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The Walt Disney Company Case Study


Introduction

The TV broadcast and cable networks industry has become increasingly competitive due to changes in aspects such as technology, content delivery, social eccentricities, and policy formulation among other dynamics in the field. This state of affairs has compelled media houses to undergo various organisational changes to meet consumer demands with the required efficiency, prudence, and timeliness.

Seemingly, competition has stiffened further amongst the media industry players in the United States. Numerous entertainment firms that offer various packages have sprouted within the media business. Therefore, the existing companies such as Walt Disney have had to review their operational and organisational strategies in attempts to offer highly competitive products and services.

This essay provides an in-depth analysis of the Walt Disney Company as one of the top US companies that are competing in the media industry by looking into the strategies that the company has embraced in an attempt to accomplish its international entertainment goals.

The Walt Disney Company

Commonly known as Disney, The Walt Disney Company is a leading US international media conglomerate that is based in California. It ranks among the oldest entertainment media houses as recorded in history. The company has undergone rigorous changes over the years of broadcasting to accomplish various goals in the media industry.

To accomplish the various goals and objectives in the telecommunication industry, the company has endured worldwide technological dynamics and shifting consumer patterns. Strengthening of generic strategies through various complimentary moves has been crucial for the overall success of the company’s business interventions.

The entertainment company functions are based on five business sectors that include media networks, parks and resorts, studio entertainment, interactive media, and consumer products (Tao and Lai 812).

Various business segments operate various subsectors within the scope of the company’s broadcasting, entertainment, and recreational goals. Its generic strategies have served as strong tools for building the brands of its entertainment products and services.

Strengthening the Generic Strategy through Complimentary Strategic Moves in the Media Industry

The company has achieved its success by applying a plethora of diversification strategies through complementary moves that have enabled it to flourish in international media markets (Thompson, Peteraf, Gamble, and Strickland 225). At the outset, The Walt Disney Company is known for its far-reaching outsourcing strategies.

The company has contracted a variety of companies around the globe to design and manufacture its products at relatively lower prices. This strategy reduces the company’s production and operational costs. Hence, it brings about huge returns on profits for the company. Through foreign outsourcing, the company has strived to gain global recognition through diversification of its film and consumer products and services, parks and resorts.

In addition, The Walt Disney Company has uses foreign direct investment business strategies to market its products in the global arena. To accomplish the objectives of this strategy, the company has established a multitude of stores in various localities not only in the United States, but also in other countries such as the United Kingdom, Spain, Italy, Latin America, Japan, and Europe among other geographic places.

This move has enabled the media multinational to reach a large number of consumers around the globe. The biggest advantage of foreign direct investment is maximisation of control over Disney’s business operations worldwide.

Furthermore, The Walt Disney Company provides direct foreign licensing to subsidiary companies that gain the privilege to produce and sell its products. Through direct foreign licensing, the company’s interventions in the media industry have aligned with multifarious cultures within the global localities in which it operates.

Tao and Lai reveal that the company places a strong focus on the economic trends and purchasing capabilities of world’s populations prior to setting up its stores in the host geographic locations (815).

Since the media industry has become increasingly competitive, Walt Disney has gone beyond its American value systems and cultural beliefs to embrace diverse socio-cultural and socioeconomic characteristics of the various populations around the globe. Out of this strategy, the company has managed to compete with potential players in the media industry such as Time Warner, Viacom, and News Corporation among others.

Disney’s Strategies for Competing in Markets

Horizontal Integration

The company operates in a very competitive business environment in the media industry. As a result, the company has deployed a number of strategies that have enabled it to maintain a competitive advantage amongst the key players in the industry such as CBS, Times Warner, Viacom, and News Corporation among other competitors.

The company uses horizontal integration strategies throughout its media interventions around the globe. Horizontal integration has enabled The Walt Disney Company to venture into various markets. The company possesses numerous media networks, studio entertainment, and consumer product businesses that have widened the scope of the company.

