Disney Streaming Strategy Targets Mexico Market

Running head: COMPETITIVE ANALYSIS & STRATEGY
1
COMPETITIVE ANALYSIS & STRATEGY 13
Table of Content
Executive Summary
3
The Target Country
4
Competitors
5
America Movil 5
Amazon Prime 7
Netflix Strength & Weaknesses
8
Porter Generic Strategy
10
Recommended Competitive Strategy
10
Conclusion
11

Summary 11
Reference 12
Executive Summary
The Walt Disney Company has a generic strategy for
competitive advantage that capitalizes on the uniqueness of
products offered in the entertainment, mass media, and
amusement park industries. The company grows through
innovation and creativity, which enable the business to compete
against large firms (Panmore). By pairing up with Netflix will
make Disney one of the most powerful companies in Mexico.
Disney has a popular and strong brand, which is among the most
easily recognizable in the world. Through this strength, the
company presents itself as a decent and family-oriented
business suitable for all customers. This internal factor helps
manage customers’ expectations, which tend to be positive
relative to the reputation of the Walt Disney brand.
Walt Disney Company is expanding its company by going to
new ideas that will keep them on the competitive edge with
their competitors. New direct to consumer service where the
company will stream Disney based movies and television
programs. The Disney brand will be streaming services do to the
high demand of video on demand services. In 1954,
with Disneyland, an anthology series hosted by Walt Disney
himself, it became the first movie studio to strike out for the
wild west of television. Since then, Disney’s dominance has

only grown.
Walt Disney and Netflix, a media provider based in California
and a world’s major player of video streaming services industry.
It is a multibillion dollar company with annual earnings of
15.79 billion dollars. It is also a global company with 137.1
million subscribers around the world. It offers TV series,
movie series, features films and documentaries which
subscribers can view in the internet. In the video streaming
industry is a 124 billion dollar industry and it is expected to
grow at an annual rate of 19.6 percent (Grandview Research
2019). The Rapid Growth Rate is attributed to extensive usage
of online video. Netflix holds a significant portion of the global
market segment. Netflix and Walt Disney will be merging and
targeting Mexico to become the biggest streaming company in
Mexico. The Walt Disney Company positions itself as one of
the leading firms in the entertainment, mass media, and
amusement park industries. This position is achieved through
business strengths that address weaknesses, opportunities and
threats (the SWOT factors) in the global market. The Walt
Disney Company must possess the strengths to withstand the
negative effects of weaknesses and threats in its industry
environment.
The Target Country
Mexico is a country in located out the southern portion of North
America, with over 126 million people and an economy that is
15th largest in the world. Its telecommunication industry is well
established and it is among the largest in Latin America that
poeses and great area to target the communities with internet
connections. Its mobile technology and internet infrastructure
are well developed and people across the country have access to
internet. Internet infrastructure is well developed with more
than 120 domestic earth satellite stations and extensive
microwave radio relay network. Internet is very accessible in
this country which makes it a good target for a live streaming
company like Netflix. Consumers have access to mobile and

internet technology. Mexicans are the most connected to the
internet, in 2017 alone, about 79 million Mexicans are
connected to the internet in a single day, they have smart
phones by the age of six and males between 18-34 are the most
connected to the web more than anyone else in any country
(mexico.mx, 2019). The country also holds fourth place in the
world for users that spend more time on social media. They
could easily be reached out by Netflix marketing activities such
as social media marketing and internet marketing and
promotions. Mexico is therefore a very huge market and it will
bring enormous profit to Netflix.
Competitors
The primary competitors of Netflix in Mexico are America
Movil and Amazon Prime. America Movil is a Mexican based
telecommunication company that has recently decided to enter
the video streaming business with its segment Claro Video.
Amazon Prime is a live streaming service offered by the
Amazon.com Inc. It is a global company and a primary
competitor of Netflix in the global Arena. Amazon prime enter
the Mexican Market through Amazon.com.mx. Prueba prime.
America Movil
Strengths
America Movil has a high brand recognition as it is a local
company. It has also enormous resources with an annual net
income of 2.2 billion dollars capable of investing enormous
amount on marketing and advertising to gain strategic position
(Annual Report 2019). Its video streaming segment –Claro
video – has over 1 million subscribers in the Mexico (Dela
Fuente, 2015). Its first original content production is a psycho-
thriller series La hermanidad (the Brother Hood) acquire a huge
number of followers, allowing the company to produce original
content production from other genre such as Drama and comedy.
Claro is able to do this because it is familiar with the culture of
the people and knew their language. It knows the likes and
dislikes of the people when it comes to films and movies of
various genre. Also as a local business, the company knows how

to explore the legal and political environment of the country,
knows the loopholes and everything that one needs to do in the
legal and political arena. It will not have problem with tax laws
of the country and know when to and when not to conduct
business during heightened political atmosphere. Its knowledge
of the country’s political and legal environment makes
American Movil capable of mitigating threat. It also utilize
cost advantage strategy as it offers subscribers 5 dollars a
month compared with Amazon Prime 13 dollars and Netflix
12.99 dollars (Harrison & Edwards, 2012). If economy of the
country slows down American Movil/Claro Video competitors
will have a hard time reaching out to its customers as they will
prefer low cost streaming. Claro video, with its product
differentiation strategies can deal with economic slowdown
mitigate the threat and survive while foreign competitors will
not.
Weakness
It is new in the business; hence it has little expertise in the
industry including marketing and technological knowhow. With
its relative short experience in the business, it will have a hard
time competing with Netflix as the latter, had the knowledge
and technical expertise to reach to tech savvy customers.
American Movil has enormous resources but these resources are
invested on the Telecommunication and Wireless industry and
only allocate small budget for the live streaming segment. Thus
compared to its competitors, the Claro Video segment is a small
player. It has no separate research and development department
which is crucial in live streaming industry. The internet is not
designed to stream high quality video to millions of people.
Netflix and Amazon has spent years and millions of dollars
building out their streaming infrastructure to support beaming
on-demand content across the internet (Marvin, 2019). These
companies have spent years and money figuring out how to
distribute video to an increasingly connected landscape of
various screens and devices. Being new in the business, Claro
Video need years of experience and research to catch up with

established competitors. If a new technology for streaming
emerge, Claro Video may not be able to deal with the disruption
and may end up losing a portion of its market share.
Amazon Prime
Strength
Amazon Prime is a business segment of online retailer giant
Amazon.com Inc. (Johnson, 2018). It has enormous resources
and it operates globally. Its business strategies were known to
be very effective. It derives its advantage from its IT
technology which is one of the best in the world. It has been in
the business for a long time and have spent millions of dollars
and time to develop a live streaming infrastructure capable of
mitigating the threat of technology innovation. It has also
enormous logistic networks and marketing resources capable of
reaching out to every people around the world. It has the
technology, the resources and the technical knowhow. It has the
manpower and staffs to operate the video streaming segment.
With its technology and enormous resources it is capable of
providing high quality video streaming service to customers.
Another strength of Amazon is its ability to innovate
technology. Thus, it has no problem mitigating the threat of
disruptive technology. When new technology in live streaming
emerged it is most likely that it came from Amazon or it has the
ability to modify it services accordingly. There is no treat of
technology disruption.
The Website of Amazon prime Mexico is Spanish and the
services it offered to its customers have Mexican subtitles,
hence there is little problem with the language barrier, Allowing
Amazon Prime Mitigate the Threat related to social factors.
Weakness
Amazon Prime is just a segment of the Amazon.com Inc. The
company is more focus on on-line retailing, thus may not exert
tremendous amount of effort just to topple the competitor. Its
single minded focus on online retailing may “come in the way”
of its video streaming expansion.
It is also a US based company and unlike Claro Video, is not

able to mitigate the threat of legal and political environment. It
is also offers the costliest service. This makes it a weakness if a
company that offer lower cost but the same quality arrives.
Amazon Prime will not be able to deal with the threat of
capable new entrants.
Netflix strength and weaknesses against competitors
Netflix is the first and the leader in the industry. It has a large
network of logistics and marketing capable of reaching out to
any person who use Facebook twitter and you tube (Poulos,
2019). It has a high level of brand recognition and brand
awareness and customers in Mexico will readily recognize the
company and its services when it is advertised in social media.
Being the leader and the first, it knows the do’s and don’ts in
the business plus unlike its competitors, in which live streaming
is just a business segment, Netflix core business and sole
business is live streaming. This allow it to focus on live
streaming related initiatives and will not have the problem
Claro Video or Amazon are experiencing (in which the single
minded focus on telecommunication and online retailer
respectively come in the way of video streaming expansions. It
has been building, innovating and developing its lives streaming
infrastructure capable of supporting beaming on-demand content
across the internet delivering its services to a variety to a
variety of screens and devices (Marvin, 2019). Netflix
technological capabilities in the live streaming business is
unmatched even Amazon, with all its technological advantage in
online business, cannot topple Netflix technological advantage.
Amazon is diverting its resources to on-line retailing, Netflix on
the other throw all is resources to video streaming, thus when it
comes to technological disruption, Netflix will no problem
because it is a precursor of it. Claro Video will not stand a
chance competing with Netflix technology knowhow. It is
Netflix competitive advantage. Netflix is a giant in live
streaming and world renowned for live streaming. Amazon is
globally recognized as on online retailer but is not at par with

