Walt Disney Parks and Hotels first opened its doors on July 17, 1955. The goal was to develop a location focused on immersive experiences and narrative. Furthermore, he wished to usher in a new era oriented mostly on family entertainment (Wasko 2013, 40). For the past sixty years, the Walt Disney Parks and Resorts division of the Walt Disney Company has developed to become one of the world's top providers of family leisure and travel experiences. The company receives more than five million guests every year with relatives and friends visiting the organization to make memories that will last for a long time. Additionally, the organization has six world-class vacation destinations and operates in Europe, North America, and Asia (Milman 2010, 232). The company also includes facilities such as Disney Cruise Line, Adventures by Disney, Walt Disney Imagineering, Disney vacation club, Aulani- Disney Resort and Spa, Disneyland Paris, Hong Kong Disneyland, Shanghai Disney Resort, and Tokyo Disney Resort.
Similarly, the company is one of the global organizations that are committed towards environmental conservation and stewardship. The company conserves the environment through the use of green energy as an alternative source of energy (Holcomb 2010, 320). Similarly, the company recycles, repurpose, and reuse some of its waste to reduce pollution of the environment. Moreover, the company uses some of its influence to help conserve wildlife and provide an enriching opportunity that helps in the creation of a strong bond between the parents and the kids (Matusitz 2011, 678). Likewise, the company runs Disney Conservation Fund the was founded in 1995, and fundamental pillars of the fund are to protect the plant and help children develops skills and lifelong conservation values. The fund also supports the protection of wildlife habitats, the study of wildlife, education programs, and development of community conservation.
External analysis
For the purpose of the external review of the Walt Disney Parks and Hotels, the paper will consider the political, economic, social, technological, environmental, and Legal (PESTEL) factors which are the external factors that impact the company in the provision of its services.
Political factors
The political environment that surrounds the Walt Disney Parks and Hotels id one of the primary features that mainly have a direct impact on the amusement and entertainment industry. Primarily, when a nation is politically unstable several sectors of the region will be adversely affected, and the amusement and entertainment industry will be significantly affected (Clavé 2010, 72). The Walt Disney Parks and Hotels are lucky to be operating in areas where the nations are politically stable where business is smooth making the daily activities of the organization to run smoothly. Moreover, any adverse changes in political stability can adversely affect the operation and revenue of the organization (Sehlinger and Testa 2011, 78). Moreover, the international policy and military environment is another area that needs to be maintained at favorable to generate income and have a positive impact on the nation it is operating in.
Economic factors
The financial crisis that originates in the United Sates has spread into other nations creating a declining economy in other countries. The entertainment industry of the Walt Disney Parks and Hotels has been negatively affected by the same adverse conditions. Moreover, the income that people spent on the purchase of entertainment product and the amusement services has declined over the years because of the negative economic crisis that starts in the United States (Barnes 2013, 34). The trend indicates that it is important that organizations and countries maintain favorable economic conditions. Moreover, over the years those earnings that Walt Disney Parks and Hotels attained have depicted a slowdown of profitability from amusement and entertainment (Karson and Murphy 2013, 398). This can be attested by the fact that the profits generated by the Disney theme park reduced by 4% while the revenue collected in 2015 which was $4.4 billion was lower than $4.7 reported in 2007.
Additionally, the adverse economic conditions have resulted in reduced number of tourist both local and international due to the effects of negative business environment for the firm. Therefore, the sale of licensed products by the Walt Disney Parks and Hotels show a similar trend that highlights that economic conditions are mainly likely to affect the profitability of the global business transactions of the enterprise (Brannen and Doz 2012, 78). This makes it hard for the firm to conduct the international operation as the adverse conditions emerging from within the organization are likely to hinder the group's global businesses (Adler-Golden et al. 2011, 67). Consequently, the difference in the exchange rate and the low purchasing power of the people is, therefore, an economic factor that has resulted in reduced decline in the sales of the firm’s products internationally.
