Strategic Management of Disney: External Environment Analysis and Business Level Analysis

This paper analyzes the external environment of Disney using PESTEL analysis and Porter's five forces analysis. It also conducts a business level analysis of Disney movies and discusses their strategic intent of acquiring 21st Century Fox. The paper concludes that Disney's brand value and acquisitions will lead to their strategic success.

Running head: STRATEGIC MANAGEMENT
Strategic Management
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Author Note

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Abstract
The purpose of the following paper is to determine the business issues of the world famous
entertainment company Disney. They have been the market leaders in this business. The business
environment of the organization has been discussed and the external environment of the
company has been focused more. The PESTEL analysis of the Walt Disney has been done and it
is very much useful to denote the issues they could face in their business. The Porter’s five forces
analysis has been done to find out the business challenges regarding the competitors. The
acquisitions of Fox by Disney have been highlighted as their future strategic intent. However, the
business analysis has been made on the Disney movies as well.

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Table of Contents
Introduction......................................................................................................................................3
External Environment of Disney.....................................................................................................3
Five Forces analysis.........................................................................................................................6
Disney Business level analysis........................................................................................................8
Disney strategic intent.....................................................................................................................9
Conclusion.......................................................................................................................................9
References......................................................................................................................................11

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Introduction
The purpose of the following paper is to determine the various levels of business
strategies for the business organizations. The business organization that has been chosen here for
this paper is Disney. The company is regarded as one of the leading companies in the mass
media and entertainment industry (Disney.com, 2018). The company was established 95 years
ago in the year 1923. It is very important to note that the business decisions are very important
for the organizations to flourish in the competitive business environment.
It should be considered that Disney has been a pioneering company for the fun and
amusement of the children and their family members. It is indeed very important to make a
thorough analysis of the external environment of the company to understand what things should
be included within the business operations for the achievement of the strategic vision of the
company (Disney.com, 2018).On this note the external environment of Disney will be
highlighted with the help of the Five forces analysis. The business level analysis of the
organization will be conducted here in this section as well. Apart from these analyses, the
strategic intent of Disney regarding their business expansion in the other countries will be
discussed.
External Environment of Disney
The external environment analysis of Disney will be conducted. Disney operates in the
mass media and environment industry and the headquarters of the company is located in the
United States of America.
Political

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The political factors are very important for the success of the organization. It is very
important that the political stability must be there in the organization in which the organization
will operate (Jurevicius 2013). Due to this reason, Disney is quite safe. It is only because USA
one of the most powerful countries in the world and the political condition of the country is quite
stable. The several rules and policies of the government are very much essential for the Walt
Disney. The policies of the government have direct impacts on the company since they operate in
the entertainment industry and provide amusement to the people. The import policies of the
several regions will surely play a vital role for the operations of the industry. These policies will
be important variables for the success of the company. As they will look to expand into other
countries, the political implications will have a huge significance.
Economic
The foreign exchange rates are indeed very important for the overall success of the
company (Woodford 2012). The recession and inflation can be considered as very important
components for the success of the company in as well. The economic components will provide
huge opportunities for the overall growth of the company (Jurevicius 2013). Another factor for
the overall success of the organization is the per capita income of the people in the country and
state. The interest of the people in the entertainment industry will be higher in the regions will be
higher where the per capita income is high. All of this will depend on the GDP of the country
(McAuliffe 2015). This is very important for the luxury entertainment brands like Disney. The
states will take part in the activities of Disney in which the Human Development index is high
with a good amount of economic improvement. These areas and these people will likely to
impact on a positive note for the success of the company (Bernanke et al. 2018).

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Social
The technical trends of the society are very much important for the overall success of the
society. The high income modern societies will be much interested in taking their children to the
various amusements parks of Disney (Theaker 2017). The Walt Disney will be able to provide
the proper level of fun and amusement ti these people only. The comfortable and luxurious
modes of amusement are their desire and Disney can provide it the best. The high society is
always in favor of enjoying the contemporary trends of amusement through Disney Camisón, C.
and (Villar-López 2014). The ethical issues like using the characters for the fun and amusement
will also come into the practice in this context.
Technological
The implication of technology has been very significant for the life. This is why Disney
has also used the technology to satisfy the desire of the customers. The innovation factors have
played a major role in the success of the company and the technological aspects have been seen
with the utmost focus (Theaker 2017). The company is always in favor of the innovation and has
always been up to date with the contemporary trends of innovation (Baden-Fuller. and Haefliger
2013). They use the technology to spread their innovative designs to their customers through the
social media. The people with the modernist mindsets for luxury and comfort will surely
purchase their products instantly. Thus the innovation process through the use of technology will
be the most important factor for their future success (Yüksel 2012).
Environmental
The environmental factors are very important things for this as well. They are working on
using the bio-fuel products and presenting a pollution free world to the people. Walt Disney will