Netflix in terms of video streaming. Claro Video on the other
hand is not known globally. Claro Video operates locally
hence, can mitigate the threat cause by political and legal
issues.
Netflix is based in the US and operates globally, it may not be
able to mitigate the political threat and the legal threat, the
same way as that of Claro Video, but it operates in the virtual
world with no geographical boundaries and jurisdiction. It does
not offer tangible products but video services accessible in the
internet. Hence, political turmoil and legal issues in Mexico
may not impact Netflix business strategy as people can always
access the net. The only way to adversely affect Netflix entry in
Mexico is to ban the internet.
The sociocultural impact which provide Claro video a
competitive advantage can be seen as a weakness of Netflix.
Netflix is an American company and may not know the culture
and preference of the Mexican people. But, Netflix has the
technology and knowledge to modify its videos and put Mexican
subtitles. Thereby reducing the impact of sociocultural barriers.
Netflix is price is lower than Amazon but a lot expensive
compare to Claro. The price is a weakness as when economic
slowdown occurs, people may choose Claro instead over
expensive American based video streaming companies. The
weakness of limited innovation is associated with Disney’s
business strategies. The company does innovate through
continuous product improvement. However, rapid innovation
involving advanced technologies is limited in the company’s
operations.
Porter Generic Strategy
Netflix ultra-high tech live streaming service and technical
knowhow are its competitive advantage. Using this competitive
advantage, Netflix may pursue differentiation strategy of the
Porters Generic Strategy. Differentiation strategy means
making one’s product or services different and more attractive
than competitors (David, 2011). Netflix ultramodern and high

tech live streaming infrastructure provide quality video services
unmatched by competitors. High quality video, sound graphics
and clear subtitle, capable of being played in every scree and
devices (smartphone, tables, and computers), make Netflix
different from competitors. It has been producing original
content over the years, while its competitors are on infancy
stage.
Recommended competitive Strategy
The company may focus on its differentiation strategy to reach
out to its market. It may emphasize these advantages when
advertising to its customers. Focus on differentiation, will be
effective as people will chose quality over price especially the
target customers are internet lovers and tech savvy. The focus
differentiation strategy should be combined with social media
marketing. This is another competitive advantage of Netflix is
its social media marketing. It is almost everywhere in the
internet, when one opens a viral video, the video will not yet
start until the Netflix commercial is done.
When Netflix advertise in social media and YouTube, it should
emphasize this competitive advantage to be able to reach out to
Mexican customers. Netflix may use integrated marketing
communication strategy (Bormane, 2018). In integrating
marketing communication all of its marketing strategy should
feature its competitive advantage and the marketing message
should be focus on the differentiation (quality and ultrahigh
tech services). When it advertises in YouTube, Twitter,
Facebook and TV, it must always mention its competitive
advantage. Some of the advantages are Technological
innovation, Growth in various industries and Growth of
developing markets.
Conclusion
Netflix and Walt Disney will thrive in Mexico and will
dominate the live streaming business here. It has the
competitive advantage that cannot be matched by competitors.
Making the necessary changes to language barriers to better

accommodate the buyers. It is targeting customers whose needs
and profile (tech savvy and internet users) exact fits that of
Netflix. Netflix and Walt Disney should focus on its
differentiation strategy to successfully enter the country to
continue to be a super power company that will control all of
streamlines in Mexico.
Summary
This paper is about Netflix entry to country of Mexico and
pairing up with Walt Disney Company. The purpose is to find
the best strategy entering the country. This is done by analyzing
the strength and weaknesses of its competitors. The local
competitors is Claro Video which has the advantage of low
price, legal and political know how, and cultural advantage. It is
speaks the same language. Yet, it is new in the business and
does not have the technology to match that of Netflix. The
second competitor is Amazon prime. It has enormous resources
and has the technology that Claro Video does not have, but it is
still inferior to Netflix despite of its global status because it is
more focus on on-line retailing which hinders any video
streaming expansion initiatives. Netflix is superior to its
competitors’ because it is the leader in the industry and has the
competitive advantage that competitors cannot match. It has a
well-established live streaming infrastructure.

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video-streaming-market
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Disney's Generic Competitive Strategy & Intensive Growth
Strategies
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growth-strategies
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Name of Assignment Here
Student Name Here
Name of Assignment Here
In a paragraph identify the article chosen and the test for that
article. Be clear on your thesis (what can we expect to read
about in this paper?).
Why did the authors select the Test (Name the Test)
Give 1-2 paragraphs explaining what test was used and why the
authors used it. The authors tend to explain much of this
information in the methodology section.
Appropriatness of the Test and Explanation
The appropriateness of a test needs to describe what EACH of
the variables were. State if they were independent or dependent
and how they were measured (cateogorical or continuous). It
needs to shown that the variables FIT the test that was used
here.
How Results were Displayed
You can combine questions 3 and 4 here. Make sure to address
‘how’ the results were displayed, were they in a figure or table

(explain which ones), do the results stand alone or with
explanations, AND were you able to interpret the study from it
and why.
Conclusion
Give a full paragraph to summarize the paper and re-state your
thesis here.
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Running Head: COMPETITOR ANALYSIS AND
COMPETITIVE STRATEGY 1
COMPETITOR ANALYSIS AND COMPETITIVE STRATEGY
15
COMPETITOR ANALYSIS AND COMPETITIVE STRATEGY
Executive Summary
Walt Disney is an entertainment company that is established in
the world under four segments of student entertainment, Parks
Experiences, Media Networks, and Broadcasting. His aspects of
the company place it at a significant company with other
established companies in the entertainment industry in the
world, such as Philo TV, Sling TV, and Amazon Prime TV. The
media segment of Disney is more appropriate to enter a new
country such as Turkey since the country is at rapid
development, meaning it has higher opportunities for the growth
of such an industry.
Competitors such as Amazon enjoy strategies such as reduced
operational costs which result from online selling platform and
third party selling approach. Besides, all three segments of the
company complement each other. Adoption of models such as
free delivery and improper launching of some products have
resulted in the loss of revenues for the company. Other
companies such as Sling TV and Philo have tried to implement a
cost reduction by offering a wide range of channels. Sling TV is

limited by lack of operations outside the US borders while Philo
does not offer local and sports channels.
Amazon poses the highest threat to Disney both at the local and
the international level. However, Disney has established an
excellent supplier relation in addition to the good brand
reputation. Compared to its competitors, Disney is at high risk
of vulnerabilities since it lacks a comprehensive advertisement
mechanism unless it is placing a new movie in the market.
Disney has adopted a diversified business meant to mitigate the
risk that might arise, affecting a particular segment.
Competitive advantage is also based on its competency in the
acquisition. Disney has also employed a localized business
model to meet the tastes and preferences of the customers at the
local level.
Among the recommendations that Disney can consider given the
level of competition in the entertainment industry is the
diversification of its products. Moreover, it can consider a
customer-centered approach when designing its services. Disney
needs to employ rivalry detections systems so that it can
prepare in advance in case of an upcoming competition.
Table of Contents
Executive Summary 2
Introduction 5
Mexico Entertainment Market 6
Competitors' Strengths and Weaknesses Assessment 7
Amazon Prime Strengths and Weaknesses 7
Sling TV Strengths and Weaknesses 7
Philo TV 8
Comparison between Clients Strengths and Weaknesses to those
of Competitors 9
Comparison between Strengths9
Comparison of Weaknesses 10
Disney Competitive Advantage 10
How these Represents Differentiation or Cost Advantage 11

Competitive Strategy Recommendation 12
References 14
Introduction
Walt Disney is a company that operates worldwide in the
entertainment industry. Walt Disney operates in four different
segments of Studio Entertainment, Parks Experiences and
Products, and Media Networks. The Media Network Segment
has a cable and broadcasting television, television production
and distribution operations, domestic television station and a
radio network and station. These aspects put Disney at the
competition with other media companies such as Amazon Prime
TV, Sling TV, and Philo. This paper will evaluate the state of
competition posed by these companies through evaluation of the
competitiveness of each in comparison to Disney.
Media Network segment is more appropriate to enter the
Turkish market. This is a great opportunity, given the fact that
the country has a democratic system of government that makes
it easy to grab the upcoming opportunities. Moreover, the
country is growing rapidly, meaning an opportunity for
investments, which is quite advantageous given the fact that the
country has lower labor costs, which will imply lower operation
costs and thus high returns. Moreover, Turkey has invested
vastly in the information technology making one of the best
opportunities Disney Company can extend its services at lower
costs since it does not have to spend heavily and can use the
locally available infrastructure.
These characteristics in the Turkish market make it more
advantageous to invest in as compared to investing in the Indian
Market, which is characterized by higher pollution due to the
unregulated production activities. As a result, the costs for
mitigating production related pollution are significantly lower
in Turkey as compared to India. Therefore, availability of an
undeveloped economy and a growing population of the young
combined with a hard-working community will create high

