Walt Disney Parks and Resorts International Marketing Strategy Report

  1. Summary Situation Analysis

    • Company Profile

From the early 1920s, Walt Disney Company along with own affiliated businesses have projected themselves as dedicated to the production of unique entertainment experiences. It seeks to become the global leader in the production, as well as provision, of information along with entertainment using own brand portfolio. It seeks to keep differentiating its consumer products, content as well as services (Köhler, 2014). In recent times, the company has zeroed in various strategic priorities to remain competitive: creation of uniquely high-quality family content, increasing the accessibility and engagement power of the content by using technology innovatively, and expanding its businesses and brands in the world market (Brandon, 2011).

Presently, its Disney brands include ESPN, Pixar, Lucasfilms, and ABC. It has wide-ranging corresponding platforms for developing additional franchises as well as recycling traditional favorites to ensure that its brands continue to engage its customers markedly. Its remains committed to the development of highly innovative, profitable, and creative entertainment-related experiences globally through its businesses, including Walt Disney Parks and Resorts.

  • Internal Assessment

    • Finances

The sector in which Walt Disney Parks and Resorts establishment operates is a discretionary one. Overall, the business has posted steady growth over the years, save for 2009 when it was adversely affected by the global economic downturn. The business projects its parks as making marked links with millions of consumers yearly. Its revenues in 2013 went up by close to 9%, possibly due to an increase in the number of its domestic resorts and parks, including Hong Kong Disneyland Resort and Disney Vacation Club (Köhler, 2014).

The business principally gets revenues from the park admission fees; sales of merchandise, beverages, and food; accommodation charges; cruise vacation sales; and vacation club facility rentals and sales. Its considerable costs include merchandise costs; labor; beverage and food sold; depreciation; sale and marketing expenses; maintenance and repairs; vacation club unit costs; information technology; and utilities. The main driver of the business’ revenues is high guest attendance and spending in its local parks. The attendance is highly dependent the number of days of passenger cruise ships and the number of available hotel rooms around and within the parks as well as resorts.

  • SWOT Analysis

    • Strengths

Well-Built Product Portfolio

Walt Disney Parks and Resorts has a well-built product portfolio. The portfolio includes resorts along with parks, merchandise, beverages, food, and accommodation offerings. Others are its cruise vacation, and vacation club facility offerings (Brandon, 2011). The portfolio affords the business marked competitive advantages.

Brand Reputation

The Disney brand is renowned globally. In the US, the brand has remained highly reputable for close to a century. Walt Disney Parks and Resorts, just like the other Disney establishments, is viewed as a leading provider of family entertainment. Overall, Disney is a highly respected brand.

Diversification

            The business has its segments spread in diverse economies. The segments generate revenues based on diverse business models. Owing to its operation’s diversity, the business is not strikingly impacted on by external environment, or competitor, changes. Notably, the business localizes its product offerings to match local sensitivities and tastes globally.

  • Weaknesses

Heavy Reliance on North American Revenues

Even though Walt Disney Parks and Resorts has operations in many countries, or economies, it excessively relies on the Canada along USA markets for the largest portion of its revenues. The largest share of own revenues comes from the USA market. There have been calls for the reduction of the reliance over the years.

Limited Growth Opportunities via Acquisitions

            Disney has grown tremendously over the years via acquiring own competitors. Notably, further growth of its establishments via acquisition is now rather hampered by antitrust concerns. The magnitudes of Disney’s businesses have attracted the US government’s attention regularly in recent years owing to considerable market concentration. Presently, Disney has limited capacity and opportunities for acquiring its businesses’ competitors.

Excessive Product Variety

The attractions at Walt Disney Parks and Resorts’ parks along with resorts are so wide-ranging that visitors face significant challenges visiting all of them. The challenges are compounded by the actuality that the parks along with resorts post rather higher visitor numbers each day (Brandon, 2011). As well, the diversity of the attractions at its diverse theme resorts, as well as parks, creates challenges for the business regarding centralized monitoring and management.

  • External Assessment

    • Competitors

Given that Walt Disney Parks and Resorts is a rather diversified entertainment business, it has several competitors in own diverse segments. Its resorts along with parks are in competition with other entertainments, recreational activities, tourism, and lodging services. The business’ park segment has competitors such as the Comcast-managed Universal Studios, Cedar Fair, and Six Flags Entertainment (Köhler, 2014). Recently, the segment experienced additional competition owing to the Universal Studios’ addition of a Harry Potter theme. The theme intensified the attendance to Universal Studios parks significantly. Notably, theme-based park stocks often perform well even in economies that are sluggish since consumers are keener on visiting nearby theme parks than having costly vacation to far-flung parks. The improvement of the USA economy along with the overall reduction of gas prices is increasing the segment’s profitability.

  • SWOT

    • Opportunities

Brand Popularity

The Walt Disney Parks and Resorts brand is markedly popular and is considered the pioneer brand in the theme park industry. The business can leverage the brand in support of its additional expansion (Brandon, 2011). The business can invest in bolstering the brand via marketing to lay a good basis for increasing its future revenues.

Experience in Running Amusement Parks

The business has considerable experience regarding the running of amusement parks. It can exploit the advantages that come with the experience in checking the effects of emerging and extant competition (Kurtti, 2009).

