Analysis On Walt Disney Direct-To-Consumer & International Business Model

Question

Task: To be completed individually, you are required to prepare a business report that deconstructs an organisation's business model and identifies the critical success factors that make the business sustainable. Your analysis will demonstrate your critical thinking skills and your ability to professionally articulate your findings.
Before commencing, you must seek your lecturer's approval to undertake an analysis of the business you have chosen. The type of organisation that should be identified for study is one that is relatively new, innovative in how they operate, and have most likely been established in the last five years.

Answer

Executive summary
The report emphasizes on the chosen subsidiary company founded in the year 2018, the Walt Disney direct-to-consumer & international business model (DTCI). It is the subsidiary of The Walt Disney. The company is being formed to offer consumers all around the globe a better entertainment experience. Additionally, the company provides sports content along with entertainment with more choices, personalization and convenience than ever before. Along with streaming, work the company is also aligned with technology, international content, and distribution and advertising sales in the single business segment. The Walt Disney Direct-to-Consumer & International (DTCI) business internationally includes ESPN+ sport streaming service along with programmed in conjunction with ESPN, Disney, Hotstar, the leading over-the-top streaming service in India. The company has its majority stake in Hulu.

The report will highlight the connection of Walt Disney direct-to-consumer & international business model canvas along with building blocks to apply the Osterwalder and Pigneur concept. Critical study of the business will be undertaken into consideration. The report will emphasize on the success and on the risk, which the company involves. Supporting to this recommendation for the newly formed company will be offered. ?

I Introduction
The America based famous company The Walt Disney has started a new business segment and a subsidiary named Walt Disney Direct-to-Consumer & International (DTCI). The Walt Disney Company is already indulged in the work of Disney streaming services, worldwide advertising sales for ABC, Disney Channels, ESPN, Freeform, and National Geographic along with other syndicated television sales and channels (Disney Streaming Services, 2020). Therefore, the introduction of Disney’ streaming services is a part of company’s formation which is being placed under direct-to-consumer & international. The subsidiary company Walt Disney Direct-to-consumer & international (DTCI) was founded in the year 2018 (DTCI Media, 2020). Initially Disney UK started offering Disney’s test steaming service, Disney life along with Disney film, books, TV series and music track.

 From there onwards, the company started spreading its work in different regions. It is been noted that though the company initially started streaming its own work however, with increasing demand and acquisitions, Disney also restated its idea to instigate an ESPN branded over-the-top service in the year 2018. With the growing demand and increasing popularity and revenue the company further made acquisition of 21^st century fox also. Nevertheless, the organization’s major plan is to offer better streaming channel service to its consumers all around the globe. Walt Disney Direct-to-Consumer & International (DTCI) main objectives is to offer its consumers entertainment and sports content with ore choices, convenience, personalization etc (DTCI Media, 2020).

II Walt Disney direct-to-consumer & international business model
The company is following direct-to-consumer sales model. This can be observed from the brand name of the company, which makes the clear justification of their Walt Disney direct-to-consumer & international business model (Homepage, 2020). As mentioned in the study of Purcarea, (2018) the direct-to consumers is the business with the help of which companies can directly serve their consumer without having any third party or barriers. The company aims to serve its consumer directly by offering them the best personalized entertainment service.

A. Building blocks
The Walt Disney direct-to-consumer & international business model canvas is for expanding its company to more regions and service people worldwide with best streaming channels and personalized experience. Along with that, the company should focus on the cost reduction of the channels, as it might be difficult for every income group to afford it. (Refer to appendix 1).
1. Customer segment
This segment of Walt Disney direct-to-consumer & international business model signifies that the company is mainly about serving people with streaming channels. Therefore, the main objective of the company is to target every consumer all over the world. The company has already penetrated in different regions to establish its business. Disney’s Direct-to-Consumer & International (DTCI) section comprises of Disney’s international media operations elongating from Latin America to Asia to Europe. The subsidiary business is targeting all types of viewers by providing entertainment as well as sports and other contents. Apart from that, the company is also attracting investors and agencies to collaborate with them through advertising sales and ad technology.

Table 1: Consumer Segment

2. Key partners
The subsidiary company of The Walt Disney initially initiated all alone for streaming different channels, which had content of Disney production. However, with the increase in demand the company primarily made partnership with Alibaba Digital entertainment, Disneylife launched its first collaborated streaming in china in the year 2017. Additionally, the company has acquired stakes in many different companies and became prominent partners with them and other advertising agencies. This part of Walt Disney direct-to-consumer & international business model illustrates that the company has acquired 1/3 stake of BAMTech along with and a choice of acquiring majority of the stakes on the near future (The Walt Disney Company, 2016). In addition, other key partners of the company are ESPN+, Hotstar, and 21st century fox.

Table 2: Key Partners

3. Value proposition
The value proposition of the Walt Disney direct-to-consumer & international business model is offering personalized streaming channels for every age group and choices. The company’s main aim is to serve the people with its service all across the globe. Walt Disney Direct-to-Consumer & International (DTCI) wants to be the leading company in serving people with streaming channels.