chances of the economic growth, which will mean prosperity for
the investment opportunities in the country. Turkey creates a
better investment opportunity for Disney to extend its Media
Network than India. Mexico Entertainment Market
Mexico being the second largest industry in Latin American
provides an alternative expansion opportunity for Disney
Company. It has also the largest media and entertainment
market with a spending of $24.1 in the year 2013 (PwC, 2018).
The fact that Mexico is among the fastest expanding economies
in the Latin America, it provides an opportunity for investment
in the entertainment because its expanding middle will increase
the demand for the entertainment products as their incomes
grow. According PWC Global the entertainment market is
projected to grow at an over whelming rate of 7.3 percent
annually with a corresponding increase in global demand of 5
percent, indicating the potential Mexican market entertainment
market for investment. This puts Disney at a prospective edge to
invest in this market given this growth.
On the other hand, Mexico has an established online selling of
entertainment products. However, Disney has not very embraced
this business model meaning that it can start a new model as it
try to invest in the new market. However, it has to be prepared
to beat competition already existing in the Mexican market.
Given the fact that entertainment market in Mexico is well
established, it means that any external company willing to
invest in this market must be prepared to face the stiff
competition in the country. There are other giants such as
Amazon which are already well established in this market.
Disney should study the prevailing competition patterns before
it can invest in this market.
Competitors' Strengths and Weaknesses AssessmentAmazon
Prime Strengths and Weaknesses
Amazon has employed a strong cost management strategy
characterized by a low-cost structure which is achieved mainly
through using an online selling platform. This enables the
company to avoid huge operational costs associated with

running physical retailing outlets, which results in increased
sales without a corresponding increase in marginal costs. Time
for fulfilling a transaction and reduced shipping costs means
that the company can sell their merchandise at low prices to
their customers (Jurevicius, 2019). Besides, Amazon involves
third-party sellers on their sites, which create competition by
availing products through Amazon's retail division. This creates
high traffic in the Amazons sites creating even higher sales.
Moreover, the three segments in Amazon complement each
other meaning that no segment is left out in terms of
performance. Amazon has established itself in the different
international market, which means that it can operate in a global
market with varying policies of marketing.
On the other hand, one of the weaknesses the company is
exposed is the use of a business model that can easily be
imitated. Some strategies the company had adopted as
competitors such as free delivery are contributing to lost
margins in markets such as India. Some products have not been
well launched in the market. There are claims such as tax
avoidance which are creating negative publicity about the
company products. Further, the fact that Amazon operates very
few physical retails is a factor that may contribute to hindering
customer attraction. Sling TV Strengths and Weaknesses
Sling makes it easy to watch a wide range of channels are at
relatively lower coasts anywhere you may be located if you
have subscribed. These include live channels wherever you are
located. Moreover, they offer free trials for their clients,
enabling them to have experience with their products before
they subscribe. Another strength is the fact that you can
disconnect from the service without the need to worry about the
disconnect fee as it is with other TV channels.
One of the weaknesses that have resulted in de-popularizing is
the fact that the channels are predetermined when making
payments which means that you cannot choose the package you
want as a customer but what has been given at the time of
subscription. Additionally, these channels are not available

outside the United States and make it difficult for the company
to compete with other well-established channels such as
Amazon Prime which operate on a global platform. As a result,
Sling cannot be able to establish itself in another country such
as Turkey without incurring a considerate amount of costs.
Moreover, it might be challenging to adopt the political
environment of such a country, given that it has not established
an international marketing platform. The company is also faced
with the issue of buffering, which has resulted in a significant
number of clients ditching their channels. Philo TV
Philo TV offers online TV channels and offers explicitly
streaming TV channels. It provides many channels at a low
price ratio because it has specialized in providing entertainment
channels. It provides high-quality HD with minimal buffering
and freezing as can be found in other streaming channels such
as the Sling TV. It has a smooth user interface that can be found
in the market. The features of its service are excellent, given
the fact that they also offer them at low prices (Cook, 2019).
However, it has not integrated local channels which can
contribute to clients ditch their services. Philo also lacks sports
channels which could have attracted a substantial number of
clients. The greatest challenge is the fact that Philo channels
can only be accessed through a limited number of apps, making
it challenging to capture a large number of clients. Philo is also
faced with the software rigidity meaning that it has to adopt
different technology that will ensure customers in a new country
such as turkey can use their products without being constriction
by technological rigidities.Comparison between Clients
Strengths and Weaknesses to those of CompetitorsComparison
between Strengths
Creating strong ties with the suppliers is a critical element for a
company to build its competitive advantage. All the companies
rely heavily on their suppliers since they are the determiners of
the quality guaranteed for their clients. Reliability has been
driving force behind the recent improvements in the quality of
supply content.

Philo and Sling market seems not to be very competitive in the
market; however, Amazon generates quite large cash flows
compared to Disney which is not only used to diversify its
investments locally but also internationally in the upcoming
markets such as Turkey. This means that companies such as
Disney also have to extend their strong negotiation skills in the
new markets such as Turkey in their pursuit of reaching their
distribution in such countries to leverage completion posed by
companies such as Amazon which are already established
globally.
All the companies aim at improving the quality of giving the
best to their clients, and this has resulted in the recruitment of
the most skillful and experienced team. Disney also has the
advantage of High Brand Profile which is easily used for
marketing its products in the market using their symbol D. All
the companies have their strengths though depending on their
market coverage, which forms competitive edge while
marketing their brands. Comparison of Weaknesses
Disney Company has employ complex training programs for its
employees, which results in high attrition rates but is still yet to
improve despite this spending. This puts it at a disadvantaged
position when compared to companies like Amazon, which scale
on expenditure without compromising on quality. However,
Disney is better placed compared to companies such as Sling
and Philo since its scale of operation is still limited and less
diversified.
Disney is also at high risk of vulnerability by competitors.
Disney does not have marketing and promotion tools unless they
are introducing a new movie. Moreover, they do not use ads
since most of their adverts are mainly done visually, which
means they are likely not to reach their sales growth target.
Moreover, the company does not take advantage of coiling up
campaigns because their designers have poor judgment on the
next big idea, which results in insufficient product demand
scaling. Disney Competitive Advantage
Disney is among the leading international media companies that

are performing well in the entertainment industry. Disney is
endowed with various skills that help the company create a
competitive advantage over its rivals companies. One of the
factors that are contributing towards a competitive edge is the
fact that the company operates in five different business
segments which are operational in different economies
(Güçdemir & Selim, 2015). Besides, the company is employing
different business models in these economies, leading to
generate income. The diversified business model is critical
since it enables the company to withstand any changes in the
external environment.
Another critical source of competitive advantage is its
competency in the acquisition. Disney has engaged in quite
successful acquisitions like the Pixar Animation Studios in
2006, Marvel Entertainment in 2009 and Lukas Film in the year
2012. These acquisitions have indicated that Disney is quite
capable of making wise choices of their acquisition, which have
resulted in significant revenue and earnings growth.
Media and entertainment industry is becoming quite
competitive, requiring the players to adopt new strategies that
will improve their competitive advantage. For instance, the
Asian sector is growing rapidly, and this means that this
industry is becoming more and more competitive each day.
However, Disney has started to adapt to this threat by designing
products that suits the local tastes and preferences, a strategy
that other competitors seem not to have realized. Disney has,
therefore adapted its product portfolio to the local demands.
These factors have played a critical in the building of the brand
reputation for Disney products, which is quite essential to build
a competitive advantage. Brand reputation is very crucial since
it enables the company to withstand tension created by the
competitors. The fact that Disney's brand has been known for
more than ninety years makes customers request exclusively
Disney branded and not any other product, especially in the
Asian Countries such as Turkey. This brand reputation is quite
essential for the entire product portfolio of Disney to compete

favorably in the market. How these Represents Differentiation
or Cost Advantage
Operating in different market segments enables the company to
withstand any waves that might be created by the competitors
since it is hard to be hit from all the sectors at once. This has
enabled the company to remain in constant revenue flow, even
when some segments are performing poorly. Unlike other
competitors that have not adopted such a business model,
Disney is, therefore, able to compete favorably and remain in
business even when other competitors operating in a single
segment are performing poorly. This diversification is enhanced
by the high capital investment employed by the company that
ensures quality products that attracts customer appeal. Another
critical tactic that has created a competitive edge is its
acquisition strategy that provided high-quality products through
specialization done through the acquired companies. Besides,
this specialization enables the company to produce at relatively
lower costs meaning that the company will sell its products at
lower prices.
The company has also strategized on modification of products
so that they can fit the local tastes and preferences, making it
possible to beat the competition by companies which offer
similar products. This is important to the company brand given
that the competitors have not realized such strategies making
the company remain ahead of competitors. Competitive Strategy
Recommendation
Disney has a reliable employee base meaning that the company
might run into a crisis, especially when these suppliers fail to
meet their targets. The company is, therefore supposed to
employ a diversified supplier base so that in case of such a
crisis, they can continue with their operations optimally.
Disney has also employed strategies that might be very risky to
the firm and can be mitigated by using alternative procedures.
For instance, among the most strategic mitigation that Disney
has employed is acquiring competitive firms. Besides, the firm
is highly diversified into different units, which are not

profitable. Given the fact that the company is mainly dependent
on income from the entertainment industry and is used to feed
the less profitable departments, and also, it might be difficult
for some competitors to accept their offer when they approach
them for an acquisition (Esser, 2016). Disney can use ads based
techniques inside their movie, which can reach many potential
clients across the globe, instead of depending on buyouts.
Besides, Disney can focus on diversifying its products rather
than employing the strategies that are used by the acquired
firms. This will help minimize costs involved in the acquisition
and at the same time evade the risk of substitution since the
customers cannot obtain a similar product from any of the
existing competitors. By so doing it will enhance the
profitability of the firm and improve its competitive position of
the firm by attracting new customers. Competitors like Amazon
have employed a diversified technique, yet all the segment of
the company complement each in such a manner that they are
unlikely to be beaten by the competition. As a result, such
companies have continued to command a large proportion of the
entertainment industry. Consumers are known to be attracted to
products that stand out as unique in the market, and this is also
true in the entertainment industry. Lewin et al. (2015) found
product loyalty is gained through consistency and uniqueness
throughout the market. This might also apply in the
entertainment industry and result in remarkable loyalty from the
consumers and therefore, create a competitive advantage for the
company. However, this might not be applicable for a
competitive advantage over all the clients since some of the
competitors such Philo have already employed a similar strategy
in their product portfolio.
Also, Disney has adopted a customer based approached by
tailoring their products to meet tastes and preferences at the
local level. Since this is can easily be imitated by other
entertainment companies, it is essential to use a customer when
designing their products (Lyon & Koerner, 2016). This can be
done by evaluating the possibilities of the buyers to switch to

