The Walt Disney Company is one of the leading international entertainment organizations. It is famous all over the world for its animated films, movies, and TV series, as well as for Disneyland and Disney World amusement park, branded clothing for children, toys, and accessories. Despite occupying a favorable position in the global entertainment market, Disney faces severe competition from other corporations and needs to use a variety of strategic management and marketing tools to remain profitable. This paper will provide an analysis of the Walt Disney Company, focusing on its financial performance, management, marketing, and corporate social responsibility.
Walt Disney was an American animator who became famous throughout the country after creating an iconic cartoon character Mickey Mouse. However, the Walt Disney Company was founded years before that by Walt and his brother Roy (“Disney history,” n.d.). The organization focused on producing cartoon animations and series, creating its first feature film, Snow White and the Seven Dwarfs, in 1937 (“Disney history,” n.d.). After the end of World War II, Walt Disney continued working on feature-length animations, releasing several notable films in a row, including Alice in Wonderland and Peter Pan.We will write a custom Disney: Company Analysis specifically for you
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The expansion of Disney from animation into other areas of the entertainment industry began with the opening of the first Disneyland. The success of the amusement park encouraged the company to open more facilities after Walt and Roy Disney’s death in 1966 and 1971 (“Disney history,” n.d.). The new management continued realizing Walt Disney’s vision by releasing more animated films and series, as well as by opening Walt Disney World. Today, Walt Disney Company owns several large studios, including Disney and Marvel Studios, as well as some music labels, TV channels, and production companies (“Disney history,” n.d.). Therefore, the company’s aggressive expansion strategy has helped it to achieve a leading position in the international entertainment market.
The financial analysis is based on the data provided in the 2018 Annual Report released by Disney. The corporation’s revenues constituted $59.43 billion, a positive change from $48.81 billion in 2014 (The Walt Disney Company, 2018). The net income had also increased substantially, from $7.5 billion in 2014 to $12.6 billion in 2018 (The Walt Disney Company, 2018). These figures indicate that the company had managed to gain more profits without a comparable increase in costs and expenses. Indeed, according to Disney (2018), the growth in costs and expenses was not substantial given the scale of the corporation’s operations: from $41.2 billion in 2016 to $44.5 billion in 2018.
The company also has enough assets to cover its liabilities, which means that it has good solvency. However, the current liabilities of the corporation are slightly higher than its current assets, which might lead to liquidity issues in the future (Kelly & Williams, 2018). Overall, Disney is a profitable company that does not face significant financial risks and will most likely continue to increase its profits over time.
Current Top Management
The current top management of the company consists of the management team and the Board of Directors. In the management team, every individual is responsible for a different line of business activity. For example, Bob Chapek is the Chairman of Parks, Experiences, and Consumer Products, and Alan F. Horn is the Chairman of Walt Disney Studios (The Walt Disney Company, 2019). The Board of Directors consists of 11 persons who are not part of the management team. Therefore, the Board of Directors is a strategic decision-making structure that judges on the company’s future direction of development, whereas the management team is responsible for ensuring excellent performance in each line of business.
Disney’s marketing strategy is the primary force that enables the company to continue expanding its global market share. The first premise of Disney’s marketing plan is targeting the most profitable market segments in the entertainment industry through engaging content (Schoultz, 2017). Films and animations produced by Disney appeal to a broad number of customers, from children to adults. Recently, Disney committed to producing live-action versions of its most successful feature-length animations, such as Cinderella, Alice in Wonderland, Aladdin, and many others. While these films appeal to children due to high-quality visuals and exciting plots, they also attract adults who used to watch Disney animations when they were kids.
The second aspect of Disney’s marketing plan is to use promotions and advertisement heavily to raise awareness of upcoming projects (Schoultz, 2017). Most of Disney’s projects are advertised long before their release, which makes the customers wait and increases their excitement when the project is finally released. Lastly, Disney’s marketing strategy is focused on relevance in the contemporary world. This means that the company engages in market research to determine consumer preferences and opinions. For instance, many feature films and animations released by Disney over the past few years also explored topics of vast social importance, such as racism, gender inequality, and LGBT rights. This ensures that the company does not lose its relevance and fosters a positive corporate image.Get your
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Ethics and Social Responsibility
Disney’s reputation is also significantly affected by the company’s ethical decision-making and corporate social responsibility. Disney addresses these two aspects of the business by reducing its environmental impact, engaging customers in volunteering, donating to charitable organizations, and maintaining fair working conditions for employees. For instance, The Walt Disney Company (2017) reports that between 2012 and 2017, the corporation was able to reduce net emissions by 41% and diverted 46% of waste from landfills and incineration.
Despite increased capacity, Disney (2017) was also able to maintain water consumption rates at the 2013 level, contributing to global water conservation efforts. The company also monitors working conditions in U.S.-based and international production facilities, preventing child labor and ensuring fair pay for all workers.
The company’s key strengths are its established brand, a strong marketing strategy, and excellent knowledge of consumer preferences. It is also important that Disney is performing well financially since this enables the company to continue its expansion efforts. The company’s weaknesses are the reliance on the United States entertainment market and poorly developed distribution networks in some other countries. For instance, Disneyland amusement parks are only present in the United States, China, Hong Kong, Japan, and France, although they could be popular in other locations, too.
The main threat for Disney is the severe competition in the entertainment sector since other global corporations are providing the same services and products to customers. Piracy and copyright violations also affect the company’s financial performance. In this context, the two crucial opportunities for Disney are to invest in its global distribution chain and to gain a larger market share in the gaming market. The market for mobile applications and computer games is expected to grow following the popularization of virtual reality technologies. Establishing a strong presence in this new market would help Disney to secure its position in the entertainment industry.
Overall, Disney is a highly profitable corporation occupying the leading position in the international entertainment market. The history of Disney shows that the company’s success was greatly influenced by its aggressive expansion strategy and excellent marketing. Nevertheless, in today’s context, Disney faces threats of competition and piracy, which might affect its future performance. The company should address its weaknesses by improving its global distribution chain and taking advantage of emerging opportunities in the entertainment industry.
Disney history. (n.d.). Web.
The Walt Disney Company. (2017). Corporate social responsibility update 2017. Web.We will write a custom
Disney: Company Analysis
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The Walt Disney Company. (2018). 2018 annual report. Web.
The Walt Disney Company. (2019). About the World Disney Company. Web.
Kelly, M., & Williams, C. (2018). BUSN10: Introduction to business (2nd ed.). Boston, MA: Cengage Learning.
Schoultz, M. (2017). Secrets to the remarkably innovative Disney marketing strategy. Web.