It uses its media networks to control its activities that pertain to TV and radio broadcasting around the globe. The company has provided these companies with autonomous power to control the operations within the scope of Disney’s functional segments. For instance, in 1996, Disney acquired the Entertainment and Sports Programming Network (ESPN) to operate under Disney Media Networks and Television.

In real sense, ESPN does not have any direct connection with the production Disney’s production process. However, Disney endowed ESPN with the required business licences to market its merchandise. Ultimately, this strategy has resulted in consolidation and cohesiveness of the company’s structure.

Following the fact that the media industry is highly competitive, consumers of the industry have a vast range of choices. As a result, the media and entertainment industries such as Disney experience continuous desire to generate the best products and services for their clients. In this context, the company has used horizontal integration to acquire other media firms in attempts to increase its market share.

The acquisition of other companies adds a plethora of skills and film practices to Disney (Tao and Lai 814). For instance, the acquisition of Marvel, Pixar, and Lucas films among other media companies increased Disney’s accessibility to over 10 thousand film characters.

Since horizontal integration involves the acquisition of new companies in the same field, Disney has opened access to new media markets both in local, national, and international grounds. Generally, this strategy has significantly reduced competition for The Walt Disney Company.

Vertical Integration

Apart from horizontal integration, Disney also uses vertical integration strategies to gain a competitive advantage in the media industry. Since the onset of 1980s, The Walt Disney Company has used vertical integration in a range of business functions such as production, marketing, and exposition of products and media services.

Under this strategy, the company exercises full management of content creation, production, and marketing strategies (Thompson et al. 234). This strategy has also helped the company to monitor creativity of content to meet market requirements. Nevertheless, Disney has used this strategy to compete in the media industry by digitising its production processes and liberalising its media business.

This move has seen the business upgrade its technologies in the various facets of operation to increase market opportunities in the media industry; hence, gaining a competitive advantage over the other media players. Through vertical integration, Disney has achieved it organisational goals in various ways that have made the company undergo significant revolution.

Primarily, the strategy has enhanced digitisation of the Disney’s production processes, a situation that has led to diversification of content and consumer products. As a result, the company has acquired various media outlet stores to sell and distribute its products and services in its areas of operation.

In 1996, the Walt Disney Company bought the American Broadcasting Company (ABC) as a part of its vertical integration strategy (Roder 24).

Product and Service Differentiation

According to Thompson et al., The Walt Disney Company has focused on differentiation of its services and consumer products in attempts to gain a competitive advantage in the media market (251). The company offers a wide range of products and services within the media industry. This strategy has enabled the company to acquire a substantial market share whilst maintaining a pliable competition gap.

The Walt Disney Company’s operations depend on consumers’ willingness to purchase a product or service of their choice. Therefore, the company has developed diversified powerful brands under the name of the company to increase the sales volume by capturing a vast range of clients.

As a result, Disney has continuously attempted to make improvements in the design, production, and distribution of pioneering products that provide mindboggling entertainment to its consumers (Tao and Lai 812). This strategy has earned the company a differentiation competitive advantage over the other key player in the industry.

Entry into Foreign Markets

The Walt Disney Company adopts various means to reach foreign markets. Primarily, the company uses its theme parks peculiarity to suit various market demands in its functional areas of operation. The concept of theme parks has lasted for over half a century ever since the establishment of Disneyland Anaheim in California.

Disney regards theme parks as a concept that inculcates enduring heart-felt experiences in its clients. The company uses this approach to access international markets. The uniqueness of the theme park approach has earned the company competitive advantage other international media conglomerates.

Theme parks have enabled The Walt Disney Company to exploit inimitable media and entertainment resources that are not within the reach of other players in the industry (Tao and Lai 813). The diversification of this unique entry mode has opened business opportunities in foreign countries that include France, Japan, and Hong Kong among other markets.