other similar products offered by the competitors. Also, the
evaluation of the customer capabilities will be critical since this
will dictate the terms that the supplier is to adopt. The
customers can then prescribe the conditions which the company
to apply while selling their products. Therefore, the company
can make a customer-centered approach when making sales to
their clients. This has the possibility of attracting more clients
since the clients are convinced that their demand and
specifications have been met. This can be achieved by listening
to their requirements primarily through the online platforms and
email conversations where the products cannot be delivered
physically.
The issue of rivalry means that competition is bound to be
there, and the rivals are offering different versions of a similar
product. Disney operates in the entertainment industry, which is
full of rivalry, and the company can withstand such rivalry by
employing early detection systems. This enables the company to
prepare and outdo such competition before it turns out to be a
significant threat. Despite the high level of competition that
Disney is exposed to in the entertainment industry, it has
maintained a good brand reputation in the entertainment
industry that has enabled the firm to redirect the competition
before it turns out to be a threat. The excellent reputation has
enabled Disney to sell any movie it puts on the theatre.
References
Cook, S. (2019, June 06). Philo Review 2019 – The Low-Cost
Leader in Streaming TV. Retrieved from Flix:
https://flixed.io/philo-review/
Esser, A. (2016). Challenging US Leadership in Entertainment
Television? The Rise and Sale of Europe's International TV
Production Groups. International Journal of Communication
(19328036), 10.
Goodman, J. K., Cryder, C. E., & Cheema, A. (2013). Data
Collection in a Flat World: The Strengths and Weaknesses of
Mechanical Turk Samples. Journal of Behavioral Decision
Making, 26(3), 213-224. Retrieved from:

http://onlinelibrary.wiley.com/doi/10.1002/bdm.1753/full
Güçdemir, H., & Selim, H. (2015). Integrating Multi-Criteria
Decision Making and Clustering for Business Customer
Segmentation. Industrial Management & Data Systems, 115(6),
1022-1040. Retrieved from:
http://www.emeraldinsight.com/doi/abs/10.1108/IMDS-01-
2015-0027
Jurevicius, O. (2019, January 10). SWOT analysis of Amazon (5
Key Strengths in 2019). Retrieved from Strategic Management
Insight: https://www.strategicmanagementinsight.com/swot-
analyses/amazon-swot-analysis.html
Lewin, J., Rajamma, R. K., & Paswan, A. K. (2015). Customer
loyalty in entertainment venues: The reality TV genre. Journal
of Business Research, 68(3), 616-622.]
Lyon, A. R., & Koerner, K. (2016). User‐centered design for
psychosocial intervention development and implementation.
Clinical Psychology: Science and Practice, 23(2), 180-200.
https://www.pwc.com/gx/en/global-entertainment-media-
outlook/segment-insights/assets/mexico-summary.pdf
Executive Summary
This paper focuses on top 3 competitors- Netflix, Amazon, and
Blim and looks at their competitive advantages and weaknesses.
Followed by this, we will look at Disney’s unique competitive
advantages in Mexico. After this discussion, we will look at
recommended strategies that Disney may be currently deploying
or should be deploying to compete in Mexico. When we look at
the current market demand of Mexico, Netflix leads the pack,
followed by Amazon, HULU and Blim. Netflix has a market
demand on 74%, Amazon has 9%, HULU is at 7%, followed by
Blim. Furthermore, Netflix is also global leader in the SVOD
movement. Netflix has a unique mix of non-original content and
original content, which has helped gain them international
demand for their services. Amazon, also has a large selection of
material targeted towards certain populations, not to mention
third party subscription services with showtime, HBO, CBS and

other channels. HULU also offers similar services to Amazon in
this sense. Televisa’s Blim, a local competitor, started out
offering their shows on Netflix. Eventually Televisa split off
and started their own streaming services. However, recently
Blim has made a deal with Amazon to provide their shows on
Amazon, signaling their possible demise in Mexico.
Disney has a few competitive advantages, starting with a
large library of non-original and original content. Adding to
this, Disney is world-wide recognized with world-wide appeal
and demand for their material. Given Disney’s traditional
business model, starting a SVOD service allows Disney to cut
some costs from their cost operations. Adding to this, they have
a unique ability to offer multiple kinds of packages regarding
theme parks, cruises, ESPN, HULU, and Disney+ services to
varying customer demands.
Competitor Analysis and Competitive Strategy
Table of Contents
1. Introduction
2. Assessing Competitors Strengths and Weaknesses
2.1. Netflix
2.2. Amazon
2.3. Televisa’s Blim

3. Disney’s Competitive Advantages
4. Recommended Competitive Strategies
5. Conclusion
6. References
1. Introduction
For this business plan, our group will recommend that Disney
should expand its’ streaming services to Mexico. Disney was
founded in 1923 and is now one of the world’s largest
entertainment and media companies in the world. It owns theme
parks, cruise lines, feature films, and television shows. Since
1923, Disney has only grown larger by acquiring companies like
ESPN, ABC, Marvel Studios, Pixar, Lucas Films, National
Geographic and owning a majority share in HULU (Ho, 2019).
Disney will hope to couple their new Disney+ streaming service
with HULU and expand them to Mexico.
There are a lot of facts to support Disney+ expansion to
Mexico. As far back as 2013, under 40% of the population had
internet access. It is projected by 2019, 68% of the country is
expected have internet access (Statista Internet Usage, 2019).
Furthermore, the SVOD segment in Mexico is predicted to grow
to USD $268 million (Statista Video Usage, 2019). A factor that
led directly to these outcomes was when Mexico spent USD
$300 billion to improve country infrastructure (Diaz, 2013).
Keeping these factors in mind, our group believes expanding
into Mexico is our client’s best option.

First, this paper will assess strengths and weaknesses of three
competitors. Second, we will identify Disney’s competitive
advantages. Lastly, we will recommend a competitive strategy
for how Disney should proceed into the Mexican maket.
2. Assessing competitors Strengths and Weaknesses
In this section, we will discuss three competitors, two of them
international and one local. This paper will analyze strong and
weak points for competitors that have already entered the
Mexican marketplace. We will look at two international SVOD
services- Netflix and Amazon. Lastly, for this section we will
look at a local SVOD service- Televisia’s Blim.
2.1. Netflix
Netflix has been a strong company within the United States and
internationally. Due to a majority of its’ customers being
international, it is clear why they are so popular. Currently
Netflix is operating in over 190 countries (Brennan, 2018). This
is currently no different in Mexico. According to Parrot
Analytics (2019), demand for Netflix is 74% of the SVOD
services in Mexico. Based on this high demand for Netflix, it
has been difficult and will continue to be difficult for other
companies such Amazon and HBO to increase their demand
size. High demand for Netflix is attributed to their high
selection of both original and non-original content- action and
drama titles. Demand for action genre videos is 77% followed
by drama which is 67% (Parrot Analytics, 2019).
There is no doubt, Netflix adapted as they expanded. They did
not expand all at once, it took them 7 years to do so (Brennan,
2018). Netflix started with adjacent markets and continued to
expand to other similar markets as they solidified market shares
in those originating countries. Another key strength Netflix
acquired over time was adapting their service’s content to
different countries (Brennan, 2018). As they expanded to
international countries with foreign language, they added
adequate subtitles services and even created local regional
content language films and tv series. A good example of this, is
Netflix’s show Sacred Games filmed in India and spoke in

Hindi. Furthermore, as demand for original content continues to
grow, so will Netflix’s overall demand.
Netflix’s current primary weakness are other competitors. As
popularity of SVOD rise, so will the popularity of other
international services like Amazon, HULU, and HBO. Adding
to this local SVOD services that are popping up all over the
world. A good example of this is happening in India right, with
over 35 local SVOD services in operation there (Singh, 2019).
International SVOD services combined with local SVOD
overtime will chip away at Netflix demand and overall profit
margins.
Given Netflix’s vast expansion, they decided to raise rates,
which were not popular with customers. So given Netflix’s
dominance in the international market, it will be easier for
international and local SVOD services to undercut those prices.
Currently Netflix still runs their DVD service on top of their
streaming services. Netflix expects their DVD rentals and sales
to eventually decrease to USD $0; but can be considered an
unnecessary cost (Nemcick-Cruz, 2013). Another weakness this
section will discuss is Netflix’s over-spending and outbidding
to acquire original content or content for other networks
(Nemcick-Cruz, 2013). This practice has consistently kept
Netflix in the red for several years despite rises in
subscribership and revenues. The problem with over-spending
on these items is that many of them will only be “one hit
wonders”, meaning one day they are popular, but the next day,
not so much. It is also important to note two points for Netflix’s
weaknesses-1. After Disney pulls their content off Netflix,
showcases them on Disney+, Netflix viewership will drop
moderately; 2. HULU currently has 7% market demand in
Mexico (Parrot Analytics, 2019), and when combined with
Disney+ content, could make competitive alternative to Netflix.
2.2. Amazon
Amazon has been around much longer than Netflix, however,
their SVOD services are much more recent. Amazon was
founded in 1994, starting out in internet retail. Overtime,

