SWOT analysis of Disney
Diversified product and service portfolio
The five segments of Disney made its’ wide portfolio a strength. The media network segment owns television, radio and cable properties in the US and other countries (Datamonitor 2010). The consumer products segment partners with manufacturers, publishers and retailers to design, promote and sell products based on new and existing Disney characters. The media segment of the company creates and delivers lifestyle content across media platforms. (Datamonitor 2010).
Portfolio of well known brands
Disney brand was ranked 9th in the Top Global Brands ranking of the BusinessWeek magazine and Interbrand, with the brand value of $28.731 million, in 2010 (Datamonitor 2010). Disney is a strong brand on its own, but its portfolio compromises many other strong brands such as ESPN, which is one of the most popular sports channels worldwide. The company’s portfolio also incorporates brands such as Pixar and Touchstone. When presented with new products, consumers might find it easier to accept these if promoted by a strong brand.
Substantial consumer infiltration of the cable network segment
Disney’s cable network produces its own programs and/or acquires rights to programme from other producers and rights owners of other network listings. Some of the company’s most significantly penetrated cable properties as of FY 2008 include ESPN with 99 million subscribers; ESPN classic with 64 million subscribers; ESPNEWS with 70 million subscribers; Disney Channel with 98 million subscribers; Toon Disney with 74 million subscribers; and ABC Family with 98 million subscribers (Datamonitor 2010). This is an important segment for Disney because through its platform it can cross-sell its other businesses. This in turn leads to higher revenues, and therefore Disney keeps it under strict control.
Poor results of the studio entertainment segment
The studio entertainment segment has observed a high decrease in revenues in the years 2007-2010. In addition to its decline in revenues it has also been contributing the least, together with the interactive media segment to the company’s profit. Figures from DataMonitor (2010) demonstrate a decline in revenues of 16.5%, a decline at an annual rate of interest of 10% (DataMonitor 2010). This might suggest that the company could be losing its competitive advantage in its sector.
High reliance on North American and Canadian markets
Although Walt Disney operates in various part of the globe (U.S.A and Canada, Europe, Latin America and Asia Pacific), its main profits are gained from U.S.A and Canada. In 2009 North America represented 76.1% of its profits, while the remaining countries produced only 7.3% of its income (DataMonitor 2010). North American markets are in maturity stage, where they can either remain or proceed to a decline. The possibility of a decline increases the risks of future decline in Disney’s revenues. Disney should therefore consider strengthening its marketing position in the international market.
Acquisitions could increase and strengthen the company’s position in the entertainment segment
In the past years Disney has made several strategic acquisitions which have enlarged the company’s position within the family and kids media markets. Some examples have included Playdom, an online social gaming company; Marvel Entertainment, owner of strong brand characters which include Hulk, Spider-man and the Fantastic Four; and WideLoad Games, a developer of interactive entertainment.
Further acquisitions could prove as successful and Disney could create synergies between its’ acquired companies to increase its revenues.
Disney has high competition in some of its main segments. Its broadcasting division competes with companies that also have a strong market presence such as Fox and CBS. Its resorts compete with other resorts and parks especially within the U.S.A. In respect to advertising it competes with other types of media such as magazines, radio and newspapers. High competition is a threat as it might reduce Disney’s market share in some of its segments.
Increase of piracy
Thanks to the increased internet speed, the unauthorized distribution of films and television programmes has increased rapidly. As a result, the enforcement of intellectual property rights has become highly challenging. Thus, the effect it has on profitability will increase.
Any media and broadcasting company will have to adhere to high regulations, be it in the US or overseas. Thus, changes in regulations may signify spending further amounts to adhere to these and to reduce the risk of breaking the law.