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PESTLE-PESTEL Analysis of Walt Disney

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by adamkasi | Jan 29, 2016 | Companies | 0 comments

This is the detailed PESTLE/PESTLE Analysis of Walt Disney

which explains the external factors impacting the
entertainment Company and Industry; Political, Economical,
Social, Technological, Environmental and Legal.

Political Factors
The political environment of a region is one of the essential
features that have a direct e ect on the entertainment and
amusement industry. When a region is politically unstable,
the di erent sectors of the country are adversely a ected
due to it, including the entertainment and amusement
industry. Any changes in the political stability have a
negative e ect on the operations and revenue generated by
the organization. Another area that can have a negative impact on the operations of organization is the
international political and military environment (Walt Disney, 2012).

Economic Factors
The nancial crisis originating in the US has spread in other parts of the world, creating an economic decline in
the various countries. Entertainment industry has also been negatively in uenced due to the adverse economic
conditions. The income spent by the people on purchase of entertainment related products and the
consumption of amusement related services has declined. This trend shows that the economic development is a
favorable condition for an organization, while economic turbulence carries negative implications for di erent
industries, including entertainment and amusement industry. Barnes (2008) has stated that the earnings attained
by the company depicted a slowdown in the pro tability from its avenues of entertainment and amusement. The
income generated that the Walt-Disney theme park had declined up to 4%, while the net income reported the
company was estimated to be around $4.4 billion which was lower than the amount of $4.7 billion earned in
2007.
The adverse economic conditions have resulted in lower number of people traveling, thus the decline in number
of tourists and visits due to adverse economic conditions created a negative business environment for the
organization (Walt Disney, 2012). In addition to this, the sale of the licensed goods of Walt-Disney indicated
similar trend, highlighting the way economic conditions could a ect the pro tability of a global organization. The
exchange rate di erences and the lower purchasing ability of the people is also an economic factor that can
result in a decline in the sales of the companys products in the international market.

Social Factors
Walt-Disney basically operates in the entertainment industry, focusing on the development of entertainment
related content. Along with that, the organization
manages amusement parks which depict the themes and
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characters included in the movies produced by the company. The entertainment and amusement related
products need to be in accordance to the demands of the consumers. The company needs to identify the taste
and preference of its target market and deliver the products accordingly. The main theme that the company
upholds in the content it produces and the themes it illustrates across its parks indicate how the social factors
shape the way a company manages its content. The theme park includes the rides and other amusement related
products which can appeal to the people across di erent age groups.
The changes in economic solidity a ect the purchasing behavior of the people and Walt-Disney has faced lower
income when economic pressures propelled the people to curtail their expenses (Walt Disney, 2012). The
segments of theme parks and licensed products were a ected more as compared to the other segments such as
interactive games produced by the organization. The ratio of tourists as a social factor also contributes in the
development and growth of the entertainment industry as Walt-Disney is able to increase its earnings due to the
people visiting from an international context, thus reaching out beyond the local customers.

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Technological Factors
The technological factors have a strong e ect on the development and growth of the entertainment and
amusement industry. The media entertainment industry needs to quickly adapt to these alterations and
integrate newer versions of technology to produce content that meets the customer demand and at the same
time bring the target market with the high quality content. The introduction of Blu-ray required the
entertainment content producers to initiate o ering the version in Blu-ray (Walt Disney, 2012). The entry of
Walt-Disney in the interactive and mobile games domain is another manifestation of technology induced
changes in the company.
Apart from that, the Walt-Disney world resort needs to integrate the latest forms of technologies to provide the
customers with the enhanced experience and high quality of experience. Another area that has brought about
signi cant changes in the technological area is the introduction of social media as a means of reaching the
target market. Walt-Disney has been using social media tools such as Facebook and Twitter to connect with its
customers and provide the followers updates about companys products (Richwine, 2015).

Legal Factors
The entertainment and amusement industry is heavily regulated by the laws and regulations. The Federal
Communications Commission laws are central to the operations of the organization as they govern the content
that is produced by Walt-Disney. The content developed for the childrens movies needs to strictly adhere the
quality guidelines which prohibit the inclusion of any indecent content (Walt Disney, 2012). Failure to adhere to
the guidelines can result in penalty of up to $325,000 for each case reported of indecent content displayed on
air. Furthermore, the time frame for commercial breaks during the programs displayed for the young audience
is also managed under the guidance from FCC. Another legal factor that can a ect the entertainment industry is
the copyright and intellectual property regulations. The taxation framework implemented on the industry
further formulates a part of the legal factors in the macro-environment of Walt-Disney.

Environmental Factors
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Environmental Factors
The environmental protection regulations guide the company in manufacturing its licensed products and the
management of its theme parks. The Disney amusement parks focus on waste management by including the
activities of recycling and re-use of items to protect the environment. Along with that, the company has
responded to the pressures from the environmental protection agency by taking initiatives in the domain of
conservation of energy and taking steps that make the theme parks more eco-friendly in nature. For instance,
the environmental stewardship program strives to take support from the organizations operating in the
domain of nature conservation. In addition, e cient energy solutions have been incorporated in the WaltDisney theme parks (Disney, n.d).

References
Barnes, B. (2008, November 6). Slowdown Begins to Show at Stalwart Disney. The New York Times. Retrieved
from http://www.nytimes.com/2008/11/07/business/media/07disney.html?_r=0
Disney (n.d). Environment. Retrieved from http://aboutdisneyparks.com/citizenship/environment
Richwine, L. (2015, June 15). Disneys powerful marketing force: social media moms. Reuters. Retrieved from
http://www.reuters.com/article/us-disney-moms-insight-idUSKBN0OV0DX20150615
Walt Disney (2012). Form 10-K. Retrieved from
http://www.sec.gov/Archives/edgar/data/1001039/000119312512479027/d405160d10k.htm
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