Amazon continued to grow and expand. Amazon Prime SVOD
service is unique because is coupled with other perks such as 2-
day shipping, free streaming of movies, tv shows and music,
extra cloud storage space, and access to Kindle reading.
Currently, Amazon Prime SVOD services share 22% of the
market (second place), where Netflix comes in at 43% in the
United States (Uenlue, 2019). Despite lagging behind, Amazon
Prime has a few competitive advantages.
Unlike Netflix, Amazon Prime uses their own content delivery
infrastructure (CDN) all over the world (Uenlue, 2019). CDNs
allow Amazon to be able to stream content at powerful speeds
to customers. Instead of relying on partnerships to spread their
content, Amazon built their own. This allows Amazon to have
more control over how they operate their CDNs and servers.
Amazon’s content library is also extensive, having over 20,000
items subscribers can watch for free, buy, rent, and purchase
through other connected channels like CBS or HBO (Uenlue,
2019). Amazon also has access to both original and non-original
content like HULU, giving them a competitive advantage in
overall content being offered.
Followed by Netflix, Amazon seems to have the biggest market
demand of 9% in Mexico (Parrot Analytics, 2019). Compared
to Netflix’s 74% market demand, that is a huge margin.
Disney+/HULU will have to be innovative, if they want to
overtake Amazon Prime Video and Netflix. There are a few
reasons why Amazon Prime Video lags behind Netflix. In most
countries, in order to get Amazon Prime Video, you must be an
Amazon Prime member, which include- 2-day shipping, free
streaming of music and tv shows, Kindle, Audible and other
perks. This is why Amazon charges extra money per year from
customers. This leads to another branding problem, that some
customers do not know the difference between Amazon Prime
Video and Amazon Prime (Shanbhag, 2018). Cost coupled with
customer confusion on Amazon Prime Video vs. Amazon Prime
is cause for concern. If Amazon wants to truly compete against
Netflix in the United States and Mexico, it needs to consider

offering Amazon Prime SVOD service separately from their
main business of internet retail.
2.3. Televisia’s Blim
Televisa is a media cable giant in Latin America. Televisa’s
Blim was launched in 2016 in order to compete with Netflix
when they expanded to Mexico. Blim witnessed how Netflix
drew people to their platform and convinced many of them to
“cut the cord” (Spideo, n.d.). According to Spideo (n.d.),
Televisa operates in all of Latin America. When they saw
Netflix profitability, Televisa withdrew all content they had on
Netflix, and started Blim SVOD, in order to draw
subscribership. Unfortunately, not as many locals started
subscribing to Blim (Villafañe, 2018). Despite Blim having a
plethora of material catering to the local market, there was still
a higher demand for Netflix. According to Villafañe, (2018),
Blim has struck a deal with Amazon Prime Video to have all of
their content played on Amazon. Many believe this is a
signaling of Blim coming to an end. It seems that Blim is not
able to compete with Netflix in the Mexican market.
3. Disney’s Competitive Advantages
Disney+/HULU have a few competitive advantages. Disney has
spent the last decade acquiring other media companies and
content. As Ho (2019), points out they have acquired companies
like ESPN, ABS, Marvel Studios, Pixar, Lucas Films, National
Geographic, 21st Century Fox and a majority of HULU. This is
Disney’s primary advantage, because Mexico has already shown
a strong demand for Netflix; with the content listed above
coupled with HULU, Disney+/HULU could become a major
competitor in the Mexican market.
Due to the demand of Disney produced material, people will
follow wherever it ends up. Adding to this, Disney will be able
to eliminate a lot of costs associated with running a traditional
non-online business (Ball, 2019). Instead of selling DVDs,
releasing movies in traditional theaters, and making materials
available on varying platforms like Netflix (currently); they can
put all their content on their Disney+ SVOD. This eliminates

costs associated with producing Disney original content like
packaging and shipping (Ball , 2019). Netflix is currently going
through a similar transition with their DVD services vs. SVOD
service.
Given Disney+ wide arrangement of friendly tv shows and
movies for kids, many households would greatly considering
adding Disney+ to their array of SVOD services. According to
World Population Review (2019) there are approximately
31,977,542 children between the ages of 0-14 years old. With
kid friendly content at a cheaper price than Netflix, many
families would consider either switching over to Disney+ or
adding Disney+ as a supplement to Netflix.
Unlike other SVOD providers, Disney has the ability to bundle
various packages using their parks and recreation/cruises,
ESPN/HULU/Disney+ content (Ball, 2019). More specifically,
they can offer different types of packages that cater to certain
audience groups. For those who love sports and movies, they
could pick a bundle that includes ESPN, Netflix, and/or HULU
depending on their preference. Furthermore, given these
options, it would give Disney a competitive advantage by
allowing them attract varying customers to create a solid
customer base.
4. Recommend Competitive Strategy
In this section we will discuss various competitive strategies
that Disney should use in regards to their upcoming streaming
services. First we will start with corporate level strategies and
corporate grand strategies. Second, we will look at business
level strategies. Lastly, we will look at Porter’s generic
strategies and functional level strategies. The unique part of this
section, is that Disney’s SVOD service is not in operation
currently, and has yet to expand this service to other countries;
meaning this is the conversation that has already taken place or
currently taking place within Disney right now.
Corporate level strategies look at the “big picture” of how their
organization operates and what sectors they operate in (Strategy
Levels, 2009). Essentially companies need to have a broader

strategy in order to succeed, otherwise there would be no
direction. At this level, this is where all decisions related to
staffing, equipment and other resources are decided (Strategy
Levels, 2009). This is also where diversification is discussed
(Strategy Level, 2009). Disney, at the corporate level decided,
that they had enough original content, resources and staffing to
enter the SVOD market to compete with companies like Netflix
and Amazon. Disney is currently in the business of making
movies, tv shows, cruise lines, and parks and recreation to
spread their brand. Disney’s decision to enter the SVOD market
was made at the corporate level in order to compete with SVOD
competitors like Netflix, Amazon, and HBO. It can also be
argued that Disney foresaw this when they acquired a majority
of shares in HULU. The next logical step for Disney was to
create their own SVOD services.
The primary corporate grand strategies that Disney is currently
undertaking is a growth strategy using diversification into the
SVOD market (Strategy Levels, 2009). As mentioned earlier,
Disney has been in several different markets, and now is trying
to reach even more customers from the comforts of their own
home. This is often called conglomerate diversification
(Strategy Levels, 2009).
Business level strategies focus on the overall performance
(Strategic Levels, 2009). This takes place at the business level,
where business level managers have to report numbers
accurately to corporate levels, in order for corporate to made
accurate decisions (Strategic Levels, 2009). In single-product
corporations, both corporate and business level strategies
overlap making their strategies united (Strategy Levels, 2019).
However, multi-product corporations like Disney operate using
strategic business units (SBUs). SBUs are multiple, varying
business units within a single corporation to promote a
particular service or objective (Strategic Levels, 2009).
Essentially these multiple business units are in charge of
keeping track of their profitability and reporting them
accurately to corporate level. Since Disney is a multi-faceted

company, they have experience in creating and operating SBUs
to carry out their multiple services and operations.
Porter’s generic strategies include cost leadership,
differentiation, and focuses on market niches (Strategic Levels,
2009). Cost leadership strategies aim to reduce cost operations
and distributions and producing of products and services.
Ultimately, if a company does this effectively, they will be able
to offer lower prices within their market. Disney applies this
currently by offering deals and packages for their theme parks
and cruise lines. Furthermore, they will be implementing further
cost leadership by starting their own Disney+ SVOD services.
As Ball (2019) points out, Disney+/HULU SVOD services will
help Disney cut costs in production of DVDs packaging and
shipping costs, and other resources.
Differentiation is simply uniqueness of the service or product
you are offering (Strategy Levels, 2009). What is Disney
offering that is unique when it comes to Disney+/HULU? Part
of Disney’s uniqueness lies in their already current original
content and material, which is recognized the world over,
particularly among kids. Also as mentioned earlier, Disney
acquired Marvel Studios, Lucas Films, ESPN, National
Geographic, 21st Century Fox, Pixar Studios, just to name a few
(Ho, 2019). Given the extent of current Disney material and
plus added acquired material, this puts Disney+ SVOD services
as a unique differentiation compared to others in the market.
With a steady stream of materials and content, Disney could end
up being a competitive business to organizations like Netflix
and Amazon.
The third of generic Porter’s strategies is focusing on a market
niche (Strategy Levels, 2009). In some sense, Disney is
practicing some aspects of this. Disney’s current niche is their
original Disney content; however, with their majority
acquisition of HULU, and other media and entertainment
companies listed above, Disney also seems to be focusing on
multiple niches and target customers, from kids, to fans of
Marvel Studios, Star Wars, X-Men etc. In this sense, Disney

