Disney is considered to be one of the pioneers in the entertainment industry, and for almost one century, the company have managed to grow successfully and to respond tremendously well to global changes such as the rapid technological evolution and the constant variations in customer trends. The reason they have accomplished that is because Disney shaped in people’s mindthe assumption of permanent, combined with an outstanding delivery of their products and services, which in simple word means: ‘we are always going to be here’. This is described by Miles and Snow (2003) as the ‘Defender’ strategic approach, where large corporations fights to preserve and maintain their top position in the market.
Despite all external factors affecting Disney’sprofitability, the company has built over decades a very strong brand image in the family entertainment business, which makes their brand the most important value, hence providing a differentiate position in the market that distinguish the company from their rivals. As showed in the Brand Leadership Matrix (Fill and Fill, 2005) Disney utilises their brand as the main marketing tool to position themselves asmarket leaders of the industry (see fig.1). The fact that Disney have been in the market for so long, generates the need to invests heavily in brand development, so as to keep the brand image fresh, innovative and relevant to the 21st century.
In addition, Disney has achieved its top competitive position by embracing the Ansoff’s Matrix approach (see fig.2) from an early stage (Gilliganand Wilson, 2009). As perceptible, Disney utilised this strategy to continuously develop new products to consumers e.g. producing new cartoons and characters regularly; which helped the company to attain competitive advantage by responding effectively to different segments within the market.
Moreover, after building a strong brand image, Disney differentiated their business througha diversification strategy, where the company took the risk to enter new markets with new products such as parks and resorts, cruising lines, cable network, publishing, shops and even by procuring a baseball team. Additionally, Disney also moved to new geographic locations (market development) either in domestic or international markets such as the Hollywood film industry and Amusement Parks e.g.Disneyland Paris and Hong Kong Disneyland.
Furthermore, to increase market share, VIP tours in the Parks were implemented. This approach aims to add value to the service and to attract new customers. In compliance with Porter’s five forces (Porter, 2004), by differentiating and expanding their products and services over the years, Disney has created a high barrier for new entrants by simplyreaching a large number of diverse segments in different markets, which automatically reduces the level of competitiveness in the market.
By reading their Mission Statement on page 2 of the case, Disney have achieved their mission successfully with no doubt; nevertheless, after a massive growth over the past decades the company seems to have reached a mature stage, where according to theindustry life cycle (see fig.3) this stage is noticed when companies’ growth becomes sluggish; yet, in this context, the maturity stage is recognisable because Disney is one of few firms that have survived for a long period and dominates most of the market along with other market leaders, also known as an Oligopoly (Jones, 2008) e.g. Park and Resorts, where the main players in the industry are TheMagic Kingdom at Walt Disney in Florida, Six Flags in Oklahoma City and Ocean park in Hong Kong. (See pages 11 and 12).
In order to best analyse the competitive environment based on Porter’s five forces (see fig. 4), it is necessary to divide Disney’s SBUs into strategic groups, because while Disney’s Parks & Resorts and Media Broadcast Network maybe considered as part of the entertainment...