walt Disney Companys products are highly differentiated. The switching costs are wherefore quite significant. A multinational corporation such as the Walt Disney Company faces internal weaknesses and strengths, which can to a certain extent be controlled. The external forces such as opportunity and threats are more difficult to control, and the Walt Disney Company has to adopt and take advantage to those forces. (scribd.com, n.d.)SWOT analysis5.1 StrengthThe Walt Disney Companys main strength is in its resources, its experience in the business, and its low-cost strategy. Besides, the company has veritable cl premature a very strong and well known brand-name through many years. The company has also been able to diversify its operations and products to hedge against decreasing sales in product lines. In late years, it has categorized into Home V ideo, Film, merchandise, Radio broadcasting, Net-work television and in theme parks. It has also effectively diversified globally its operations from USA to Japan and Europe. The main strengths in internal resources relate to human resources and financial stability. Employees in the Walt Disney Company studies appear to be extremely creative and they have produced several box-office productions in these recent years. A company without new ideas is bounded in todays competitive business environment. However, the low-cost-corporate-strategy is a benefit for the company. The company can control costs, and still produce quality goods and services. Financial risks have been minimized by sharing sign investment costs with a maximum number of outside participants. (scribd.com, n.d.)WeaknessesCorporations always have internal weaknesses. The Walt Disney Companys main weaknesses are the following A very large work load, often changes in top- focussing, and high overhead expenditures. The co mpany has 58,000 employees in 1991. This fact represents possible communications problems, and a high bureaucratism level through the corporation. The companys work load will increase even larger, and the organizational structure has to be able to support an extension of the work load by varying into more businesses and niches. The company has a very frequently changes and its corporate officers makes the corporate structure even more difficult. There are many positive things that often changes, but the changes are also associated with resistance, and high expenses. (scribd.com, n.d.)OpportunitiesExternal opportunities should be recognized, analyzed, and responded to in a very early stage. The Walt Disney Company is facing several external opportunities. However, the external threats facing the company are out-numbering the opportunities. Opportunities accommodate the following positive government attitudes towards its operations, barriers of entry are significant, and include the entertainment industry itself. Legal and legislative forces are usually identified as negative external factors to the company. Furthermore, the French government contributed greatly in the Euro Disneyworld see in the Walt Disney Companys case. The French government invested in the project to built communication facilities, and gave the Walt Disney Company tax reliefs on cost of goods interchange accounts. In addition, since the barriers of entry into the highly specialized industry in which the Walt Disney Company is still operating, competition will find it difficult to penetrate the companys highly diversified product or service mix. Therefore, large initial capital investments are required to enter the industry accordingly. (scribd.com, n.d.)ThreatsMajor threats to the Walt Disney Company include the following Over saturated markets, politics and economic aspects from a global perspective, and foreign competition. As the supply of products and services in the entertainment in dustry is starting to saturate the markets, competition will be more exciting, and only the most powerful companies will be able to survive finally. The Walt Disney Company has leveraged this risk to a certain level as it has diversified and globalized its operations, but still, the company is in the service/entertainment business. The Cable-giants such as food turner Broadcasting Systems (TBS) may not be able to manage the emphasis on its operation such as the Network-television division. (scribd.com, n.d.)StrategiesThe Walt Disney Companys corporate level strategy is based on a horizontal and scattered informal care approach. Ideas are born within the departments and are processed throughout the low hierarchy relatively from the final decisions. The management is placed on separate creativity and in teamwork. For example, the most creative employees usually met the target in the purpose of generate with new ideas and new business strategies. As seen in this example, a large emp hasis is focused on employee participation, especially on the most talented employees. Furthermore, the company is always refreshing its top management with new executives. Top-flight managers from the entertainment corporation and the financial business presuppose new ideas and concepts which can be applied in the Walt Disney Company. There is heretofore a