Amusement park industry swot analysis

itle：Walt Disney Company Case Study

Author(s): Anna(方榆安)，Adrien(安磊恩), Jackie(楊欣樺), Judy(洪靖雯),

Zoe(范氏黃英)

Class: 1 s t

and 2 nd

year of Department of International Business

Student ID: M0566104, M0400975, M0419066, M0401183, M0570968

Course: Global Strategic Management

Instructor: Dr. Dr. Fang-Yi Lo

Department: Department of International Business

Academic Year: Semester 1, 2016-2017

The Walt Disney Company Case Study

1 FCU e-Paper (2016-2017)

Abstract

In an ever-changing world, we researched how a company like Disney and more

particularly the Walt Disney Parks and Resorts division can become and stay a leader

in its industry.

We analyzed the different levels of strategy, created a strategic map, applied a

five forces analysis of the company, did a group analysis, did a VRIS and

Resource/Analysis, did a BCG matrix and Synergy analysis, a value chain analysis,

explained the diversification strategy.

These researches allowed us to define the key point that makes Disney the

reference in the amusement park industry: offer a unique, immersive and positive

experience to each visitor through a great storytelling that is constantly renewed. The

future success of the company depends on its ability to innovate and keep delivering

an outstanding user experience.

Keyword： Disney parks, amusement parks, strategy

The Walt Disney Company Case Study

2 FCU e-Paper (2016-2017)

Table of Content

Chapter 1 The Walt Disney Company ........................................................................... 8

1.1 Introduction ...................................................................................................... 8

1.2 Choosing Disney .............................................................................................. 8

1.3 Facts and Statistics ........................................................................................... 8

1.3.1 Company ............................................................................................... 9

1.3.2 Divisions: .............................................................................................. 9

1.3.3 Subsidiaries ........................................................................................... 9

Chapter 2 Strategic Level ............................................................................................. 10

2.1 Disney’s Corporate Level Strategy ................................................................ 11

2.2 Disney’s Business Level Strategy .................................................................. 11

2.3 Disney’s Functional Level Strategies ............................................................. 12

2.3.1 Research and Development ................................................................. 12

2.3.2 Human Resource ................................................................................. 13

2.3.3 Finance ................................................................................................ 13

2.3.4 Marketing ............................................................................................ 14

2.3.5 Tokyo Disney Resort ........................................................................... 15

Chapter 3 Strategic Map .............................................................................................. 16

3.1 Guest Experience ........................................................................................... 16

3.2 Telling Stories ................................................................................................ 18

3.3 Family Entertainment ..................................................................................... 18

Chapter 4 Five Forces Analysis ................................................................................... 19

4.1 Industrial Rivalry ........................................................................................... 19

4.2 Threat of Substitutes ...................................................................................... 21

4.3 Potential Entrants ........................................................................................... 21

4.4 Bargaining Power of Supplier ........................................................................ 22

4.5 Bargaining Power of Buyers .......................................................................... 23

Chapter 5 Strategic Group Analysis ............................................................................. 27

5.1 Single Location Theme-based Parks .............................................................. 28

5.1.1 Internal competition of cluster: Medium ............................................ 28

5.1.2 Mobility barriers: Medium .................................................................. 28

5.2 Single Location Mainly Theme with Few Rides Parks Cluster ..................... 29

5.2.1 Cluster internal competition: High ...................................................... 29

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5.2.2 Cluster Mobility: Low-medium .......................................................... 30

5.3 Multiple Location, Mainly Theme with Few Rides Park............................... 30

5.3.1 International competition of cluster: Low ........................................... 30

5.3.2 Mobility barriers: Medium .................................................................. 30

5.4 Multiple Location Sensation-Based Cluster .................................................. 31

5.4.1 Cluster internal competition ................................................................ 31

5.4.2 Cluster Mobility .................................................................................. 31

5.5 Global Theme and Sensation Parks Cluster ................................................... 32

5.5.1 Cluster internal competition ................................................................ 32

5.5.2 Cluster Mobility .................................................................................. 33

Chapter 6 Resource and Capability Analysis ............................................................... 34

6.1 Resources ....................................................................................................... 35

6.1.1 Tangible resource ................................................................................ 36

6.1.2 Intangible resource .............................................................................. 37

6.1.3 Human Resources ............................................................................... 42

6.2 Capabilities .................................................................................................... 43

6.3 Resources and Capabilities Analysis ............................................................. 45

6.4 VRIS Analysis ................................................................................................ 47

6.4.1 Capability ............................................................................................ 47

6.4.2 Resources ............................................................................................ 48

Chapter 7 Value Chain ................................................................................................. 49