Growth of the Tourism Sector Especially In Emerging Markets 

Overall, in recent, the tourism sector has experienced sustained growth in many countries. The growth is expected to continue. Walt Disney Parks and Resorts can anticipate taking in more and more visitors, especially from overseas, in the days ahead. The business can grow own client base with diverse promotional offers such as manifold visit passes, hotel stay discounts, and yearly passes.

As well, the base can be grown over time through the introduction of new attractions in its resorts as well as parks. It can take advantage of the growth via the establishment of operations in emerging tourism markets (Köhler, 2014). As well, it can take advantage of the growth via leveraging on emerging technologies to support its innovativeness, especially regarding the meeting of the tastes of new consumer generations.

  • Threats

Strong Competition

The resort along with park industry is typified by intense competition. The Walt Disney Parks and Resorts’ competitors are quite experienced and seasoned. They can rapidly eat into the business’ share of the market if its fails keep innovating. As noted earlier, its resorts along with parks are in competition with other entertainments, recreational activities, tourism, and lodging services. The business’ park segment has competitors such as the Comcast-managed Universal Studios, Cedar Fair, and Six Flags Entertainment. Recently, the segment experienced additional competition owing to the Universal Studios’ addition of a Harry Potter theme. The theme intensified the attendance to Universal Studios parks significantly (Köhler, 2014). Notably, theme-based park stocks often perform well even in economies that are sluggish since consumers are keener on visiting nearby theme parks than having costly vacation to far-flung parks. The improvement of the USA economy along with the overall reduction of gas prices is increasing the segment’s profitability.

Macroeconomic Condition Changes

            Given that Walt Disney Parks and Resorts operates in a sector typified by marked consumer discretion, product price increases affects consumer demand significantly. If the business reviews its product prices upwards, there is a high chance that its customers will source for products from its competitors or shift their demand from consumer and entertainment products altogether. That would contract the business’ revenues, as well as heighten its costs, significantly. Global economic recessions would contract the business’ revenues, as well as heighten its costs, significantly too, by reducing spending on entertainment products.

Foreign Exchange Instability

Besides, spending on entertainment products can be reduced by adverse foreign currency exchange rates on the international stage. The rates affect supply, as well as labor, costs in foreign markets and reduce the unit value of the revenues received by businesses from overseas. Political, as well as economic, conditions in particular countries can reduce their capacities for hedging exposure to fluctuations in the rates.

Others

There are various other threats facing Walt Disney Parks and Resorts. They include the risk of unfavorable weather conditions, health concerns, and natural calamities; and labor disputes. Others include intellectual property litigations, staff welfare and pension disputes, financial market turmoil, adverse legislation, consumer consumption and technology pattern changes, business seasonality, data protection issues, and non-renewal of carriage or lasting programming contracts (Brandon, 2011).

  1. Possible Strategic Options

    • Signing-Up Foreign Currency-Derivative Contracts

As noted earlier, spending on entertainment products can be reduced by adverse foreign currency exchange rates on in the global market. The rates affect supply, as well as labor, costs in foreign markets and reduce the unit value of the revenues received by businesses from overseas. Walt Disney Parks and Resorts can manage the risk associated with the fluctuation of the rates by signing-up foreign currency-derivative contracts for hedging anticipated denominated business income-exposures of foreign currency for particular periods.

  • Adding Competitive Themes To Its Parks

As noted earlier, the resort along with park industry is typified by intense competition. The Walt Disney Parks and Resorts’ competitors are quite experienced and seasoned. They can rapidly eat into the business’ share of the market if its fails keep innovating. The business can remain competitive by adding competitive themes to the parks it manages. As noted earlier, recently, Universal Studios grew its competitiveness significantly through the addition of a Harry Potter theme to its parks (Brandon, 2011). Walt Disney Parks and Resorts can use the same approach in bolstering its competitiveness.

  • Entering Emerging Markets

Walt Disney Parks and Resorts can take advantage of the entertainment industry’s growth via the establishment of operations in emerging tourism markets (Köhler, 2014). That will reduce its excessively reliance on the Canada along USA markets for the largest portion of its revenues. As noted earlier, there have been calls for the reduction of the reliance over the years.

  1. Recommended Strategic Option

Walt Disney Parks and Resorts should establish operations in emerging tourism markets. According to Trefis Team (2012), Disney has a significant chance for expansion overseas through establishment of operations in emerging markets, including Latin American and Asia Pacific markets. Other high-growth markets that can bolster the business’ revenues significantly include Vietnam, Turkey, Brazil, and Colombia. These markets are growing quite faster, faster than its traditional North American and European markets according to Trefis Team (2012).

  1. Recommended Marketing Mix

Markets use marketing mixes as choice business tools. A marketing mix can be used in determining a given brand’s offer or product’s offer. Walt Disney Parks and Resorts should have a definite marketing mix to guide its expansion overseas through establishment of operations in emerging markets. With respect to products, the business should introduce its traditional products to the emerging markets. The traditional products are resorts along with parks, merchandise, beverages, food, and accommodation offerings. Others are its cruise vacation, and vacation club facility offerings (Brandon, 2011). The portfolio affords the business marked competitive advantages.

Given that the emerging markets are typified lower per capita than the business’ traditional markets, it should consider adopting lower product price regimens. When developing the regimens, the business should consider how the prospective consumers in the emerging markets perceive product value. Owing to the pervasiveness of various information technology devices in use in almost all markets, the business should exploit social media capabilities in promoting its products in the emerging markets (Köhler, 2014). The business can distribute the products to the different places, or markets, via selective distribution.


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