Walt Disney Company, Case Study Example

Pros and Cons of Walt Disney Business Segments

The Walt Disney Company is American diversified multinational mass media corporation. It is headquartered at Walt Disney Studios in Burbank, California. It is the world second largest cable and broadcasting company in terms of revenue and Comcast. Roy Disney and Walt Disney as Disney Brothers Cartoon studio established the company in October 1923. The company was the leading diversified media enterprise and international family entertainment with five business segments. The segments are parks and resorts, interactive media, consumer products, media networks, and studio entertainment. The company had pros and cons in all the five business segments.

Media Networks

Media networks comprised of a vast array of broadcast, publishing, cable, radio, and digital businesses across two divisions, which are ESPN Inc. and Disney/ABC Television Group. Due to high and improved technology, media networks could be accessed online using the internet and even through mobile applications. The contents on the media networks were of high quality that the viewers or customers were satisfied. Media networks had 238 strong news brand affiliates who could reach up to 99% of the US householders. Media networks had some cons in their operations. It was difficult from the traditional media outlets to new media outlets. Shareholders had limited choices of investing because they were not able to invest in different sectors. It was difficult to market company activities due to limited sharing of capabilities and resources.

Parks and Resorts

Parks and resorts were the leading providers of family leisure and travel experiences serving millions of guests each year. The company has diverse economies of scope as it uses multiple divisions of media to achieve a specific goal of brand awareness. The company had parks in both east coast and west coast of United States. The company has enough capital resources, which attracts different kinds of people from various geographical locations. The company is growing internationally in other countries. For example, Disney resort has been developed in Shanghai and two more lands are being planned for Hong Kong resort. Parks and Resorts have managerial complexity because they are distributed in various locations. Parks and Resorts are distributed in Paris, Hong Kong, and Tokyo, which is very difficult to manage them at the same time. Parks and Resorts face stiff competition from Busch Entertainment Corporation. There are high unemployment rates in these areas, and it is difficult for one to secure employment in the company.

Studio Entertainment

Disney Studios is the foundation where Walt Disney Company was later established. Due to production of different products, Disney studios enjoy rise in the ticket price for their products due to reduced production costs. Pay per video on DVD home entertainment and VOD has risen because the products are produced simultaneously. High technology has boosted the technology in a company where many products can be produced at the same time. Opening of other studios like Marvel led to the growth of operating profits by 250%. Disney studios face stiff competition from Warner Brothers in the market as they offer similar products and services. Many people can access some of the entertainment services on the social media by visiting YouTube sites leading reduced sales in the company. Box office prices are increasing gradually which is becoming more expensive for the company. Another problem is the barriers when entering the studios, which discourages many customers.

Consumer Products

Different consumer products are offered in all the company stores including apparels, toys, fine art, and books. Costs of production and operation are reduced because the company operates many stores simultaneously. The company has 103 stores in Europe, 208 in North America, and 46 in Japan. The company offers intellectual properties, which are produced through innovation and creativity. Due to strong loyalty on the company’s brands, the buyers have strong bargaining power. Warner Brothers are the competitors to Disney as they offer similar consumer products. The company is facing various threats from the substitutes of the consumer products because customers may opt for the substitutes if they are cheaper. Due to weak global economy, the company does not achieve its targets when selling its consumer products. The suppliers have weak bargaining power, which discourages them from the continuous supply of the products.

Interactive Media

Disney interactive media are one of the largest creators of high-quality interactive entertainment in the world. Contents and products offered through Disney interactive media include video games, blockbuster mobile, console games, and online virtual worlds. The company experience low entry barriers when engaging on the interactive media. Market for the products is growing faster because the company is marketing the products extensively and makes higher profits. High and improve technology enables the company to offer quality products, which can be accessed online. The company faces strong competition from the Acquired Playdom Inc. as it offers similar interactive media products. Some buyers are discouraged from buying the products due weak buyer bargaining power. Some people access the products on the social media and the makes lower sales due to reduced customers.