The Walt Disney Company: Business Environments
Daniel A. Parra Lozano
Lynn University

The Walt Disney Company: Business Environments The success of organizations within their specific market niches and competitive environments is based on a myriad of factors, both internal and external. The detailed overview and analysis of these factors exists within the general business environments of the organization. In order to maintain a leading competitive advantage, managers on every level must actively assess these environments and markets, while making the most appropriate decisions that will allow the organization to sustain leverage when faced with high environmental dynamism and/or complexities. The Walt Disney Company has clearly proven to withstand the test of time, through dedicated market analysis and environmental scanning.
Internal Environment From the company motto, corporate credo, mission and visions statements, to the overall culture and climate of an organization, the internal environment defines the intramural business atmosphere of the entity. The Walt Disney Company’s strong internal environment and clear strategic intent makes Disney an evident leader in its industry. The Walt Disney Company also basks in unparallel name recognition, experienced upper management, and a conglomerate diversification of goods, products, and services offered. Developing strategic management based on a company’s core competencies, makes for a constant, yet not necessarily evolving, dynamic, or sustainable competitive advantage. Although a strong culture and tradition can be a strength for an organization, an unresponsive and dormant internal environment may put the organization at risk by ignoring the dynamic external environment it lies in.
External Environment The external environment of an organization includes the competitive environment and the macroenvironment. This is where companies must identify and assess any threats or opportunities in the market and respond appropriately and in the timeliest manner possible, as to not lose any advantage held within its market. Disney’s changing external environment forced a shift in the company’s primary focus from media content and quality, to merchandising and marketing within emerging distribution channels. These new distribution channels of information are also responsible for increased competition within the entertainment industry, due to accessible and profitable new market trends (The Walt Disney Company SWOT Analysis, 2013).
Macroenvironment
The macroenvironment of an organization, also known as a company’s general environment, includes various factors which affect the entity. These factors include economic, political, legal, technological, demographic, social, and environmental influences. An organization the size of The Walt Disney Company is very easily and strongly affected by the macroenvironment that surrounds it. The macroenvironment is responsible for The Walt Disney Company’s social and economic struggle when expanding new ventures in Europe and Asia. Poor planning and forecasting led Disney to open a new theme park in Paris, France at the verge of a major continental recession. Also, the company failed to fully prepare for the vast cultural differences at the new locations, causing loss of profits. On the other hand, The Walt Disney Company is one of the leaders in corporate social responsibility, giving it leeway within its macroenvironment.
Competitive Environment Within the competitive environment, as the name implies, stands the organization’s competition or industry rivals, both existing as well as new entities. The organization’s suppliers and buyers also form a part of this external environment. The Walt Disney Company’s greatest competitive pressure is resulting from direct industry competitors with comparable size and resources. Some of Disney’s key competitors include Fox Entertainment Group, CBS, Viacom, and Time Warner, among several other industry giants (The Walt Disney Company SWOT Analysis, 2013). Direct competitors such as Time Warner Cable, engage in diversification and pose a direct threat to The Walt Disney Company’s consumer base (Sherr, I. & Ramachandran, S., 2013). Failure to properly analyze and assess the competitive environment within the organizational market segment may eventually result in the deflection of consumers. This could increase marketing costs in order to achieve segment recovery, and reduce overall revenue.
Managerial Decision Making When faced with all of the internal and external factors, along with the corresponding consequences, managers must make and employ strategic decisions to maintain the company’s leverage. Although some situations require rather simple decisions, others are overwhelming and require immediate action (Bateman, T.S. & Snell, S.A., 2013). The Walt Disney Company has demonstrated successful managerial decision-making, ultimately making it a benchmark organization within its market segment and among its top competitors.

References
Bateman, T.S., & Snell, S.A. (2013). Management: Leading and Collaborating in a Competitive World. New York: McGraw-Hill/Irwin.
Sherr, I. & Ramachandran, S. (2013, August 27). Apple TV Adds Disney and Vevo, While Xbox Adds Time Warner. The Wall Street Journal. Retrieved September 12, 2013, from http://blogs.wsj.com/digits/2013/08/27/apple-tv-adds-disney-vevo-apps/?mod=crnews
The Walt Disney Company SWOT Analysis. (2013). Walt Disney Company SWOT Analysis, 1-9.