seems to be doing the opposite of focusing on any one particular
niche.
Since this is a new market for Disney, it is important that they
align their functional level strategies with their business and
corporate level strategies. Functional level strategies deal with
research, marketing, human resources, finance, production and
development (Strategy Levels, 2009). Since entering this new
market, Disney needs to re-structure their functional level
strategies to support SVOD service by focusing on research,
development, marketing, and production. Disney needs to focus
on using specialists in the field of SVOD services, advertising,
promotions, engineers and market research to further
Disney+/HULU (Strategy Levels, 2009). These areas will be
important to support appropriately in order to make
Disney+/HULU a success within the United States and Mexico.
5. Conclusion
Disney’s expansion to Mexico will be easier for Disney, due to
the lack of amount of competitors there. At the same time,
Mexico will be a challenging market to enter because Netflix
has a majority of market demand there. In short, Netflix will be
their primary challenger. Market demand for Netflix in Mexico
is 74%. The next highest competition is Amazon and Blim.
Amazon is at 9 % market demand followed by HULU and Blim.
Each of these competitors have their own unique competitive
strengths and weaknesses. Competitive advantages for Disney
include amount of original and non-original content Disney
owns and possesses, the high market demand for their content
with kids, teenagers and young adults, reducing some operations
costs of getting movies to theaters and producing individual unit
DVDs to for ordering and shipping and their ability to bundle a
plethora of options to suit varying demands of customers.
Current strategies include diversification, differentiation, cost
leadership, utilization of SBUs, and functional level strategies.
Ultimately, Disney will have a challenge going up against
Netflix, however given their appeal of original and non-original
content, Disney could start gaining back some market demand

and eventual market share.
6. References
Ball, M. (2019, March 17). REDEF ORIGINAL: Nine Reasons
Why Disney Will Succeed (And Why Four Criticisms are
Overhyped). Retrieved June 20, 2019, from
https://redef.com/original/nine-reasons-why-disney-will-
succeed-and-why-four-criticisms-are-overhyped
Brennan, L. (2018, October 12). How Netflix Expanded to 190
Countries in 7 Years. Retrieved June 18, 2019, from
https://hbr.org/2018/10/how-netflix-expanded-to-190-countries-
in-7-years
Diaz, L. (2013 July 15). Mexico sees $300 billion in
infrastructure spending through 2018. Retrieved from
https://www.reuters.com/article/us-mexico-
infrastructure/mexico-sees-300-billion-in-infrastructure-
spending-through-2018-idUSBRE96E0SA20130715
Ho, P. (2019, April 23). The Scarily High Number Of
Companies Disney Owns, Visualized. Retrieved June 18, 2019,
from http://digg.com/2019/disney-owned-companies-data-viz

Nemcick-Cruz, M. (2013, December 17). What Are Netflix's
Strengths and Weaknesses? Retrieved June 18, 2019, from
https://www.fool.com/investing/general/2013/12/17/what-are-
netflixs-strengths-and-weaknesses.aspx
Parrot Analytics. (2019.). The Global Television Demand
ReportGlobal SVOD platform demand share, digital original
series popularity and genre demand share trends in 2018 (pp. 1-
68, Rep.). Parrot Analytics.
Shanbhag, A. (2018, February 11). How can Amazon Video
truly beat Netflix. Retrieved June 20, 2019, from
https://www.linkedin.com/pulse/how-can-amazon-video-truly-
beat-netflix-avin-shanbhag
Singh, M. (2018, December 04). Netflix and Amazon are
struggling to win over the world's second-largest internet
market. Retrieved June 14, 2019, from
https://www.cnbc.com/2018/07/05/netflix-and-amazon-are-
struggling-to-win-over-indian-viewers.html
Spideo. (n.d.). Televisa: Blim Mobile. Retrieved June 20, 2019,
from https://spideo.tv/en/televisa-mobile/
Statista. (2019). Internet usage in Mexico – Statistics & Facts.
Retrieved from https://www.statista.com/topics/3477/internet-
usage-in-mexico/
Statista. (2019). Video-on-Demand: Mexico. Retrieved from
https://www.statista.com/outlook/201/117/video-on-
demand/mexico
Strategy Levels. (2009). In Encyclopedia of Management (6th
ed., pp. 892-898). Detroit, MI: Gale. Retrieved from
http://link.galegroup.com.ezproxy.umuc.edu/apps/doc/CX32731
00283/GVRL?u=umd_umuc&sid=GVRL&xid=670df17b
Uenlue, M. (2019, February 22). Amazon Prime Video.
Retrieved June 20, 2019, from
https://www.innovationtactics.com/amazon-business-model-4-
prime-video-and-fire-tv/
Villafañe, V. (2018, February 26). Televisa Launches Original
Content Unit And Inks Deal With Amazon Prime Video.

https://www.forbes.com/sites/veronicavillafane/2018/02/26/tele
visa-launches-original-content-unit-and-inks-deal-with-amazon-
prime-video/#7ebc143b4fc3
World Population Review. (2019). Mexico Population 2019.
http://worldpopulationreview.com/countries/mexico-population/
COMPETITOR ANALYSIS & STRATEGY
COMPETITOR ANALYSIS & STRATEGY
Mexico Competitor Analysis & Strategy
By

Contents
Executive
Summary………………………………………………………………
……….
Introduction…………………………………………………………
……………………..
Competitor Strengths and Weakness
analysis……………………………………………..
Recommended Competitive Strategy based on Porter's Generic
Strategies ……………..
Conclusion……………………………………………………………
…………………….
Reference……………………………………………………………
………………………
Executive Summary
The Walt Disney+ planning is expanding their service to other
countries, one of the target countries is Mexico. According to

Parrot analytics, Mexico is one of the biggest Subscription
Video On Demand (SOVD) countries. Mexico is expected to
grow up to 10 % from 9.4 million in 2018 to 14 million in 2022,
the estimated prediction is based on Future Source Consulting.
Currently, the two major subscription video on demand (SVOD)
service providers are Netflix and the local SVOD provider Claro
video. With these two major competitors, Disney + would need
to understand each strength and weakness for success entering
the Mexico SVOD market.
One of the challenges for Disney+ is variety of content. The
local SVOD Claro Video is popular because they offer the
Mexico people their favorite type of programming in both
audio, and video content, this gives customers options to not
just consuming video content but also audio content.
Another challenge Disney+ faces in Mexico is to compete with
Netflix’s loyal subscribers. According to Multimedia Content
Consumption , 36% of Mexican consumers surveyed say to have
the top two services contracted, 70% of them are Netflix, and
30% are followed by Claro Video.
Streaming media is more popular than ever, and will continue to
grow. Companies like Disney+ are part of new ideas governing
how TV shows and movies get made and distributed.
When entering a foreign country like Mexico, there are many
things that must be considered for Disney+ to be successful in
Mexico. A company gains a competitive advantage by providing
a product or service in a way that customers value more than the
competitions.
The vast selection of content for Disney+ will attract customers
to become engaged and loyal to Disney+. By offering a large
selection of movies and an easy to use menu will keep
customers returning. Increasing diversity in the workplace will
enable creativity and innovation, which will ultimately improve
marketing efforts. Both increases in marketing efforts and
engaging with consumers will help to be edge on the

competitors in the Mexico market.
Introduction
According to Wall Street Journal, Disney’s new streaming
service, Disney+ Plus is expected to grow to 60 to 90 million
subscribers by 2024. With a wide selection of Disney's classic
movies, exclusive TV shows, and new movies will certainly
attract new subscribers. However, will this be enough to
outperform Netflix and the popular local SVOD Claro Video.
Competitor Strengths and Weakness analysis
One of the strengths of Netflix is customers can view their
favorite programs on any device that has an internet or data
connection. Also, Netflix programs can be viewed without the
interruption of commercials. Netflix works with local cellular
phone services to promote mobile data deals to users to watch
Netflix without using up their cellular data.
One of the weaknesses is the ownership of the shows. Unlike
Disney+, Netflix does not own the majority of the movies or

TV shows, this is one of its disadvantages. In order to be
competitive Netflix would need to continue to offer the newest
and popular shows. Independent networks have innovated new
stories and are connected with the niche of the audience but
have found financing hard to come by (Burroughs, 2015). If the
relationship between the media company is ruined then they
may offer their business to the competitors of Netflix. It is a
difficult balance between developing more independent services
and relying on a partnership.
Claro Video is the most popular local SOVD provider in
Mexico. The company offers free subscriptions to clients of
América Móvil. They also team up with mobile businesses.
Currently, Claro Video is in second spot with 14.6% of this
growing market. Claro Video is popular in Mexico because they
provide local favorite shows and programs. Claro Video also
offers an
affordable rate for residents in Mexico. Claro Video also
provides SVOD in both audio and video format which is
convenient for people at work by being able to listen to favorite
shows.
Recommended Competitive Strategy based on Porter's Generic
Strategies
Bargaining Supplier Power
More and more movie networks are using their own streaming
services, most likely the Mexico local tv networks will be less
willing to share content with Disney+. Some of the local
company’s suppliers have become its competitors, and that
makes competition more difficult. It is possible for these
supplier competitors to keep choice content exclusive to their
platforms or charge Disney+ an extreme premium. In either
case, the supplier-competitor makes out on the deal and the
company's bottom line can take a hit. The effects of some of
these relationships may not be felt yet as the contracts that
Disney+ have in place tend to be longer term, but its suppliers
will have a fair amount of bargaining power in this regard as