7.1 Firm Infrastructure ......................................................................................... 49

7.2 Human Resources Management .................................................................... 52

7.3 Technology Development .............................................................................. 53

7.4 Procurement ................................................................................................... 54

7.5 Inbound Logistics ........................................................................................... 55

7.6 Operations ...................................................................................................... 56

7.7 Outbound Logistics ........................................................................................ 56

7.8 Marketing & Sales ......................................................................................... 56

7.9 Service ............................................................................................................ 60

Chapter 8 BCG Matrix and Synergies ......................................................................... 63

8.1 BCG Analysis ................................................................................................. 64

8.1.1 ESPN Inc. - Dog ................................................................................. 64

8.1.2 Lucasfilm - Star ................................................................................... 64

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8.1.3 Disney Channels Worldwide－Question Mark ................................... 65

8.1.4 Walt Disney Animation Studios - Star ................................................ 67

8.1.5 Pixar Animation Studios - Star ............................................................ 70

8.1.6 Disney Parks and Resorts - Cash Cows .............................................. 72

8.1.7 Disney Interactive – Question Mark ................................................... 77

8.1.8 Disney consumer product – Question Mark ....................................... 78

8.2 Synergy among SBUs .................................................................................... 80

Chapter 9 Vertical Integration, Outsourcing and Diversification Strategy .................. 81

Disney Integration Map ....................................................................................... 81

9.1 Disney Vertical Integration ............................................................................ 82

9.1.1 Park and Resorts ................................................................................. 82

9.1.2 Movie .................................................................................................. 82

9.1.3 Merchandise ........................................................................................ 83

9.1.4 ABC Networks Group ......................................................................... 85

9.2 SIC Code of Walt Disney Cooperation .......................................................... 86

9.3 Diversification of The Walt Disney Company ............................................... 86

Chapter10 Diamond Analysis ...................................................................................... 89

10.1 Factor endowments: Disney parks and resorts USA .................................... 89

10.1.1 Location ............................................................................................ 89

10.1.2 Infrastructure ..................................................................................... 90

10.1.3 Hospitality well-educated employees: .............................................. 90

10.2 Demand Conditions ..................................................................................... 91

10.2.1 Standard Operating Procedures ......................................................... 91

10.2.2 Economic scale ................................................................................. 91

10.2.3 Copy right ......................................................................................... 91

10.3 Related and Supporting Industries ............................................................... 92

10.3.1 Rides/Attraction Manufacturers ........................................................ 92

10.3.2 Transportation ................................................................................... 92

10.3.3 Food .................................................................................................. 92

10.3.4 Tourism Industry ............................................................................... 92

10.3.5 Consumer Merchandises ................................................................... 93

10.4 Firm strategy, structure, and rivalry ............................................................. 93

10.4.1 Firm strategy ..................................................................................... 93

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10.4.2 Firm structure .................................................................................... 93

10.4.3 Rivalry ............................................................................................... 94

10.5 Government .................................................................................................. 94

Chapter 11 Conclusion ................................................................................................. 95

References .................................................................................................................... 97

Appendix .................................................................................................................... 111

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List of Figures

Figure 1. Strategic Level .............................................................................................. 10

Figure 2. Strategic Map ................................................................................................ 16

Figure 3 Five Forces Analysis ...................................................................................... 19

Figure 4. Disney Industrial Rivalry ............................................................................. 20

Figure 5. Disneyland in Anaheim ................................................................................ 24

Figure 6. Queue time for major attractions and visitors .............................................. 25

Figure 7. Strategic Group cluster ................................................................................. 28

Figure 8. Value Chain................................................................................................... 49

Figure 9. Finding Nemo /Dory attraction/ride concept art .......................................... 57

Figure 10. Finding Nemo ............................................................................................. 57

Figure 11. Iron Man Experience .................................................................................. 58

Figure 12. Taylor Swift as Rapunzel ............................................................................ 59

Figure 13. Disney wedding .......................................................................................... 60

Figure 14. Strategic Level of Disney ........................................................................... 63

Figure 15. BCG Analysis ............................................................................................. 64

Figure 16. Cable Networks Segment Market Share ..................................................... 66

Figure 17. Walt Disney Animation Studios .........................................................