Strategic Management Report: Analysis of Disney Corporation's Strategy

This report undertakes a comprehensive analysis of the strategic management practices of Disney Corporation. It begins with an introduction to strategic management and its importance, followed by an examination of Disney's current business and corporate strategies. The main body of the report delves into the external environment analysis using PESTLE factors, evaluating the impact of political, economic, social, technological, legal, and environmental factors on the company. Internal analysis is conducted through a SWOT framework, identifying Disney's strengths, weaknesses, opportunities, and threats. Furthermore, the report evaluates industry development drivers using the Ansoff matrix to assess market penetration, product development, market development, and diversification strategies. The report concludes by identifying key strategic issues faced by Disney and offering recommendations for improvement, emphasizing the significance of strategic management for long-term sustainability and success. The report references several academic journals and books to support its findings and analysis.

Strategic Management

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Analysis of external environment:...............................................................................................1
Analysis of internal environment:................................................................................................2
Evaluation of industry development drivers:...............................................................................4
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
Strategic management can be defined as an activity of planning and accessing
requirements of business for the purpose of achieving targets of an organization. Constant
changes in the environment of entity emerges need of regular assessment of strategies for
assuring success of enterprise (Adewale, 2016). Hence, strategic management includes setting of
goals, analysis of competitive environment, evaluation of internal environment of an entity and
planning as well as implementation of strategies in alignment of business targets. This report is
based on study of strategic management activities of Disney's Corporation. It is an multinational
company which is headquartered in United States and serves worldwide. Enterprise was founded
in 1923 by Walt and Roy O Disney. Disney Corporation is a leading corporation that serves in
entertainment sector as well as amusement parks. This report evaluates current business level as
well as corporate strategy of business with the motive of sustaining competitive advantage.
Further, external and internal analysis is done with the utilization of business system model as
well as industry development drivers. Lastly, key strategic issues are identified along with
required recommendations.
MAIN BODY
Analysis of external environment:
External environment can be elaborated as forces or conditions which are outside the
control of enterprise but have huge influence of it. For the purpose of studying external
environment of an enterprise, PESTLE analysis is applied by Disney Corporation. This technique
enables an organization in effective decision making and strategic formulation by evaluating
external environment of enterprise (Bodrunov and Plotnikov, 2019). Following are factors of
pestle analysis along with evaluation of its impact on entity:
 Political: It involves foreign trade policy, corruption, policies related to taxation, trade
restrictions etc. Implementation of free trade policies in United States impacts entity
positively as it provides opportunity to business for expanding its business across globe.
Additionally, stable political conditions in country further serves as a benefit to entity as
it enhances strategic formulation of Disney Corporation.
 Economical: This factor includes interest rate, labour costs, growth rate of economy,
inflation rate, taxation, etc. Increment in disposable income of consumers results in high
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expenditure of people for its entertainment, hence, it have positive influence on Disney
Corporation. As it improves customer base in amusement parks and leads to high revenue
generation from shows of an organization (Edwards, 2018).
 Social: It includes growth rate of population, age distribution, barriers of culture,
consumer perception and trends, attitudes of customer, etc. As Disney Corporation is
entertainment based industry, hence, shared beliefs or attitude of people have huge
impact on an organization. Favourable attitude of customer towards leisure held positive
implication on business.
 Technological: Factors related to technology involves automation or innovations,
technological upgradations etc. High transforming technology increases cost of business
in relation to research and development and encourages piracy which imposes negative
implication on Disney Corporation (Emeagwal and Ogbonmwan, 2018). Reason is that
high implementation of expenditures reduces profit margin of an enterprise. On the other
hand, technological enhancement increases popularity among people in context to
augmented reality. It promotes product of entity and hence pertains positive impact.
 Legal: It evaluated various laws related to business such anti-trust law, laws related to
consumer protection, employment laws and regulation, health and safety regulations,
standards of advertising etc. Implementation of all such regulation increases complexity
of management and improves its expenditure. Hence, it negatively impacts profitability
of Disney Corporation.
 Environmental: Factors related to environment focus on climate or weather changes,
regulations or policies related to environment etc. While considering implication of
environmental factors on working of Disney Corporation it can be stated that worsening
climate weather negatively impacts attractiveness of amusement park hence it possesses
negative implication on business.
Analysis of internal environment:
Internal analysis refers to exploration of internal competencies and weak points of
business. It enables an organization to evaluate its viability by providing required information
related to internal environment of an enterprise (Fontrodona, Ricart and Berrone, 2018). For the
purpose of internal analysis of Disney Corporation, framework of SWOT analysis is applied. It
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is a technique of compilation of strengths, weaknesses, opportunities as well as threats of an
enterprise. It enables managers of business to enhance their ability of decision making.
STRENGTHS WEAKNESSES
 Disney Corporation is a strong brand
and is popular among people
worldwide. It serves as a strength to
