Walt Disney Company has achieved successive milestones in the fields of amusement parks and resorts, mass media, and the entertainment industry. The company has created a difference by keeping itself well-informed with the newly emerging and latest trends. Disney is facing certain opportunities as well as threats prevalent in the business environment of the entertainment industry. This PESTLE/PESTEL analysis has revealed the factors that signify the external factors and their impacts on the macro-environment of the company’s business. The widespread opportunities along with threats are visible due to prevailing market conditions and the dynamic factors affecting the business. The dynamics in technology and sociocultural trends are giving opportunities as well as posing threats to the conglomerate’s mass media industry and amusement parks industries, respectively. Therefore, the company must address these dynamics to cope with the latest trends in the macro-environment of these industries. By addressing the factors acting remotely revealed in this PESTLE/PESTEL analysis, the company can gain advantages in stability, sustainability, and long-term development.
The company’s top hierarchy and managers must view these external factors as significant opportunities besides threats that can influence the company’s financial position. Despite the intensifying competition in the industry, Disney Company still has many opportunities to exploit, as revealed by this PESTLE/PESTEL analysis. Industries like Viacom, Time Warner, Universal Studios, Sony, and Comcast have already caused the competitive rivalry to swell in the industry environment. Still, the company can optimize its growth and resources by making decisive planning and shrewd strategic actions related to external factors. To demonstrate, an innovation that is the sine qua non in remotely affecting technological factors can open new horizons for Disney Company. In the same way, each factor throws opportunities for the company to grow and stabilize its business growth and operations. These gains only depend on the effectiveness and readiness of the company’s managers and employees to address the threats and by exploiting the opportunities. The PESTLE/PESTEL analysis is explored in detail in the succeeding discussion.
Political Factors Impacting the External Business Environment
Policies and regulations imposed by the governments and their impact on the normal working of the businesses are discussed in detail. This section of the PESTLE/PESTEL analysis sheds light on the political macro-environment of Disney Company. These political factors shape trade relations and the access of the public to the entertainment business. For instance, the rights of intellectual property can affect the business. The next given political factors influence the business realm of The Walt Disney Company:
- Growing emphasis on intellectual property rights (opportunity)
- Global shift in free trade treaties (opportunity and threat)
- Stable governments and markets in developed nations (opportunity)
The political forces around the developed world have emphasized the protection of intellectual property rights. The protection of these rights allows the company for more growth and stabilization. These conditions can create an optimized business environment for the company. These policies protect the company from global IP violations, thereby aiding the company in stabilizing its growth for longer periods. At the same time, the shift in free trade treaties and policies exerts a threat to the company in terms of creating unstable work conditions with business environment instability. On the contrary, these new trade policies, which focus on the agreements of international trade, allow the company to expand its business beyond the US borders. Thereby, if Disney Company considers such an opportune it with the application of effective strategies, the company can considerably increase its business. This PESTLE/PESTEL analysis gives insight into the political factors exerting their influence remotely on the business of the company. The stable economies of developed countries such as the US, Europe, or Canada, where the company is already flourishing in terms of growth and development, give more opportunities to it. These stable markets can optimize stable growth and development for the times to come. By and large, the conglomerate can improve its business performance and growth if it shifts its focus to exploit these opportunities.
Economic Factors Affecting Disney’s Business
This section of the PESTLE/PESTEL analysis gives insights into economic factors that are prevalent in the company’s remote environment. As the company is operating majorly in the US market, these economic factors give views of the American economic conditions and business working environment. In general, the company has a global outreach to business there; it is not limited to the economic conditions of the US market alone. The subsequent external factors are responsible for shaping the economic business conditions of the company. Success depends on managing these conditions strategically for the long-term growth and benefits:
- The rising economic markets of developing states (opportunity)
- Higher scales of disposable income growth (opportunity)
- Sluggish growth of the Chinese Economy (threat)
This analysis reveals the impacts of economic factors on the business environment and eventually on business growth and development. The first factor in this aspect is the rising economies of developing nations. Many developing nations are providing immense growth opportunities to entertainment giants such as Disney to exploit these regions with bulky populations. To demonstrate, countries in Asia like Pakistan or India give impressive opportunities to the company as their markets are developing with better economic indicators. In the same way, higher scales of disposable incomes mean that the customers can entertain themselves more due to the rise in their incomes. However, the decline in the Chinese economy is a threat to the company. Still, China is playing a significant role in the growth of the company. Therefore, this analysis reveals that the company has significant growth opportunities in terms of growing markets in remote countries besides the rise in disposable incomes. Nonetheless, the conglomerate must devise strategic policies to address the threats.
