EFE and CPM Matrix for Disney Parks and Resorts
An External Factor Evaluation (EFE) table is important in the critical analysis and evaluation of the various competitive and external factors that affect a particular business. In line with this, the Competitive Profile Matrix (CPM) is also prepared as a way of comparing a business’s performance with that of other rival businesses.
An External Factor Evaluation (EFE) for Disney Park
|Key external factors||Weight (0.0-1.0)||Rating (1-4)||Weighted Score|
|1. Prospect to expand worldwide through establishment of resorts and parks||0.10||4||0.40|
|2. Increase in the number of media networks such as satellite and cable operators hence Disney may reap higher profits.||0.09||3||0.27|
|3. Potential to build more theme parks that will bring additional income.||0.1||4||0.4|
|4. Opportunity to invest in new openings such as travel business.||0.08||4||0.32|
|5. New streams of incomes from targeting new consumer groups.||0.08||3||0.24|
|1. Economic slowdown leading to reduced visits.||0.08||3||0.24|
|2. Shift in consumer behavior, for example consumers currently prefer streaming online instead of buying hardcopy DVDs.||0.1||2||0.2|
|3. Vulnerability to piracy and violation of intellectual property rights in through online streaming.||0.09||2||0.18|
|4. High labor costs.||0.08||2||0.16|
|5. Disney Parks and Resorts’ division performance is vulnerable to currency exchange rates, weather patterns and trends in the travel industry.||0.1||4||0.4|
|6. Product purchases influenced by timing and specific features of the theatrical release.||0.1||4||0.4|
Competitive Profile Matrix
|Disney Company||Universal Studio||Six Flags|
|Critical success factors||Weight||Rating||Score||Rating||Score||Rating||Score|
|Quality of products||0.15||4||0.60||3||0.45||3||0.45|
Disney’s response to its external competitors
As competition in the business world becomes intense, companies must develop effective strategies so as to retain their relevance and profitability in the global market. Disney’s Parks and Resort division has established a number of strategies that enable it to respond to the external environment as well as competitors. Disney Company has been able to create a strong brand image among consumers through advertisements. This is reflected in the high CPM score of 0.48. Over the years, the company has primarily focused on brand marketing. The most popular brands include Mickey Mouse and Cinderella. Universal Studio also spends a large portion of its income on advertisement, while Six Flags has the least expenditure on advertising with scores of 0.48 and 0.24 on the CPM table respectively.
The company also ensures that its products, services and content are differentiated from the rest. This enables the company respond to external threats. In addition, the company seeks to offer the best quality products and services. This is in line with the company’s objective which seeks to increasing sales through introduction of a portfolio of brands that ensures products and services are differentiated (Walt Disney Parks and Resorts, n.d). This is also reflected by the high CPM score obtained in the quality of products. Six Flags and Universal Studios have an equal score of 0.45 in ensuring quality of products, while Disney Company has the highest score of 0.60 in product quality.
The Disney Parks and Resorts Company has embraced diversification as important in overcoming external threats and competition. The company has established itself in four business segments which include parks and resorts, consumer products, studio entertainment and media networks. Thus, if one business segment performs poorly, the company can still recoup from other business segments. Diversification strategy comes second in the EFE table, with a score of 0.32. It is one of the key strategies that the company can exploit and earn huge returns. The company has positioned itself as a global competitor through establishment of branches worldwide. The company has branches in China, Europe and Japan under its global expansion strategy. This is reflected in the CPM table.
Walt Disney Parks and Resorts (n.d). Walt Disney Company. Retrieved from www.disneycompanyprofile.weebly.com/