company as it leads to increment in
brand value and image of an
organization.
 Purchase of Marvel entertainment
enabled Disney Corporation to gain
profit by aligning with various top hit
films in box office, such as, Thor, Iron
Man 2, Avengers etc.
 Disney land or Disney world is not only
appealing for children but for adults as
well. This increases the attractive of
company in the market, hence, can be
considered as a strength for an
organization.
 Departure of Katzenburg, which was
the creative producer for the famous
films such as 'Beauty and the beast',
'Little mermaid' etc., served as a
weakness for Disney Corporation as it
weakened the track record of Disney's
animated movies.
 Character development of Disney
Corporation is slow. Only few main
characters such as mickey mouse and
donald duck is focused for the purpose
of revenue generation.
 Target audience of company is limited.
It mainly focuses on people who prefer
animated characters or fictional heroes.
OPPORTUNITIES THREATS
 Disney Corporation have to opportunity
to develop its presence in various
untapped and developing countries
(Parayitam and Papenhausen, 2018). It
leads to increment in brand recognition
and also enhances customer base of
company.
 Technological innovations provides
opportunity for growth of business as
 Increasing competition is the most
effective threat for Disney Corporation.
Its main competitors are 21st Century
Fox, Comcast and Time Warner.
 Technological disruption is another
threat incorporated with Disney
Corporation as it alters the way of
earning profit and requires
implementation of new strategies.
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Disney Corporation pertains
opportunity to adopt changing
technology and improve entity's
efficiency.
Hence, it leads to cost increment.
 Shift in trend of entertainment market
towards online channel increases threat
of piracy of digital content.
Evaluation of industry development drivers:
Industry development can be explained as a procedure of growth or expenditure of
industries. It involves technological advances, enhancement of mass production, etc.
development of industries improves standard of living of people and improves productivity of
business (Gavel'O, 2017). Ans-off matrix is utilised by Disney Corporation for the purpose of
analysing and planning strategies for expansion. Strategies of ans off model is diversified in four
segments which are discussed below:
 Market Penetration: With the application of this strategy, business focuses on
expanding its service market hence, sets low price of its product with intention of
attracting large number of customers. Utilization of this strategy helps Disney
Corporation in acquiring large customer segment which provides competitive edge to
firm. It enables an organization in leading its target market. This can further be achieved
by increasing distribution or promotional offers which enhances customer attractiveness.
 Product development: In this strategy, organization increases its product portfolio by
developing more products with current market base. For this purpose, extensive research
is required by Disney Corporation. Application of product development model helps
company in constant appliance of constant innovations according to customer trends. It
leads to improvement in sustainability of business (Kundu and Bairi, 2016).
 Market development: With strategy of market development, business expands its target
market and enters new market with existing product. It pertains Disney Corporation to
develop more customers by targeting potential customer segment. This strategy is growth
oriented and helps company to improve its brand recognition across the globe (Panteleeva
and Unosheva, 2016). Several untapped market can be focused by Disney Corporation
through this strategy which leads enhancement in profitability of firm.
 Diversification: This strategy involves high risk as it suggest development of new
product in new market. Diversification strategy is applied by Disney Corporation in a
way that firm operates and manages business in three core areas, that is, animation, mass
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media and theme parks. It helps business in grabbing available opportunities in market
and earn high profit through it. Although, diversification strategy associates high risk
factor.
CONCLUSION
On the basis of this report it can be concluded that strategical management is essential for
long term sustainability and success of any organization. Strategic issues can be explained as that
problem which questions decision making process of an organization and consists impact of its
efficiency and productivity. While evaluating strategic issues of Disney Corporation it can be
interpreted that business pertains issue of limited target customers and reduced alignment with
current trends. Former is an issue because Disney Corporation mainly focuses on animated
character but according to changing customer demands firm to come up with some innovations
in its product portfolio. While, for later issue it can be suggested that company should involve
into strategic alliances for improving customer experience.
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REFERENCES
Books and Journals:
Adewale, A. A., 2016. Change, customer satisfaction and competition: Issues from the strategic
management context. International Journal of Economics, Business and Management
Studies. 3(2). pp. 55-66.
Bodrunov, S. and Plotnikov, V. A., 2019. Strategic aspects of national socio-economic
development. In International Business Information Management Association (IBIMA)
(pp. 4916-4922).
Edwards, G., 2018. Through the looking glass: Strategic organizational practices in strategic
management. Canadian Journal of Administrative Sciences/Revue Canadienne des
Sciences de l'Administration. 35(3). pp. 373-389.
Emeagwal, L. and Ogbonmwan, K. O., 2018. Mapping the perceived role of strategic human
resource management practices in sustainable competitive advantage. Academy of
Strategic Management Journal. 17(2). pp. 1-19.
Fontrodona, J., Ricart, J. E. and Berrone, P., 2018. Ethical challenges in strategic management:
the 19th IESE International Symposium on Ethics, Business and Society. Journal of
Business Ethics. 152(4). pp. 887-898.
Gavel'O, Y., 2017. Prospects of controlling systems in strategic management. Financial
Analytics: Problems and Solutions. 10(1). p. 4.
Kundu, G. K. and Bairi, J., 2016. Strategic management and innovation. Quality Assurance in
Education.
Panteleeva, M. S. and Unosheva, A. V., 2016. BIM-technology and peculiarities of strategic
management construction enterprise. In Science, technology and higher education (pp.
52-56).
Parayitam, S. and Papenhausen, C., 2018. Strategic decision-making. Management Research
Review.
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