Social factors
The Walt Disney Parks and Hotels mainly operate in the entertainment and amusement industry. The company also runs amusement parks, which depict characters and themes that are included in the organization's movies. The amusement and entertainment products of the company are by the demand of the consumers. Therefore the company has to identify the preference and taste of the consumers and deliver goods and products there satisfy the same (Unuvar, Kaya, and Bilge 2017, 249). The Walt Disney Parks and Hotels content and themes indicate how social factors influence the decisions by companies.
Technological factors
The technological factors are crucial in the growth and development of amusement and entertainment industry. Walt Disney Parks and Hotels has the new version of technological equipment’s that enable the company to produce products that are geared towards meeting the customer demand and producing goods of high quality (Unuvar, Kaya, and Bilge 2017, 248). Similarly, the introduction of Blu-ray in the entertainment industry is a factor the enabled the company to switch to products with the version of Blue-ray. Moreover, the company has entered into the mobile gaming market a clear indication that the company is moving with technological change. The Walt Disney Parks and Hotels use the social media tools such as Twitter and Facebook to reach a broad audience and provide an update about the company’s new products and services.
Legal factors
The government creates laws and regulations that regulate the entertainment and amusement industry to ensure that the content and service provided by the company adhere to quality guidelines. Failure to adhere to the regulations and rules set by the governing bodies can result in a penalty of $325,000 for each case reported (Isabella et al. 2017, 8). Similarly, the time frame for commercial breaks for programs for children is also managed under the rules and guidance of FCC. Copyrights and intellectual property regulations are another legal factors that affect the entertainment industry (Thornhill-Miller and Dupont 2016, 111). Similarly, the taxation framework is another legal factor that the Walt Disney Parks and Hotels need to implement to ensure the smooth running of business with the government.
Environmental factors
The company’s environmental regulation and protection guides it in production and manufacturing its licensed goods and services and management of its theme parks. The Walt Disney Parks and Hotels engage in activities such as reuse and recycle to protect the environment. Further, the organization has responded to the pressure by environment protection agency to the conservation of energy and making the parks user-friendly and eco-friendly (Santora and Bozer 2017, 78). Similar, the Walt Disney Parks and Hotels has energy efficient solutions that promote the use of green energy.
Developing a strategic direction
For every organization to succeed it must conduct its Strength, Weakness, Opportunity, and Weakness (SWOT). The advantages of Walt Disney Parks and Hotels include business diversification, financial strength, and high brand equity. All these factors give the company a competitive edge over its competitors as it has built a strong name trough provision of quality products and services. As of April 2016, the company had close to $5 billion cash at hand indicating its financial supremacy (Thomas and Alluru 2016, 15). The weakness that the corporation faces includes business volatility, and loss of subscribers at ESPN (Mary 2015, 78). The success of any business in the entertainment and amusement industry depends on the consumer preference and tastes. Moreover, the company has lost close to 8 million subscribers on ESPN since 2010 indicating that it need to improve on its production and produce products geared towards meeting the consumer needs and preferences (Freeman 2015, 20).
The opportunities Walt Disney Parks and Hotels have included international expansion and investment in new media partnership. There are other potential markets that the company needs to explore to increase its market share especially Africa and Asia. The threat includes economic recession, research and development, and piracy (Campton et al. 2014, 98). The Economic downturn means that people have less money and they will be unwilling to spend it on leisure activities and products on Walt Disney Parks and Hotels products and services.
Strengths
Business diversification
Financial strength
Strong brand equity
Weakness
business volatility
loss of subscribers at ESPN
High production cost
Opportunities
International expansion
Investment in new media partnership
Technology: the internet
Threats
Economic recession
Research and development
Piracy
Recommended strategic objectives
The Walt Disney Parks and Hotels need to consider venturing into the international market mainly African countries, which have diverse wildlife population, which can result in massive profits of the organizations. These nations receive millions of tourist every year, and the company can use such an opportunity to market itself (Celtek 2017, 1089). Additionally, the company can take advantage of the growing use of internet around the world to market itself and its products to ensure that it reaches a wider audience. Additionally, reduce the cost of its services and products and take advantage of economies of scale.
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