Disney Business Model and SWOT Analysis – How Does Disney Make Money?

Overview

Who wouldn’t know Disney? Walt Disney is famous for giving children and teenagers a never-ending entertainment by producing cartoons, playgrounds, and many other amusing activities over decades.

The company is the most well-known and was invented by the two genius brothers, Walt Disney and Roy O. Disney. Without them, Disney would not be as popular as today because of their production, Walk Disney. The most unforgettable cartoons were Alice in Wonderland and The Lion King.

As the business is widely recognized and prolific in making money, we will cover how Walt Disney makes money, their business model, and SWOT analysis in the article.

Company Profile

Company Name Walt Disney Co
Website https://thewaltdisneycompany.com/
Founded October 16, 1923
Founders Walter Elias Disney & Roy Oliver Disney
Key People Bob Chapek – Chief Executive Officer, Alan Bergman – Disney Studio Content, Rebecca Campbell – International Content & Operations, Jennifer Cohen – VP Executive of Corporate Social Responsibility, Josh D’amaro – Chairman of Disney Parks, Experiences, and Products, Kareem Daniel – Chairman of Media & Entertainment Distribution, Carlos A. Gomez – Senior VP and Treasurer, Horacio Gutierrez – Senior VP & Secretary, Latondra Newton – Senior VP & Chief Diversity Officer, James Pitaro – Chairman, ESPN & Sports Content
Headquarter Burbank, California, USA
Company Revenue $67.4 billion in 2021
Key Competitors Netflix, Time Warner Cable, Sony, Comcast, CBS, Viacom, Universal Studios

What is Disney? A Brief History

Walt Disney is one of the world’s biggest entertainment industry companies that was established and is headquartered in California, United States. The business is divided into 5 different parts, resorts and amusement parks, studios, products, Disney interactive, and media networks.

The Disney interactive sector focuses on video games and media related to the company. Meanwhile, media networks are at the heart of business growth. While its product sector offers books, magazines, Tv programs, movies, and musical recordings, Disney studios aim at producing the most amazing movies and show to entertain its clients. 

Regarding the founder’s background, Walt Elias Disney was born in 1901 in Chicago, United States. He was a specialist in producing television shows and cinematic photos. With the incredible talent he had, Disney was the creator of the famous cartoon characters Donald Duck and Mickey Mouse.

After years of expertise and popularity, he opened the first-ever amusement park in 1955, which was known as Disneyland. Then, the company continued to construct another one in Florida, which was Walt Disney World.

Until today, there are six Disneylands across the globe located in Florida, California, Paris, Hong Kong, Shanghai, and Tokyo.

How Does Disney Work and What Does it Offer?

So how exactly does Disney work?

Walt Disney is the world’s famous entertainment creation company that has sophisticated segments of products and services. The business includes resorts and amusement parks, media and entertainment, streaming services, ads, and media marketing. Each sector carries out unique and creative excitement to different audiences in a very customized way.

What does Disney offer to its consumers?

Disney is well-known for producing some of the world’s most enjoyable cartoons, movies, Disneylands, and many other joyful activities.

Besides offering the 5 business segments as mentioned above, Disney keeps updating itself by producing a Disney Plus. This digital platform allows users, who are in love with Disney stuffs, can watch a series of Disney movies via smartphones, laptops, desktops, smart TVs, and other devices.

By subscribing the Disney Plus, the users will be able to download free and unlimited moves anytime and anywhere. In addition, they can also check for many Simpsons episodes because the company has cooperated with Fox in the network.

As of now, newly released episodes and films are taken from Disney’s previously utilized catalogue. It contains both current stuff and Disney masterpieces taken directly from the Disney Vault.

It is clear that original programming is part of the idea. However, Star Wars was the most trendy movie during showtime.

Disney Business Model

Media is the primary segment that this gigantic business has been focusing on. To support this sector, the company provides many operations to support its business market, such as distribution, social media, communication and social networking groups.

To keep the company sustainable, the company needs to focus on distributing entertainment spread out across the globe via radio, tvs, social media, or other digital platforms. Some of the big names have been partners with Disney like ESPN, ABC, Disney Channel, and more.