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look to promote the campaigns that will cater for the environmental safety of the world (Yüksel
2012).
Legal
The legal factors will be very much integral for this process as well. They should cater to
fulfill all the legal issues within the constraints of the state (Kogan et al. 2017). If the company
does not abide by the legal aspects it can even be able to ruin their reputation. They are very
concerned about putting the legal things at its proper place (Padilla‐Walker et al. 2013).
Five Forces analysis
Competitive rivalry
The competitive rivalry is very high for the company Walt Disney since the
entertainment industry is flourishing all over the world. Many firms have come into this market.
The competition in the industry has become very much intensified indeed. Many firms have
produced high quality animated films and they have become quite popular as well. Some
strategic management issues have also been noticed in this section as well. This will be a major
challenge for the organization in the future (Khanna 2014).
Bargaining power of Disney
The switching costs for Disney are very low indeed. It will be quite easier for the target
audience to shift from the Disney movies to movies produced by the other firms. The bargaining
power of the customers is very string indeed. The price sensitivity of the customers is moderate
and Walt Disney must go on to utilize this section. The company must think about the pricing

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strategies once again for their future success. Disney will have to retain their customers by
contributing moderately to the intensification of the customers’ needs (Khanna 2014).
Bargaining power of suppliers
The total population of the suppliers is huge in terms of the needs of the customers. The
number of the suppliers is abundant so it will be very much useful for the company to provide
the customers with their desired products through the suppliers (Hitt, Ireland and Hoskisson
2012). If the number of suppliers was limited it could have affected the business decision in a
wide manner. The varieties should not be moderate because it will affect the supply of the
products immensely. The suppliers should be empowered to provide the best products with large
varieties by following the modern trends.
Threat of the substitutes
The customers do have a good number of substitute options for Disney. The
performance-to-ration factor has been very much important in this case since they will need to
get rid of the threats for the substitute companies (Doz 2017). If the Walt Disney provides the
large number of products with wide varieties it will impact positively on the strategic success of
the organization.
Threat of the new entrants
The capital cost is very high and brand development costs are high as well. If the
competitor firms can provide the customers with the various types of products and services at a
lower cost it will surely be a threat to Disney. Disney is a huge brand all over the world and this

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will have a huge impact on the success of the rivals. The rival companies will find it very hard to
compete with such brand like Disney.
Disney Business level analysis
The business unit that will be focused in this section will be the Disney movies. The
Disney movies are regarded as the most incredible fantasy movies all over the world. Some of
the best movies being produced by the Disney movies are the Sleeping Beauty, The Little
Mermaid, Beauty and the Beast and many others. One of their greatest strengths is the display of
the graphics for the movies made for the children. The Disney movies are always very
fascinating to watch for the children of different ages. The various characters like Goofy, Donald
Duck, Mickey Mouse, Ariel and many others are very approachable to the children (Gamble,
Thompson and Peteraf 2013). The several marketing strategies have always catered to the
success of the company in various ways.
Disney brand has always given the proper value for the ethical measures in the best ways.
No unethical shows or movies have been shown by them that could hamper the childhood. The
box office revenue of the organization is so huge and this has catered to the overall brand success
of the company. The innovation strategy of presenting their films and make the advertising
properly has been the most important thing for the catch the attraction of the target audience
(Campbell, Coff and Kryscynski 2012). They have also catered to the needs of the target
audience by providing them with the opportunities to view the best animated movies possible.
The theme parks of Disney have also provided the support for the company as most parents take
their kids to those parks for the purpose of amusement.

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Disney strategic intent
` As per the question of the strategic intent goes, Disney has signed the amended
acquisition deal with 21st Century Fox for providing the better services to the customers. The
acquisition had been made as for $38 per share in modes of cash and stock. The customer
satisfaction has been their primary choice. The original businesses of the 21st Century Fox
Entertainment will be the same as it was earlier as per the agreements (Gamble, Thompson and
Peteraf 2013). This acquisition program will have a direct impact on the satisfaction of the
customers. Both these companies have a great number of market shares and this acquisition
program will place them way above their competitors. The entertainment business will get a
huge boost. They had raised the bid for the acquisition of the 21st Century Fox much higher than
their rivals Comcast. This had been one of their masterstrokes to capture the audience for the
retaining of the customers and the increase in the number of the customers as well. The various
TV shows, toys, theme parks and Disney merchandise have been the key things for the success
of the organization (Campbell, Coff and Kryscynski 2012). The management issues will have to
be decreased in order to maintain the proper and smooth operations of the organization. This
acquisition of the Fox will lead the company to make the ir advertisements in a better manner
and the production of their Disney movies also be done in the grandest manner of them all. This
will surely lead to the strategic success.
Conclusion
As per the discussion of the paper, it can be concluded that Disney’s brand value will
lead them to acquire the highest number of consumers in the entertainment industry. This will be
the most effective thing for their strategic success. The company has also decided to make
acquisitions of the 21st Century Fox for the better distribution of their films and better marketing.

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However, these things would be the most effective things for retaining of the customers. The
external environment of the company suggests that they will need to comply to the legal
guidelines of the country.

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