Analysis on the business model of Walt Disney Company

Analysis on the business model of Walt Disney


“The Walt Disney Company was established on October 16, 1923, created by Walt Disney and his brother Roy Disney was called the Disney Brothers Studio after renamed Walt Disney production companies. On February 6, 1986, officially changed its name to the Walt Disney Company.”(Sumber, 2011, p.11)

After years of development, it has become a successful multinational corporation, whose business involves multiple areas of movies, theme parks, real estate and other entertainment industry. “Disney has developed into a technical system, including not only the hardware, facilities, machinery and processes, and told all linked transportation, dissemination and information network, and the efficient operation of a large number of employees, and a series of rules and regulations.”(Capodagli, 2006, p.63)

In this article, the operating mode of the Walt Disney Company will make a brief analysis. At the same time, described the advantages of the Walt Disney Company, will also be compared with its main competitors. Industrial environmental analysis

The Walt Disney Company's main business scope is the film industry, so it is necessary to do the approximate analysis of the movie industry environment.

Comparative analysis of existing competitive enterprises

Film competition is quite fierce in the U.S. alone, 15 companies of similar size with the Walt Disney Company, like Warner Bros, Columbia Pictures Inc., the Universal Pictures Corporation, DreamWorks and so on. Various film companies have their own advantages in the market segments weakened competition the Disney company occupies an important position in the cartoon.

Cost Structure Analysis

“The film industry is a high-investment, high return, high-risk industry.The movie industry is characterized by the initial investment is high, but the

marginal cost is relatively low. The inputs of the movie is mainly filming and publicity, and the cost of producing a copy negligible.”(Graham, 2009,


Product differentiation analysis

Film can be classified as: commercial films, small budget films. Commercial

films are generally monopolized by some of the larger film companies shooting commercial films need high cost producers more confidence in the

well-known large companies.Small budget films is a small-scale film company only business that can compete with large companies, it requires investment not shoot movies may get a great success.

Potential competitor analysis

In the film industry, requirements of potential competitors are high. The main obstacle of the film company is known, set up a film company does not need too much money, straight fame, and there will be a large consortium of investment. Like DreamWorks, Spielberg's fame makes it famous.

Profitable manner and direction of development

“The Walt Disney Company is a successful multinational companies, in 2011, it ranked 65th in the world top 500 enterprises.”( The New York Time, 2011)

Analysis on the business model of Walt Disney Company

The above is the Walt Disney Company in 2011 output

(Sumber, 2011, p.43)

The Disney Company has the following four key business areas

1.Studio Entertainment

The production of a variety of videos, cartoons, TV shows, recording and staged theater. Belonging to the leader of the Disney company in this industry has a number of subsidiaries and a number of well-known brands, film studios and a variety of film and television organizations subordinate program suppliers for the four major television networks in the United States, more than 50 feature films were produced annually, also created a large number of television programs containing role image. In addition to the works of their own creation, the company also purchased other movies and television manufacturers sold to the cinema, television and home video markets. Group name issue, business video, international companies owned or grant the right to use the proxy Disney movie, television, audio and video programs issued in the United States and the world countries.

2.Media Networks

Companies are usually at their own expense to the production of programs produced by or purchased from other programs, vendor programs broadcast rights, and subsidiary stations play these programs in varying amounts to pay compensation. The sale of commercial advertising time in the program is the company's main source of income.

3.Parks and Resorts

Company through a variety of domestic and international advertising and promotional activities of the Disney World amusement project marketing, in

order to attract tourists from around the world. Each theme park through the form of a long-term agreement with Disney's other companies to establish business relationships.

4.Consumer Products

This income is mainly intellectual property transactions. The varieties include the licensing of Disney-related toys, gifts, furniture, stationery, sports goods and so on. The publishing including comics, art picture books and magazines. The profits of the license from operating activities rely mainly on the use of a fixed percentage of fees extracted from the wholesale and retail sales pricing. Extract user fees, the company also actively developed with independent intellectual property goods, constantly seeking new role of image that can be used to license the product, and to participate in creative writing and illustration in publications with a license significance.

“In Disney's four business areas income accounted, the largest is media network, accounting for more than 40% of total revenues, and look at the situation from the past three years, this ratio has been steadily rising. Theme parks and playgrounds of its revenue to about 29%, and also to maintain the momentum continued to increase, Entertainment, and related consumer products in the past three years show a downward trend in the proportion of its business.”(Smoodin, 1994, p.89)

So it can see from its business structure the future Disney development focused direction. Removing been stability Entertainment, we expect media networks will continue to occupy the primary income contribution related business around this business will benefit.

Industrial advantages of the Walt Disney Company Innovation

Animated film to develop, must adapt to the times, the only constant innovation, be adjusted to meet the tastes of children in different periods, can always win opportunities. Disney will focus on this point, from its inception, and therefore have been walking in the forefront of the animation industry.

The combination of globalization and localization

Disney looking for new and interesting stories from a variety of backgrounds and cultures, so all of the videos can each have their own wonderful. Invariably go to various cities and towns of the world to find classic story is not enough. Adaptation of foreign stories can bring at least two benefits:

First, it can increase the diversity of Disney products, giving a global impression of the Disney products; already experienced these stories in the local test of time, it can reduce production risk.

Superb production technology

First of all, Disney hired top production talent across the United States and around the world, such as "Mulan" workforce alone, “about 700 artists, cartoon makers and craftsmen. Second, Disney has the most state-of-the-art animation facilities. Orlando studio experiment for a year and a half in computer image (CGl), made several technological innovations when they made “Mulan”. As a result of these innovations, the audience was able to see on the screen the exciting scenes of the 2000 Hun soldiers on horseback through the snow-capped mountains, all-out offensive.”(Capodagli, 2006, p.133)

Mature positioning

Walt Disney Company their audience a clear positioning for young people. The main products of Disney are animation and animated image. The young people are the most vulnerable to this product to attract and stimulate consumer groups. Part of the animation company that adults can also appreciate the wonderful cartoon, so the development of a part of the animated film suitable for the adult market, but the results are not satisfactory. Disney insisted: animation should bring joy to young people, while the adolescent market share is also huge, adhere to this philosophy, Disney has achieved the status now.

(Sumber, 2011, p.55)

As can be seen from the figure, 0-24 years old movie going population accounts for about 25% of the total, which is a very large market share. Above the key to success is the Walt Disney Company, and deserve to continue to maintain.


The Walt Disney Company, is a veteran film and television company, is one of the eight major film and television companies in Hollywood, after 90 years of development, it has been indispensable share of possession in the market. It has the world's leading market business model and development model. In today's increasingly competitive market, it is also by continuously adjusting for the market and the world economy, no longer rely solely on traditional video released to profit, but the transfer market center, media networks and consumer products to the maximum of profits. The Walt Disney Company will enter a new expansion phase, this is accompanied by countless people walked half a century of joy kingdomwill get more attention in the future development.


Graham, M. (2009). Media convergence, UK: Palgrave Macmillan

The New Y ork Time.(2011). Retrieved 21/03, 2011

Sumber, W. (2011). Disney Wiki Series: Books LLC

Capodagli, B. (2006). The Disney Way: Harnessing the Management Secrets of Disney in Y our Compan y U.S.: McGraw-Hill Companies

Smoodin, E.(1994). The Disney Way: Disney Discourse: Producing the Magic Kingdom U.S.: Rout ledge

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