Social/Sociocultural Factors playing in Disney’s Business Environment
This segment of the analysis reveals the significance of social trends, waves, and emerging beliefs that impact the business environment by shaping the macro-environment of the company. The main implications of social/sociocultural factors are the behavior of customers and employees. Consumers’ behavior towards amusement parks, video games, movies, or television shows is significant. The company can strategies the products after analyzing these behaviors and can contribute to the success of the product. Given these factors, the company experiences the following factors which are affecting the business environment linked to the social/sociocultural factors:
- Promising attitudes towards leisure activities (opportunity)
- Expand in online activities (opportunity)
- Rise in cultural diversity (opportunity and threat)
The company can grow organically by devising strategies that promote people’s goodwill towards the company. This would increase the interest of the public in buying leisure and the company’s products. The next trend is the increased interest of the public in going and buying online. The company must consider optimizing the e-sale of its products to increase revenue from digital transactions. In comparison, the rising diversity in cultures and varying traditions put a threat to the company’s growth of certain products. However, the company can exploit this opportunity in the long run by deploying diversity to its products. Although the company is facing aggressive competition in the business environment, as shown in the analysis by Porter’s model, it can enhance its competitive edge by addressing these situations. These macro-environmental factors can foster the growth and development of the company if it devises a strategy to exploit these social factors based on the behaviors.
Technological Factors prevalent in the External Business Environment
Existing technologies impact the remote environment of the company and shape business growth and structure. This section of the analysis helps to evaluate the role played by the technologies prevalent in mass media and entertainment products, along with the techs used in resorts and theme parks. To demonstrate, the use of newer technologies in digital film production enables the company to compete in the industry environment by producing quality products. The succeeding factors are responsible for impacting the business space of the company technologically:
- Increasing R&D in the industry (opportunity and threat)
- Penetration of mobile device (opportunity)
- Increasing fame of augmented reality (opportunity)
The technological rift in high research and development and the allocation of huge amounts for R&D by several companies have increased competitiveness through innovation. The use of computer-generated images in the products yields better results. Thereby, this technological factor bears threat by giving the tougher competition in the industry as well as the opportunity to grow by innovation. The next factor related to the penetration of mobile phone technology holds the opportunity to grow the revenue of the company continually. The company can increase its customer base beyond borders through these devices. Furthermore, Disney Company can add resources and growth along with the brand reputation by exploring the newer trends of augmented reality in depth. The company can benefit from this technology by integrating this technology into its products like video gaming. Therefore, the growth opportunities are present for the company in the remote factors linked to technological advancement.
Environmental/Ecological Factors affecting the business
Environmental or ecological factors are prevalent in the remote working environment of industries. The company is prone to threats, opportunities as well as the limits of this factor. This PESTLE/PESTEL framework explores the impact of the environment on the business. The company is prone to these factors for many reasons. The availability of natural resources for the company and the impacts of climatic and weather conditions on industrial activities are significant. The amusement parks and resorts, film, and series production, etc., are all affected by these natural conditions. The following listed factors prevail in the business environment of the company:
- Changing weather cycles and patterns (threat)
- Excess accessibility of renewable resources (opportunity)
- Increased provision for sustainability in industries (opportunity)
The changing weather cycles and patterns are affecting the industry’s business mainly because it threatens the resort operations and maintenance of theme parks. However, the increased accessibility of renewable energy resources is providing the opportunity to foster growth and build a brand reputation. The company can use these renewable resources to store and utilize these energy resources to enhance long-term growth. Therefore, the company can increase its long-term sustainability and industry support, as shown in this PESTLE/PESTEL analysis. This could further improve The Walt Disney Company’s corporate reputation, social responsibility, and long-term environmental sustainability. Customers’ expectations and experience can be enhanced by employing these techniques. To sum up, the company is facing opportunities in terms of environmental/ecological factors relevant to the firm’s business growth, mainly to foster long-term sustainability and stability.
Legal Factors shaping the Macro-Environment
The legal factors relevant to this industry, as examined by PESTLE/PESTEL analysis, reveal the governmental laws and regulations related to the working and operations of the industry. The company is affected by those policies and laws which are impacting the recreational and leisure expectations of the company’s macro-environment. The industries are liable to follow these measures to ensure the smooth functioning of their business depending on their region, state, or country. To demonstrate, the European and American policies and regulations related to entertainment and mass media businesses are analyzed in this section of the Analysis. Thereby, the following mentioned factors prevail in the legal scenario and collectively shape the industry environment:
- Preservation of Environment (opportunity)
- Enlightening legal laws for consumer protection in developing states (opportunity)
- Protection of intellectual property rights (opportunity)
The emphasis on environmental preservation around the globe by national and international institutes is evident. The laws and policies are taking place at the regional, national, and global levels to protect the environment. The company is prone to these regulations as the company is extensively operating in natural environments. The theme parks, amusement parks, and resorts are operational in natural environments. The maintenance of these spots, along with the creation of new ones, requires consideration of environmental regulations. The construction of new sites requires a change in the ecology of the land, thereby activating ecological or environmental laws. Moreover, the next imperative factor linked to legal factors is the protection of consumer rights. Having these regulations can ensure consumer satisfaction along with the fulfilment of the law, thus adding to the global reputation of the company. The company is also benefiting from the regulations related to the protection of intellectual rights. Disney Company produces unique recreational movies, characters, trademarks, and merchandise. With the help of intellectual property rights, the company can secure its copyrights and patents. Therefore, the overall legal factors as analyzed in this dimension of PESTLE/PESTEL analysis can optimize better sustainability, customer loyalty, and preservation of intellectual property.
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