Moreover, The Walt Disney Company accesses foreign markets by localising its content to suit the ways of life of people in different parts of the world. The world populations are very diverse not only in culture but also in other aspects of life. This situation raises a need for establishing robust business means that recognises the needs and tastes of consumers around the world.

Localisation of content ensures that the company’s film products and other media services remain pertinent to its client irrespective of their geographic localities in the world. The achievement of this objective heavily depends on the company’s willingness to extend administrative assistance, coordination, and oversight functions to Disney’s international outlets.

As a result, globalisation has become inevitable for the company over its years of operation. Localisation of content has also enabled managers in the various geographic outlets to determine the best brands and film characters that resonate with consumer demands at local levels (Roder 14).

This approach to local consumers has seen the company spread its business over areas such as the Latin America, Japan, Europe, the Middle East, and Africa among other nations and continents.

Leveraging Operations Internationally

The Walt Disney Company does a great deal to leverage its diversified global operations. As one of the most reputable international media family, Disney has endured challenging market environments to ensure that its media activities continue to shine in local, regional, and global markets. At the outset, the firm offers exceptionally pioneering and state-of-the-art products that have improved consumer experiences.

Superior movies produced at The Walt Disney Company’s studios have continued to enlarge the company’s markets since the availability of such movies has increased in many retail studios.

Secondly, Disney has put forth strategies to revel native philosophies and general ways of life to make its products more germane and standard globally. The company’s appreciation of local cultures has served as an appropriate means of leveraging its operations internationally (Roder 16).

Conclusion

Unrelenting improvements in technology coupled with accompanying innovative and inventive abilities have continued to stiffen the competition amongst different companies in the media industry. As a result, there is increased diversification of pioneering products in the media market that have put business in the industry at a risk.

Therefore, there is a need for firms that operate in the TV broadcast and cable networks industry to adopt strategies that are more robust and flexible to technological and socio-economic changes.

The entertainment industry has revolutionised, owing to advancement in technological aspects of filmmaking, broadcasting, and internet serving. Consequently, to gain competitive advantage, there is a need for The Walt Disney Company to offer entertainment packages that are more attractive and exciting to its client as well as enhance its theme park strategies.

Works Cited

Roder, Fiona. Strategic Benefits and Risks of Vertical Integration in International Media Conglomerates and Their Effect on Firm Performance. PDF file. 9 Sep. 2014. <http://www1.unisg.ch/www/edis.nsf/SysLkpByIdentifier/3402/$FILE/dis3402.pdf>.

Tao, Teresa, and Josephine Lai. “Globalisation and theme park: A case study of Hong Kong Disneyland.” Tourism and Global Change: On the Edge of Something Big 1.1 (2013): 812-815. Print.

Thompson, Arthur, Margaret Peteraf, John Gamble, and Alonzo Strickland. Crafting & Executing Strategy: The Quest for Competitive Advantage: Concepts and Cases. New York, NY: McGraw-Hill/Irwin. 2013. Print.

This Case Study on The Walt Disney Company was written and submitted by user Carley Russo to help you with your own studies. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly.

Carley Russo studied at Clarkson University, USA, with average GPA 3.74 out of 4.0.

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Russo, C. (2019, June 24). The Walt Disney Company [Blog post]. Retrieved from https://ivypanda.com/essays/the-walt-disney-company-2/

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Russo, Carley. "The Walt Disney Company." IvyPanda, 24 June 2019, ivypanda.com/essays/the-walt-disney-company-2/.

1. Carley Russo. "The Walt Disney Company." IvyPanda (blog), June 24, 2019. https://ivypanda.com/essays/the-walt-disney-company-2/.


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Russo, Carley. "The Walt Disney Company." IvyPanda (blog), June 24, 2019. https://ivypanda.com/essays/the-walt-disney-company-2/.

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Russo, Carley. 2019. "The Walt Disney Company." IvyPanda (blog), June 24, 2019. https://ivypanda.com/essays/the-walt-disney-company-2/.

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Russo, C. (2019) 'The Walt Disney Company'. IvyPanda, 24 June.

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