Disney PESTEL Analysis

1. Introduction

Possibilities are endless in the entertainment industry. Along with its endless pros, the ever-changing taste of audience and diversity remains a challenge for businesses to deal with very frequently. The show's biz greatly relies on external factors, especially the audience. Thus, strategies like PESTEL analysis are essential to analyze the external macro factors directly impacting the company's growth.

The framework evaluates the influence of the external macro-environment factors. It includes Political, Economic, Social, Technological, Environmental, and Legal factors. Via Disney PESTEL analysis, a firm can sketch strategies to be on the profitability of the business. With the increased competition for subscribers and viewership, companies need to be aware of their strengths and weaknesses to face the challenges posed by powerful rivals.

2. Background of Disney

Walt Disney has set a benchmark in the entertainment industry since its establishment in the year 1923. Right from its humble beginning as a cartoon studio to the present day, the company has led others in the field by example.

Over the years, the company has spread its branches and entered the world of television, broadcasting, streaming media, theme park, and more. However, in the present scenario, it is evident that companies like Sony, Fox, CBS, AMC Network are giving Disney tough competition. Disney PESTEL analysis enables the company to identify the scope and threats in the potential market.

2.1 Basic Information of Disney

3. Disney PESTEL Analysis

Political Factors:

The political factors of a PESTEL analysis encompass the government laws, rules, and policies like internal political issues; leadership, foreign trade policy, corruption, political stability, taxation, and more, directly impact the finances of a company. It determines how the local or national government influences the business environment.

• As per the PESTEL analysis, the intellectual property policies of the company favor its expansion in the global market if the company monitors the Marvel movies from possible violation of IP.
• Instability of the trade policies, on the other hand, can threaten the growth of the business.
• The stable political condition of the major markets where the company operates provides the company with a competitive advantage over rivals.

Economic Factors:

Factors like unemployment, job growth, employment rate, interest and inflation rate, labor cost, purchase power of the consumers also influence the business environment. All these come under economic factors. It helps the company build its demand and supply model.

• The steady growth of the mass media and entertainment industry in various developing countries looks promising for the development of Disney, as indicated by Disney PESTEL analysis.
• However, the slow economic growth of countries that contribute a significant portion of the company’s finances, like China, can threaten its progress.
• The company must consider the turbulent economy of the US while reshaping the existing business strategies.

Social Factors:

Social factors have an impact on the short-term and long-term goals of a business. These include cultures, traditions, norms, values, population, demographics, lifestyle, health and safety concerns, and other things. These manipulate the consumer attitude and buying pattern. Thus, affecting the profitability of the company.

• Right from the era of silent films till today, the company has adapted to the changes to suit the audience's taste. With time their content has matured and has become much more relevant.
• Peoples’ inclination toward online activities, especially during their leisure, benefits the company.
• As per PESTEL analysis, the company’s willingness to respect cultural diversity and create content keeping the taste and preference of the diverse audience in mind may help it achieve its long-term goal.

Technological Factors:

Technological innovation, automation, technical awareness, and more may affect the business positively or negatively. These factors come under technological factors. This factor affects production or manufacturing as well as the distribution of goods.

• Technological advancement plays an essential role in the entertainment industry. The use of advanced machines to create better content ensures growth opportunities for Disney, according to this Disney PESTEL analysis.
• Enhanced use of innovative concepts like augmented reality has a great appeal to the new generation. It works for the company’s popularity.
• Increased mobile uses, the introduction of high-quality content, and interactive video games have worked in the company's favor.

Environmental Factors:

The emerging ecological issues have given rise to environmental awareness and sensitivity among companies. The scarcity of raw material, pollution, and such things must be considered while planning business strategies for a sustainable future.

• Climate change remains a challenge for the company since it disrupts the functioning of amusement parks and resorts.
• Dependence on renewable energy has improved the brand image in the mind of people.
• PESTEL analysis indicates that the company’s initiatives related to environmental awareness, improved waste management system, eco-friendly theme parks, energy efficiency ensure growth opportunities.

Legal Factors:

If a business operates on a global market, legal metrics become more relevant. Equal opportunities, consumer rights, health & safety discrimination law, copyright laws, and others come under the legal parameters of PESTEL analysis.

• The company must monitor the content so that it abides by the content guidelines.
• Attention to the environmental laws concerning eco-friendly theme parks and recycling proves beneficial for the company.
• PESTEL indicates that improved strategies to protect consumer rights and copyright laws will help to thrive.

4. Key Takeaways

Disney PESTEL analysis promises to help the company achieve the mission set by the company that is to entertain, inform and inspire people. The company should work on its shortcomings and focus on its strengths, using its innovative technologies and creative minds. It will then be the world’s premier entertainment company.

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5. References

1. Free PESTEL Analysis | Free PESTEL Aanlysis. 2021. 'PESTLE-PESTEL Analysis of Walt Disney | Free PESTEL Analysis', PESTLE Analysis, [online]. Available at: https://freepestelanalysis.com/peslte-pestel-analysis-of-walt-disney/ (Accessed 23 June 2021).

2. Jigsaw Academy. 2021. 'How to Start with Pestel Analysis? A 4-Step Easy Guide', PESTLE Analysis, [online]. Available at: https://www.jigsawacademy.com/blogs/product-management/pestel-analysis/ (Accessed 23 June 2021).

3. Libguides.libraries.wsu.edu. 2021. 'LibGuides: Industry Research: PESTEL Analysis', PESTLE Analysis ,[online]. Available at: https://libguides.libraries.wsu.edu/ (Accessed 23 June 2021).

4. Panmure Institute. 2021. 'Walt Disney Company PESTEL/PESTLE Analysis & Recommendations - Panmure Institute', PESTLE Analysis ,[online]. Available at: http://panmore.com/walt-disney-company-pestel-pestle-analysis-recommendations (Accessed 23 June 2021).

5. SWOT & PESTLE.com. 2021. 'The Walt Disney Company SWOT & PESTLE Analysis | SWOT & PESTLE', PESTLE Analysis ,[online]. Available at: https://www.swotandpestle.com/walt-disney-company/ (Accessed 23 June 2021).