The Walt Disney Company is known as Disney is one of the famous American multinational entertainment and media conglomerate. The company is headquartered in California. The company is formed as the leader in American animation and media industry. The company is also diversified in television, theme parks and live action film production (Disney, 2020).
VRIO framework is used for analyzing the internal capabilities and resources of the company in order to find the competitive advantage. There are four components of the framework: Value, Rarity, Imitability and Organization. The company which is able to meet all these four requirements is able to achieve the competitive sustained advantage. Here is the detailed VRIO analysis of Walt Disney.
Value
The first component of the VRIO analysis is the questions about the value of the resources. This answers the question of how the resources of the company adds value in the performance and how company exploits the opportunities. Resources are considered valuable if it increases the customer value. Disney is one of the biggest company across the world whose value is around $179.5 billion according to Forbes. The profit of the company ranges from $49.7 billion. Disney is the valuable company as they avail the opportunities and resources very well. The financial performance of the company is so well that they can invest in the new innovative ideas. The international capacities of Disney help the company in marketing of the company (Villa, 2015).
Rarity
The second component of the framework deals with the rarity of the resources of the company. The resources which are acquired by few companies are considered as rare. As these resources grant the company temporary competitive advantage. However, if many companies own the same resources or capability in same way, then it will lead to the competitive parity. The tangible asset of the Walt Disney company is not considered as rare because there are numerous companies with good financial performance and the international facilities. However, its organizational resources are rare. The company is one of the few media giants. The company has huge organization and human resources. Disney’s innovative and creative characters are very rare. The whole Disney adventure and experience is completely rare and amazing (Edwards, 2018).
Imitability
This deals with the imitability of the resources in the organization. Costly resources are usually difficult to imitate, and many companies switch to substitute products and affordable prices. Imitation of the resources can be done in two ways, either through duplication of the resources or substitution of the products. The characters and cartoons of the Disney are so difficult to imitate that no company since many years can copy it or created the content up to that match. Moreover, the exploitation of Disney of its diverse brands has caused the rivals to follow the suit like WB with Justice League, but it did not work. Companies found it costly and impossible to imitate the strategy of Disney (Ntmrtin2, 2019).
Organization
The resources in the company alone cannot bring any advantage in the company until and unless it is not properly organized. The company needs to organize the management system, policies, processes and organizational structure along with environment to be able to realize the valuable, rare and imitability of the resources. Disney has achieved competitive advantage in this because on interaction with customers and business associates. The company is employing over 180,000 people which are dedicated in providing unique experiences to people. Disney provides one of the best customer services. Disney is maintaining 5 resorts across the globe very well. It’s all five business segments are media networks, studio entertainment, resorts and parks, interactive media and consumer products (Villa, 2015).
Conclusion
Disney is among one of the famous companies across the globe. Disney is successfully able to add the value in the resources and the capabilities, by making it rare and difficult to imitate with the help of organized business environment.
| V | R | I | O | ||
| Distribution network | ✓ | ✓ | ✓ | Competitive Parity | |
| Bargaining power | ✓ | ✓ | ✓ | Competitive Parity | |
| Customer Service | ✓ | ✓ | ✓ | ✓ | Sustainable competitive advantage |
| Brand Equity | ✓ | ✓ | ✓ | ✓ | Sustainable competitive advantage |
| Marketing | ✓ | ✓ | ✓ | ✓ | Sustainable advantage |
| Talented HR | ✓ | ✓ | ✓ | ✓ | Competitive advantage |
References
- Edward, Z. 2018. VRIO Analysis of Disney. [Online], Available at: https://www.case48.com/vrio-analysis/12660-Disney, [Accessed on: 15th March, 2020].
- Ntmrtin,2, 2019. Disney and the VRIO Framework (Brand Equity) – Chapter 5 Post. [Online], Available at:
- https://ntmrtin2.wordpress.com/2019/09/29/disney-and-the-vrio-framework-brand-equity-chapter-5-post/, [Accessed on: 15th March, 2020].
- Villa, M. 2019. Disney VRIO Analysis. [Online], Available at: https://prezi.com/4sl6tf5oepyt/disney-vrio-analysis/, [Accessed on: 15th March, 2020].
- Walt Disney, 2020. About us. [Online], Available at: https://thewaltdisneycompany.com/about/, [Accessed on: 15th March, 2020].