significant increase in expense attached to attracting the very best to join the company. This increase in expense is related to special perk-packages directly, higher bonuses and escalated salaries that are offered to the top-executives. (scribd.com, n.d.)Another interesting strategy is the focal point that is focused on enhancement of the business. The corporate policy is to grow belatedly instead of impress others. It is important for the company to meet demand with a sufficient supply of goods and/or services. It can be accomplished by effective distribution channels and marketing department. This leads us to another corpo rate policy, efficiency and suppression. Recently, movie industry trend towards increase in costs rapidly, it have a direct effect on the profitability of the company. By reducing the costs involved in making and marketing Disney films, it is cheaper and more profitable movies can be produced. Efficiency enforced by unwavering budgets and expected high returns, Disney must be able to produce more efficiency and cheaper than its competition. (scribd.com, n.d.)In addition, the corporate strategy is clearly focusing on diversifying its products and services. The expansion overseas rapidly and an increase in the product and service mix have created an umbrella effect. Thus, risks have been reduced and minimized. If one product line fails, other product lines have to cover for its losses. (scribd.com, n.d) The Walt Disney Company is able to produce more and more products to the others countries which do not have Disneyland. preferably of going toward the countries that have Disneyland, the customers also can buy the Disney products in their own countries.ConclusionAs a conclusion, Walt Disney is a master in globalization. It is one of the largest companies on the planet. Disney markets worldwide itself, creating big amount of revenues and further establishing itself as a global brand. It brand has been further developed as a result of merchandising. Merchandising has played a huge role in establishing the brand. (Suite101.com, n.d.)An important factor in the success of Disney has been the integrated nature of its products, with synergies between film and television, between media and theme parks, and between theme parks, hotels and resort operations, according to the 1998 book Embracing and Managing Change in Tourism A Globalised Theme honey oil Market? The Case of Disney in Europe. (Suite101.com, n.d.)8 ReferencesWEBSITESMultinational corporation (MNC) Online obtainable athttp//www.investmentsandincome.com/investments/multinational-corporation.htmlAssessed 11s t November, 2010The Walt Disney Company Introduction Online on tap(predicate) athttp//www.usahm.net/news.asp?id=86Assessed 1 tertiary November, 2010The Walt Disney Company Overview Online Available athttp//corporate.disney.go.com/corporate/overview.htmlAssessed 13rd November, 2010The Walt Disney Company Structure Online Available athttp//www.fastcompany.com/blog/cliff-kuang/design-innovation/roy-disney-ripAssessed 15th November, 2010Definition of Globalization Online Available athttp//hubpages.com/hub/Definition-of-GlobalizationAssessed twentieth November, 2010Impacts of Globalization Online Available athttp//www.theneverlandfiles.com/misc/ColeYoungerDisneyGlobalization.pdfAssessed 20th November, 2010Porters Five Forces Model Online Available at (function() var scribd = document.createElement(script) scribd.type = text/javascript scribd.async = true scribd.src = https//www.scribd.com/javascripts/embed_code/inject.js var s = document.getElementsByTagName(script)0 s.parentN ode.insertBefore(scribd, s) )() Assessed 28th November, 2010SWOT analysis Online Available at (function() var scribd = document.createElement(script) scribd.type = text/javascript scribd.async = true scribd.src = https//www.scribd.com/javascripts/embed_code/inject.js var s = document.getElementsByTagName(script)0 s.parentNode.insertBefore(scribd, s) )() Assessed 3rd December, 2010The Walt Disney Company Strategies Online Available at (function() var scribd = document.createElement(script) scribd.type = text/javascript scribd.async = true scribd.src = https//www.scribd.com/javascripts/embed_code/inject.js var s = document.getElementsByTagName(script)0 s.parentNode.insertBefore(scribd, s) )() Assessed 6th December, 2010Conclusionhttp//www.suite101.com/content/disney-and-globalisation-a196391ixzz17mk5w65JAssessed seventh December, 2010PICTURES, IMAGES AND PHOTOGRAPHSWalt Disneys Creative Organization Chart, 2009. Chart. Electronic print Availabl e athttp//www.fastcompany.com/blog/cliff-kuang/design-innovation/roy-disney-ripAssessed 15th November, 2010Disney and Globalisation, 2010. selling the Brand. Electronic print Available athttp//www.suite101.com/content/disney-and-globalisation-a196391ixzz17mk5w65JAssessed 15th November, 2010Walt Disney, 2008. Header Logo. Electronic print Available athttp//www.toxel.com/design/2008/08/20/20-famous-logo-designs/Assessed 6th December, 2010Disney Motion Picture Art, 1998-2010. Collections. Picture Available athttp//www.motionpictureart.com/Disneyana-p-1-c-35.htmlAssessed 6th December, 20109 AppendicesAppendix 1Source Walt Disney, 2008