those contracts expire and the supplier-competitor platforms
become stronger.
Degree of Rivalry among Competitors
In any industry competition exists. Disney + competes against
Netflix and local Claro Video directly, each one streams
movies as well as TV shows and creates some of its own
content. But Disney+ competes with other providers as well.
Major networks at Mexico like Claro Video have their own
streaming video service available on their websites and apps for
streaming devices like Roku, Apple TV and others. These
networks can stream their entire selections of shows. Consumers
would want the most of the shows they watches come from a
one network, that Consumers could most likely to subscribe to
a different streaming service over Disney+.
Threat of New Entrants
One such contender is Claro Video, a premium version of
Netflix with some extra features and selections of local favorite
program. Not only does it let subscribers watch its content but
also audio only. It also provides an affordable rate which
makes it difficult to compete. However, Claro Video can only
access to a specific demographic. Unlike Disney+ and Netflix
the content can have access worldwide.
Threat of Substitutes
Consumers can go from Netflix to Claro Video, or any other
SVOD at any time. Disney+ needs to ensure its selection is
compelling enough for subscribers to keep the service year-
round. It is also hard to compete against free services, and
Disney+ faces this competitive force on several fronts. For one,
Disney+ faces a risk of people substituting its service by
pirating. Whether the video pirates get their videos from one of
the many piracy sites on the Internet or through a friend’s
borrowed Disney+ log-in, there is an enormous potential cost
for the company.
Conclusion
There is always competition for every industry when expanding

a business or opening to a new market. For Disney+ expand
the service at Mexico Netflix and Claro Video may be the
biggest threats, but let’s not discount social media and
streaming gaming platforms. When will consumers be forced to
choose, and will they become more of a binge-watching
community and jump around from Disney to CBS All Access.
Subscription platforms need to think carefully about the bundles
and pricing they offer, to maintain viewership, but indeed
today’s audiences are likely to favor providers that allow
flexibility to tap in and out of different services and bundles.
Reference
DTVE Reporter (February 27, 2019). Futuresource: Mexican
SVOD subscriptions to grow 11% by 2022. Retrieved from:
https://www.digitaltveurope.com/2019/02/27/futuresource-
mexican-svod-subscriptions-to-grow-11-by-2022/
Winkler, E. (April 12,2019). Disney Wows Investors, But Can It
Beat Netflix? Retrieved from:
https://www.wsj.com/articles/disney-plus-wows-investors-but-
can-it-beat-netflix-11555081888
Kong, V. (November 6, 2015). HE FUTURE OF THE OTT
PLATFORMS. Retrieved from:
http://www.victorandrekong.com/the-future-of-the-ott-
platforms-2/

Horbuz, A. (September 20,2016). CLARO VIDEO OFFERS
NEW FREE STREAMING SERVICE. Retrieved from:
http://nextvnews.com/claro-video-offers-new-free-streaming-
service/
Parrot Analytics. (April 14, 2019). Mexico SVOD market share
trends based on audience demand for digital originals. Retrieved
from: https://www.parrotanalytics.com/insights/mexico-svod-
demand-market-share/
William, A. (March 6, 2019). Disney’s Generic Competitive
Strategy & Intensive Growth Strategies. Retrieved from:
http://panmore.com/disney-generic-competitive-strategy-
intensive-growth-strategies
Executive Summary
Founded in 1923, the Walt Disney Company is recognized as
one of the world’s largest entertainment companies. Since its
inception, Disney has grown at a rapid pace within the
entertainment industry through the production of television
programs, feature films as well as amusement parks. Throughout
its growth, Disney has acquired a number of different brands
including ESPN, ABC, Marvel Studios, Pixar, and Lucas Film
Ltd (The Walt Disney Company, n.d.). In 2018, Disney to earn
$59.4 billion in revenue and $13.1 billion in net income (The
Walt Disney Company 2018). The focus of Disney’s global
expansion is linked to their Direct-To-Consumer and
International business segment. This segment of Disney in
particular is where the company can truly leverage their brand
recognition and content to globally expand into international
markets through their recent acquisition of Hulu and launch of
Disney+ streaming services. Currently, Hulu is not offered in

locations outside of the United States and Disney+ will initially
be exclusive to the United States as well. In order to compete
with other streaming services such as Netflix, which operates in
190 countries, Disney must focus on the expansion of this
business area to retain a respective market share (Brennan,
2018).
The model for this business segment will strictly be buyer to
consumer (B2C) as it relies on personal use of the technology.
The target buyers for this business area will be anyone with
internet connectivity. In order to subscribe and stream content,
users must have access to a screened device as well as the
ability to connect to the service’s website or application.
In order to operate in a foreign country, Disney must ensure that
they have the proper technological infrastructure in place.
Currently, Netflix is the leading streaming provider in Mexico
and there are currently not many other major competitors.
Disney will be able to compete with Netflix in Mexico through
brand loyalty with content on Disney+ and through original
content created by Hulu. They will also be able to instantly
compete due to their subscription prices that fall lower for both
streaming services compared to Netflix. The company will also
be able to take advantage of this by bundling the two services as
a subscription package. In order to ensure a smooth entry into
Mexico’s market, Disney will implement a best-case
competitive strategy to provide buyers with lower costs and a
unique experience. As a result, Disney should expect to quickly
build its user population in Mexico due to its content and
subscription price.

Contents
Executive Summary i
Introduction 1
Global Competitor: Netflix 1
Local Competitor: Blim 4
Competitive Advantage Evaluation 5
Recommended Competitive Strategy 7
Conclusion 7
Reference 9
Running Head: MEXICO COMPETITOR ANALYSIS &
STRATEGY 1

MEXICO COMPETITOR ANALYSIS & STRATEGY iv
Introduction
As Mexico continues to grow their technological infrastructure,
more citizens will continue to gain access to streaming on
demand platforms. In the last seven years, Mexico has been able
to increase its total population’s access to the internet from
under 40 percent 68 percent (Diaz, 2013). This will provide
more consumers for streaming services such as Netflix and now
Disney. As a result, Mexico has observed consistent growth
within its SVOD segment in order to produces a total of $191
million with a total user population of 17.6 million in 2019.
Following the current projected growth, Mexico’s SVOD market
is predicted to generate $268 in total revenue with a total user
population of 21.7 million by 2023 (Statista, 2019). The
increase in users and revenue within this industry provide
Disney with an ideal location for their first country outside of
the United States to expand to. As Disney prepares to roll out
both its Hulu and Disney+ streaming services into Mexico’s
SVOD market, there are two major competitors that the
company should be aware of: Netflix and Blim.
Global Competitor: Netflix
Netflix is currently Disney’s largest competitor worldwide. The
company operates in over 190 countries and is the world’s
leading provider in entertainment streaming. Their entry into
the global market is one of the largest strengths of the company.
In order to complete this, Netflix underwent a 3 phase global
entry plan and succeeded in carrying it out. As a result they are
already able to have the global recognition that other companies
must still build. In order to successfully complete their plan,
Netflix needed to work with country governments in order to
ensure the content they offer complies with any media related
laws. This not only allowed Netflix to remain in legal
compliance but also promoted collaboration between Netflix
and local entertainment production companies to gain access to
their content as well as further understand the country’s

customer base (Frue, 2018). As a result, Netflix has been able to
implement content strategies for each country to maximize their
ability to attract new buyers. Their efforts over the last several
years has led to the company of having 7.3 million international
subscribers (Brennan, 2018). In Mexico specifically, Netflix
currently retains 63% of total VOD subscriptions (Martinez,
2018). The company is able to achieve this by their content
libraries of both licensed and original content. One of Netflix’s
biggest strengths in creating their content libraries is through
the production and release of original content.
Over the last five years, Netflix has quickly shifted its focus on
streaming content to adding their own produced and directed
entertainment. This shift has created a feeling of exclusivity
amongst its buyers as the content is only available within the
Netflix content. Shows such as House of Cards, Ozark, and
Birdbox have allowed to streaming company to generate more
sales and subscribers. After realizing the success of
implementing original content, Netflix has decided to further
expand this portion of their domestic business plan globally. As
of 2018, Netflix was responsible for 74 percent of Mexico’s
SVOD original content demand (Parrot Analytics, 2019). This
year, Netflix has announced that the company is currently set to
produce fifty new “series, documentaries, and films” within the
next two years in Mexico (Tillman, 2019). By creating content
which is created in Mexico, Netflix will be able to add
additional appeal to their SVOD platform and ultimately retain
a large portion of their consumer base.
Another major strength of Netflix’s operation Mexico has been
the company’s ability to avoid a large amount of the threats
associated with conducting business in Mexico. One of the most
notable threats that the company has avoided any major issues
with the Mexican government. Although Mexico does not have
the same censorship laws as countries like China and Russia,
they are well known for political corruption. Being able to
avoid any political controversy within the country has allowed
Netflix to focus primarily on their success.