4. Key activities
The key action of the business is to stream entertainment based content along with sport and other contents with personalized choices. In addition, the company is also indulged in collaboration work with advertising sales agencies. Walt Disney Direct-to-Consumer & International (DTCI) has already acquired many of the famous channels for enhanced service.

5. Channels
The evaluation of the company shows the main regions or the channels where the work is being conducted and done. The company has different streams of channels to perform its work all across the globe. The provided chart gives the approximate value received from the channels.

6. Revenue stream
This block of Walt Disney direct-to-consumer & international business model signifies that the company earns revenue from different regional all across the world with its streaming service. It is been noted that the company covers almost every region and has stake in major companies.

Table 3: Revenue streams
(Source: Statista, 2020)

7. Cost structure
The cost structure of Walt Disney direct-to-consumer & international business model of the company can be analyzed by going through the expenses made by the company. The major expenses, which form the cost structure of the business, are (What's On Disney Plus, 2019):

• Operating cost 35 %
• Technology cost 30 %
• Marketing cost 20 %
• Administrative expenses 15 %

8. Key resources
The key resources of the company are its employees and the major partners that have collaborated with the company to work. Along with that, the major resource of the company is consumer and the partners of the company.

9. Customer relationship
The relationship between the organization and consumer is getting stronger day by day. By the increasing, demand of the consumer from all over the world the company has made a great impact on its targeted consumers. In addition, the company is trying to enhance its service by providing better quality of entertainment facility to its consumers.

B. Interrelationship
There is a close interrelationship between the discussed components of the building block of the company Walt Disney direct-to-consumer & international business model (DTCI). The company is still highly related and dependent on technology and advancement for better services. The working procedure of the company is solely technical which needs high-speed internet and huge database to complete the working management of the company. Along with that management and supervision is to be needed to handling the collaboration work with different acquired companies.

C. Critical success factor
This Walt Disney direct-to-consumer & international business model mentions that creating the best personalized entertainment experience for the viewers is the most critical yet significant success factor of the company. The company has already acquired many famous entertaining channels and companies in many different regions to become the leading one. In addition, it is also working with adverting sales and agencies to increase its profit and promote the partnered companies.

D. Risk
Though the company is making fast move in becoming the leading streaming channel company however, there are certain risk, which might be faced by the company. The major risk, which is being faced by the company, is the increasing competition. One of the major competitors of the company is Netflix. The rival company has long established foundation in the field of entertainment and mass media. Therefore, it is the main competitor of the company.

E. Business model changes
(Refer to appendix 2)
III Conclusion
From the above report it can be concluded that the new subsidiary company of the Walt Disney has taken over major channels and entrainment field and it’s trying to surpass the all the companies and become the leading brand for streaming channels services. Additionally, it is being noted that the company is using direct-to-consumer business model to perform its activities. Additionally, the report gives a brief idea about the Walt Disney direct-to-consumer & international business model canvas and about its main components. The company has interrelationship with some chief attributes and has observed high success rate in a very less time. Nevertheless, there are certain risk factors, which prevail for the business, which should be mitigating to attain more success in near future. 

IV Recommendation
Based on the above analysis of the chosen company Walt Disney direct-to-consumer & international business model (DTCI) it is been noted that the company has already taken measurable steps to make it a successful initiative of becoming a leading brand of streaming channels. Nevertheless, the company can take some considerable steps to mitigated the upcoming risk and issue and gain some revenue with it. Primarily, as per the deconstructed Walt Disney direct-to-consumer & international business model, the company should make cost reduction in its production areas. Due to high cost, the service offered by the company is also expensive. Secondly, the company should keep the prices of the service a bit low so that every income group can easily afford it. This will attract more consumers in the long-run.

Reference list
Disney Streaming Services. (2020). The Best in Streaming Entertainment - Disney Streaming Services. Retrieved 14 April 2020, from https://www.disneystreaming.com/

DTCI Media (2020). About DTCI - DTCI Media. Retrieved 14 April 2020, from https://dtcimedia.disney.com/about

Homepage. (2020). DTCI Media. Retrieved 14 April 2020, from https://dtcimedia.disney.com/

Purcarea, T. (2018). Direct-To-Consumer (DTC) Marketing Redivivus. Lessons to Learn for CMOs from DTC Companies. Holistic Marketing Management Journal, 8(1), 04-07.

Statista. (2020). Disney revenue by country | Statista. Walt Disney direct-to-consumer & international business model Retrieved 14 April 2020, from https://www.statista.com/statistics/193263/revenue-of-the-walt-disney-company-in-different-regions/

The Walt Disney Company (2016). The Walt Disney Company Acquires Minority Stake in BAMTech - The Walt Disney Company. Retrieved 14 April 2020, from https://thewaltdisneycompany.com/the-walt-disney-company-acquires-minority-stake-in-bamtech/

What's On Disney Plus. (2019). Disney Provides Financial Information on its Direct-To-Consumer and International Business |. What's On Disney Plus. Retrieved 14 April 2020, from https://whatsondisneyplus.com/disney-provides-financial-information-on-its-direct-to-consumer-and-international-business/

Appendices
Appendix 1
Table 4: Original Business Model Canvas

Appendix 2
Table 5: Changes Made In Business Model