Despite media, the business also keeps an eye on the parks and resorts. They have designed, built, and monitored over 40 resorts and 11 parks in Asia, Europe, and North America. Disneylands are examples of the world’s biggest and most joyful amusement parks.

Regarding Disney products and Disney Interactive, the company features licensing and gaming consoles in Disney stores and other retail stores to generate revenue. Other than that, there are many other online websites and stores, in which consumers can seek for Disney products and games.

In addition, Walt Disney studio is another segment that is in charge of producing movies or cartoons. The sector group collaborates with Marvel Studios, Pixar, Lucasfilm, and other motion picture productions to make the best quality animated films or cartoons.

Disney bought a Marvel business for $4 billion to leverage its entertainment production, in which the company had access to more than 8 thousands characters within the industry.

Disney Unique Selling Propositions

Since the company has a complex structure because they have many segments of service and product distribution, they all have a common goal that is to target big countries.

Many people, from kids to the elderly, know Disney very well. Thus, the company target a huge density of locations, such as Japan, Europe, India, and North America. For this reason, they built 6 Disneylands to attract all customers from these areas.

On top of that, the other main group of customer is kids. In addition to offering parks and playgrounds, Disney also provides gaming consoles, Disney toys and more fun stuff for kids to enjoy.

Furthermore, the company also leverages its retail stores in many other urban areas, where they see a huge potential for direct sales.

Besides physical stores, Disney looks at online platforms to sell the products to its customers. They connect to big-name players like Amazon, Best Buy, Walmart, and so forth. These giant corporate will definitely give direct-sale revenue to the company.

How Does Disney Make Money?

Disney has many business segments under its name, yet they are divided into expense units and income units. Thus, the company makes money only from income units, which are the media and distribution division, Disneylands and resorts, Disney products, and Media interactive.

They are all categorized in three elements:

Direct Sales

Direct selling means the company sells products and services, such as Disney Plus, ESPN, Hulu, and etc. This service streaming generates huge revenue for the company every year.

Basically, the company could gain more than $2 billion in revenue by providing this service every year.

Resorts and parks are also huge income streams for the company as they attract many visitors across the globe.

Other than that, Disney entertaining products are sold in both physical and online stores. Those items include gaming consoles, toys, and so forth. 

Licensing Content

Disney makes money by selling its movies to third-party companies like TV stations, radio, and etc. Also, there is a service called VOD subscriptions, which contains home and theater movies distribution.

Disney SWOT Analysis 2022

A SWOT analysis can assist you in determining which aspects of the organization are working successfully. These are all the crucial success criteria for the company because they differentiate the company from its competitors.

Strengths

  • Well-established entertaining production company for decades
  • All Disney products are reliable and high-quality as they are backed by robust supplier networks
  • The company has a huge cash flow income from many of its businesses.
  • Disney made nearly $6 billion in 2019
  • The company has built a hefty line of suppliers and retailers all over the US
  • A logo is the company’s trademark, which everyone recognizes it
  • The corporate has a wide range of product diversifications to satisfy its customers
  • Marvel Studios is owned by Disney
  • Other brand portfolios that the firm acquires are ESPN, Pixar, Hulu, 20th Century, ABC, and more.

Weaknesses

  • An investment in BAMtech and Hulu saw the company losing $1 billion in 2018
  • Streaming services are less popular than Netflix
  • Disney marketing is still limited, so it does not have much impact on the competitors.
  • The company does not have any special discounts or royalty for certain products and services to their loyal customers
  • Besides the Disneylands and certain movies, the firm has difficult challenges to tackle against other competitors, especially toys and entertaining products.

Opportunities

  • Disney Plus is a movie platform that provides all Disney movies for subscribed users. This service has the potential to exploit and compete with Netflix in the future
  • Boosting media marketing will be another great chance for the company to leverage their market shares
  • Building more mini-Disneylands could be a new area to welcome visitors to other places around the world.

Threats

  • The business only focuses on American citizens, especially their supply chain
  • As technology advances, it would be better if Disney had to invest more in technology building
  • Data storage, cloud, and other private securities need to be protected against the modern hackers
  • Subscription privacy should be improved as people can share their streaming accounts with many devices.