Disney is a major player in the entertainment field. The company was founded by brothers Walt Disney and Roy O. Disney on October 16, 1923. Since its inception, the corporation has grown at an astronomical rate to become one of the most profitable media companies in the world today. As the entertainment industry began to flourish in the 1920s and 30s, Disney Studios created and distributed many different cartoons and movies. However, it wasn’t until 1940 that Disney introduced its first feature-length production entitled “Fantasia.” This was a hit among audiences and allowed Disney to become more ambitious with storylines and plots. Let’s proceed to Porter’s Five Forces Analysis of the company.
Disney bargaining power of suppliers: moderate.
Their primary source of entertainment materials is from third-party providers such as studios and authors who license them to the company. Disney has a wide variety of partners that allow its supply to be sufficient enough. However, should these producers decide not to work with Disney then they would be in trouble since they need these providers to provide the materials for their consumers. Disney manages this risk by continuously building relationships with all of their suppliers and even possibly putting in clauses in contracts that protect them from such a situation.
Disney’s bargaining power of buyers: high.
There are many different types of people who consume media from children, teens, and adults. The company must be extremely careful with the type of media they produce if it will offend or negatively affect any one of these types of viewers. Disney has perfected this to art by producing family films that are acceptable for all age groups while still attracting a large audience.
Disney’s threat of new entrants: moderate.
They currently hold the market share of entertainment providers, but there is always a chance that new companies may arise with better techniques or ideas to outshine them. There are also some countries where they do not have control of their brand so if these territories were to open up then they could be in trouble. However, Disney has been able to avoid this situation for many years now and has not had any problems with the number of new companies over these periods.
Disney threat of substitutes: low.
There are other forms of entertainment that may pose some kind of threat to their business, but it is difficult for them to be more appealing than the films created by Disney. The company has mastered the art of storytelling and truly invests in its projects to ensure they come out with something that is both visually appealing and emotionally stimulating for their viewers.
Disney Competitive Rivalry: High
The competitive rivalry among Disney and its top competitors is high. The companies are always trying to one-up each other by releasing new films and attractions that will draw in a larger audience. Disney has been very successful over the years, but it’s not impossible for another company to take away its market share. For example, Universal Studios has been able to create some very popular films and attractions that have drawn people away from Disney. In order to combat this, Disney is always innovating and coming up with new ways to attract people to its brand.