Netflix was one of the first streaming platforms in Mexico. It
has implemented translation for all of its programs which are
not inherently Spanish and has been able to attract more buyers
based on their language support. Overall, Netflix has many
strengths and advantages to due being one of the first streaming
companies in Mexico. As a result it has been able to keep its
hold on a large portion of the market through the
implementation of their strengths.
Although their original content initiatives are a strength for the
company, it is also one of Netflix’s largest weaknesses. Original
content provides buyers of streaming companies with a feeling
of exclusiveness since the content is only available on the
streaming company’s platform. However, in the case of market
leaders such as Netflix, there can be too much original content.
By investing in such a high volume, Netflix is prioritizing
quantity over quantity. This can degrade the reputation of their
production as well as overwhelm consumers with too many
options at once. Additionally, a quantity based strategy can also
spread Netflix’s resources too thinly. As a result, streaming
companies are unable to find the amount of experience
professionals needed to produce their content. This is currently
an issue within Mexico’s original content production as Netflix,
Amazon and other streaming companies are all trying to fill
staff their teams with professionals from the same talent pool
(Tillman, 2019). Finally, investing in more content requires
more capital for companies to spend. For streaming services, the
primary form of income is through subscriptions. In order to
generate more income to invest back in original content, Netflix
and other streaming services must increase subscription prices.
Originally, Netflix’s subscription was under $10, however over
the last several years the company has raised prices in order to
be able to support the amount of original content they are
making (Frue, 2018).
Local Competitor: Blim
Despite Netflix’s large presence in the country, there has been
other local and global streaming services to enter the market as

well including a Mexico based one called Blim. In 2016
Mexico’s Telavisa launched Blim in order to attempt to compete
with other providers such as Netflix. Telavisa is one of
Mexico’s leading entertainment broadcasting companies and
used Blim as a method to reach more consumers that are
attracted to SVOD options with over 90,000 hours of Mexican
programming (Vallfane, 2018). The two current strengths for
Blim is the price point of the subscription and the content the
company provides subscribers. As a country with a very low
poverty line, Mexico’s economic environment does not make it
realistic for many of its citizens to indulge in luxury items such
as SVOD subscriptions. Therefore, having a lower price point is
a way subscription services can attract more buyers. Blim is
currently offered at cost of 109 pesos, or slightly over $5
(Bigurra, 2016). Additionally, Blim’s content library is also a
strength of theirs since it will be more likely to appeal to
Mexican consumers. While American content is still sought
after globally, there will always be a desire for content
produced in a buyer’s home country. As one of Mexico’s
leading broadcast provides, Telavisa will be able to make all of
their content available on Blim. The familiarity with such
programs alone will attract consumers for their SVOD service.
Although they will be cheaper and have more Mexican based
content, Blim is still a smaller scale company in the grand
scheme of Mexico’s SVOD market. The size of their market
footprint is not large enough to differentiate themselves from
the rest of their competition. Despite their strengths, Blim is
only the third leading streaming provider in Mexico (Villafane,
2018). The size of Blim is a gaping weakness for the company;
with the established presence of Netflix as well as planned
emergence of Disney+/Hulu they will not be able to make a
substantial competitive impact on the SVOD market but will
still be successful on a smaller scale.
Competitive Advantage Evaluation
Through the implementation of both Disney+ and Hulu, Disney
shares many of the same advantages as Netflix. With both

streaming services under its control, Disney will be able to
support original content as well as provide as already made
content to Mexico’s SVOD market. While Disney+ will create
original content, the true strength Disney currently owns for
original content lies within Hulu. Although Hulu is not
available in Mexico, there original content still is demanded in
Mexico; in 2018 it was determined that Hulu original content
had 7 percent of the demand share (Parrot Analytics, 2019).
Meanwhile, Disney+ will be used to address Disney’s biggest
strength of brand recognition. Disney+ will become the sole
streamer of Disney owned content including Marvel, Star Wars,
and Pixar. Each of these brands as well as Disney programming
are globally and will be Disney’s largest strength during their
entry into Mexico’s SVOD market.
Unlike Netflix, Disney’s largest weakness is that they have no
experience entering foreign SVOD markets. Currently Disney
has not had to deal with foreign government restrictions or
laws. Although Mexico does not have any major content
blocking legislation, it is prone to corruption and could be a
factor during Disney’s entry. Additionally, Disney will need to
add foreign language support to all of its content on both
streaming platforms to ensure that they maximize the appeal it
has to Mexican consumers.
Disney’s largest advantage over its competitors is the brand
recognition of its content. Disney owns a number of globally
well-known entertainment brands and will be the sole provider
of its content. Before the announcement that Disney+ would be
launching, Netflix had licensed a number of Disney titles
including Marvel, Star Wars, Pixar and Disney movies and
television programs. After the announcement, Netflix will no
longer to be permitted to air any of the titles it previously had
access to. This also includes all recent and future programs that
have not yet come to streaming. Based on the success of Disney
content in Mexico’s all time box office gross income, it is
apparent that Disney will have a market for their content that
will be featured on Disney+. Currently, Disney movies

represent eight of the top ten grossing box office of all time
with Avengers: Endgame generating $31.9 million opening and
$76.8 million total sales (Box Office Mojo, 2019).
The other major advantage Disney will have over its
competition will be the price it offers its services. Currently
Hulu’s basic subscription is offered at $5.99 per month and is
about half the price of Netflix. Users can upgrade to ad free
streaming for a price similar to Netflix’s, however their basic
package will appeal most to Mexico’s consumers as it rivals the
price point of Blim. Disney+ will also be cheaper than Netflix
and will be offered at $6.99 per month (Faughnder & James,
2019). With both services at a low price point, Disney also will
be able to bundles the subscriptions together as a package deal
for a discounted price to further appeal to buyers.
Recommended Competitive Strategy
Although very difficult to achieve at times within a competitive
business strategy, Disney should pursue a best-cost strategy.
Best-cost strategies are for organizations that are able to offer
“both low prices and unique features that customers find
desirable” (Saylor Academy, 2012). One of Disney’s biggest
advantages it has within the SVOD market is the price they
offer both Hulu and Disney+. Prices for each service are both
well below Netflix’s subscription price and can rival lower cost
local subscription services such as Blim. Additionally, Disney
is in the rare position where it owns two of the most well-
known services and can bundle the two together in a joint
subscription package for a reasonable price. This will allow the
company to appeal to financially appeal to buyers while also not
impacting income. Since Disney is such a diversified company,
they will not have to face the same weaknesses that Netflix has
in funding large amounts of original programming. The
company can leverage their brand recognition and desire for
Hulu originals to generate more buyers, which will assist the
company in future original content investments. Streaming
companies and the industry as a whole are inherently well
diversified. They provide consumers with a wide variety of

programming and content to choose from. Hulu and Disney will
have a unique selection of content for users to choose from
because of Hulu’s original content and globally known brands
featured in Disney+. By having a wide array of exclusive
content between both services, Disney will be able to offer a
higher volume of unique content than Netflix or other
competitors.
Conclusion
In order to create the best chance for success during their entry
into Mexico’s SVOD market, Disney must implement a best-
case competitive strategy. Through the company’s ownership of
both Hulu and Disney+ streaming services, Disney will provide
subscribers with a diverse content library that includes Hulu
originals and all major Disney brands. Additionally, the
company will be able to offer both services at a lower price
point than Netflix’s, while also offering subscribers with the
option to buy a package subscription that includes both
services. The biggest threat to Disney is the current market
share that Netflix has within Mexico’s SVOD market. While
there are also local competitors, such as Blim, Disney will be
able to easily pass them in shares based upon content volume
and quality. In order to carry out a successful best-case
strategy, Disney must combat Netflix’s dominance by focusing
on their brand loyalty as well as their subscription prices.
Reference
Bigurra, V. (2016 February 24). Televisa seeks to compete with
Netflix and launches Blim. Retrieved from
http://www.mexiconewsnetwork.com/en/news/televisa-launches-
blim-streaming/
Box Office Mojo. (2019). Mexico All Time Openings. Retrieved
from
https://www.boxofficemojo.com/intl/mexico/opening/?sort=ope
ning&order=DESC&p=.htm

Brennan, L. (2018 October 12). How Netflix Expanded to 190
Countries in 7 Years. Retrieved from
https://hbr.org/2018/10/how-netflix-expanded-to-190-countries-
in-7-years
Diaz, L. (2013 July 15). Mexico sees $300 billion in
infrastructure spending through 2018. Retrieved from
https://www.reuters.com/article/us-mexico-
infrastructure/mexico-sees-300-billion-in-infrastructure-
spending-through-2018-idUSBRE96E0SA20130715
Faughnder, R. & James, M. (2019 April 12). Disney bets its
$6.99-a-month streaming service will be a game-changer.
Retrieved from https://www.latimes.com/business/hollywood/la-
fi-ct-disney-plus-investor-day-star-wars-marvel-20190411-
story.html
Fure, K. (2019 May 21). SWOT Analysis of Netflix. Retrieved
from https://pestleanalysis.com/swot-analysis-of-netflix/
Martinez, C. (2018 May 23). Mexicans pay the most for web TV
in Latin America. Retrieved from
https://www.eluniversal.com.mx/english/mexicans-pay-most-
web-tv-latin-america
Parrot Analytics. (2019 April 14). Mexico SVOD market share
trends based on audience demand for digital originals. Retrieved
from https://www.parrotanalytics.com/insights/mexico-svod-
demand-market-share/
Saylor Academy. (2012). Selecting Business-Level Strategies.
Retrieved from https://saylordotorg.github.io/text_mastering-
strategic-management/s09-selecting-business-level-strat.html
Statista. (2019). Video-on-Demand: Mexico. Retrieved from
https://www.statista.com/outlook/201/117/video-on-
demand/mexico
Tillman, L. (2019 May 8). Search for Top Talent Heats Up as
Netflix and Amazon Increase Film and TV Shoots in Mexico.
Retrieved from https://variety.com/2019/film/news/netflix-
amazon-mexico-shoots-1203206756/
The Walt Disney Company. (2018 September 29). 10-K Form.
Retrieved from https://www.thewaltdisneycompany.com/wp-

content/uploads/2019/01/2018-Annual-Report.pdf
The Walt Disney Company. (n.d.). ABOUT THE WALT
DISNEY COMPANY. Retrieved from
https://www.thewaltdisneycompany.com/about/

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