Weaknesses

The weaknesses listed here is a result of an analysis made on resource weaknesses and competitive deficiencies of The Walt Disney Company > Studio Entertainment area, mainly with focus on Walt Disney Pictures.

Poor economic performance of the Studio Entertainment area

When looking specifically on the Studio Entertainment area, then there has been a financially negative development. From revenues of $8,713 million in 2004, it only reached $7,487 million in 2005, which was a big setback of 13 percent. But it becomes even worse when looking on the operating income; from $662 million in 2003, it took a whopping setback of 69 percent to only $207 million in 2005. With Studio Entertainment representing 23.8 percent of all revenues in The Walt Disney Company, it is not only a setback of that one division, but the whole company is in a large degree affected by it. The setback is mainly created by a decline in the overall DVD unit sales, caused by years lack of sustainable program, animation, and film production.

Slow response

When creating an animation or movie, then it is a necessity to create a whole community, not only an animation. This has been realised by companies like Nickelodeon that have transformed their website from being a standard promotional website, to being a kid’s community that gives extra value to all their products. But where is Disney in all this? Disney has been weak to adapt to new things, which is taking big bites into their visibility and competitiveness on the net. A good example is a measurement of stickiness. Where Nickelodeon has mastered stickiness on their website with an average of 124 minutes per visitor, Playhouse Disney’s website has only an average of 55 minutes, and no real community to offer. Their main website has an even lower stickiness.

Been the biggest player for too long

Disney’s been around since 1923, and is more or less the soul of animation and cartoons, as McDonalds is for fast-food. But McDonald’s has lost its ability to renew itself. Where as Walt Disney was the essence of innovation, then Disney has been slowing down, and has not had a big success since the early 90’s with the Lion King. And since 3D animation took its first move into the cinemas, then Disney’s animations have not been the same. Disney have not had the capabilities to rise with the new technologies, and have instead been relying on their traditions and old culture of making traditional hand drawn animation movies, which have kept them going prosperous the last many decades (Corliss 2005). They have rested on their laurels for to long, and thereby let their once competitive capability turn into a competitive weakness.

Dependence on Studio Entertainments performance

Studio Entertainment is the core of The Walt Disney Company. Their major brands have all been created here, and especially the Studio Entertainment and Consumer Products division have been closely interlinked, since Consumer Products mainly consists of merchandise from programs, animations, and regular movies. So if Studio Entertainment performs badly, Consumer Products and Parks & Resorts will have a worse basis for reinvent themselves, since they are developing on the brands created by Studio Entertainment.