Trey Dick
Policy (Dr.Tan MWF 9AM)
Porter Five Force Analysis (Disney) 3-6-2016
Threat of Competition: MEDIUM/HIGH:
Disney operates within very mature industries that are, for the most part, highly consolidated. The major players within the industries are well diversified and proven. For this reason, there is a very high level of competition between the companies within the specific sectors. As Disney is a conglomerate, there is little to no competition across the number of industries that the Company competes within. For this reason, companies that compete across multiple industries can leverage their branding and
decrease competition.
Threat of New Entrants: MEDIUM:
The threat of new entrants is medium as although there are major players within the different industries, there are smaller players entering the markets with lower cost structures and reach. For example, within the hotel industry and resort industry, although there are major players such as Hilton and Marriott that dominate a large market share, there are an increasing amount of boutique hotels that have entered the market as of late. These hotels are more regional in focus, and are less capital intensive to start up the brand. The same can be said in the movie and film production business. In this business, although there are many household brands competing for market share, small companies are continuing to enter the market with low-budget films that are becoming competitive. With the
advancements in technology lowering the costs of production, smaller firms are able to enter the market and become competitive.
Threat of Substitutes: MEDIUM:
While there are very few direct product substitutes, since the industries are all consumer discretionary, there are many substitutes that fight for customers. What I mean by this is that while there are few substitutes for hotels/motels/resorts, other than of course staying at home, that there are other things that consumers can do for fun rather than travel and stay at a resort. Therefore, such things as movies, shopping, etc. could in fact be considered substitutes for the many different product offerings for The Walt Disney Company. That beings said, within the more specific industries such as the cable network industry, there are some substitutes for the types of channels that cable providers can choose to purchase from the cable network suppliers, but there are few that have no substitutes, such as ESPN which is owned by Disney. Although there are other sports channels, no network provides the wide variety of sports event coverage ESPN’s programing has.
Power of Suppliers: LOW:
Trey Dick
Policy (Dr.Tan MWF 9AM)
