The Walt Disney Company’s diversification strategy can be classified as related linked. Less than seventy percent of the firm’s revenue comes from any one business and the businesses share only a few links across them. Disney is in the theme park, movie/TV production, TV broadcasting, and merchandising industries. Several of these businesses market the same characters across them such as Mickey Mouse. ESPN is in the TV production and TV broadcasting industry and is linked to other Disney companies like the Disney Channel .
- The Walt Disney Company Its Diversification Strategy In 2014 2018
- The Walt Disney Company: Its Diversification Strategy In 2014
- The Walt Disney Company Its Diversification Strategy In 2014 Due
Disney viewed their restructuring as a business operations goal and not a problem. The stated objectives for the diversification efforts from Walt Disney CEO were focused on “creating a more effective, global framework to serve consumers worldwide, increase growth, and maximize shareholder value” (Walt Disney, 2018). Question: Read The Walt Disney Company: Its Diversification Strategy In 2018 Case. What Is Their Central Problem And Mission? PESTEL Analysis 3. Competitor Analysis 4. Value Chain Analysis 5. Resources & VRIN Analysis 6. Industry Analysis/ Competitive Strength Matrix 8. 9 The Walt Disney Company: Its Diversification Strategy in 2018 Assignment Questions 1. What is The Walt Disney Company's corporate strategy? What is your assessment of the long-term attractiveness of the industries represented in The Walt Disney Company's business portfolio? Everyone The Walt Disney Company Its Diversification Strategy In 2014 Case Study out there wishes to be successful in binary trading. As such, Option Robot has a lot of lucrative offers to make The Walt Disney Company Its Diversification Strategy In 2014 Case Study you earn higher profits in a small span of time. The Walt Disney Company: Its Diversification Strategy in 2012. For further improving The Walt Disney Company’s performance, the company’s management needs to take a look on their innovative fronts. Disney must continue to strengthen operations by identifying new opportunities in the current target markets, with Disney's incredible brand.
The chapter points out that diversification within a company is not necessarily always positive for investors. Most recent research shows that diversified companies create less value than focused firms. The Walt Disney Company is a great example of diversification not providing as much value. Currently ESPN is a financial drain to Disney. The Disney parks are doing very well, but the company’s stock price is not reflective of that due to ESPN losing money. If Disney limited its core businesses, it would be performing financially better today for its investors. As the book points out in this chapter, a company should only diversify into activities that it has strategic advantages that it can exploit to create value. It makes sense for Disney to run businesses that help promote its theme parks like the Disney channel, merchandising, and its traditional movies do, but venturing beyond has proven to be a financial burden.
Sources:
Revenue of the Walt Disney Company in the fiscal year 2015, by operating segment (in billion U.S. dollars): http://www.statista.com/statistics/193140/revenue-of-the-walt-disney-company-by-operating-segment/
Barney, J (2011). Gaining and Sustaining Competitive Advantage (4th ed). Upper Saddle River, NJ: Pearson.
When Success Isn’t Enough: What’s Holding Back the Disney Parks: http://www.themeparkinsider.com/flume/201602/4950/
Autor: Sharon • October 4, 2018 • 1,842 Words (8 Pages) • 383 Views
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For further improving The Walt Disney Company’s performance, the company’s management needs to take a look on their innovative fronts. Disney must continue to strengthen operations by identifying new opportunities in the current target markets, with Disney's incredible brand recognition in market it will not be that hard. But along with that Disney also need to maintain their values and be fully compatible with either their entertainment niche or also possibly along the informational divisions.
SWOT Analysis
Strengths
Weaknesses
Strong brand portfolio.
Diversified entertainment businesses.
Brand reputation.
Competency in acquisitions.
Diversified businesses.
Localization of products.
Concentration of operation.
Few opportunities for significant growth through acquisitions.
Opportunities
Threats
Increased focus on expanding presence in emerging economies.
Growth of entertainment industries in emerging markets.
Expansion of movie production to new countries.
Competitive pressure.
Increasing piracy.
Strong growth of online TV and online movie rental.
Strengths
The Walt Disney Company’s products product portfolio provides a competitive advantage for the company over its competitors. Their brand has been known for more than 90 years and has been widely recognized worldwide, especially due to its Disney Channel, Disney Park resorts and movies from Walt Disney studios. One of the strongest sides the company has is its competency in acquisitions. The Walt Disney Company has acquired Pixar Animation Studios in 2006, Marvel Entertainment in 2009 and Lucasfilm in 2012. Those have already proved to be very successful in terms of revenue and profit growth. Few other Disney competitors have had such record of successful acquisitions. The business operates five different business segments, in many different economies and is generating their income using different business models. Due to such diverse operations, Disney is less affected by changes in external environment than its competitors are. Recently, Disney has started adapting its products to suit local tastes. Besides the parks and resorts, company’s movies and consumer products are adapted for Chinese market to attract more visitors. This is rarely initiated by the movie studio itself and is something that few other studios are doing.
Weaknesses
Heavily dependent on North America, although Disney operates in more than 200 countries, it heavily depends on United States and Canada markets for its income. More than 70% of the business the revenues come from US alone, while the major Disney’s competitor News Corporation receives less than 50% of revenues from US, making it less vulnerable to changes in US market (Market Daily News, 2013). There are few opportunities for significant growth through acquisitions. They are the largest entertainment provider in the world and has become so due to acquisition of competitors. The last Disney’s acquisition had to be approved by Federal Trade Commission so that the company wouldn’t have to deal with antitrust problems. This means that the size of the Disney’s business has become a concern for the government due to significant market concentration and that the company has very few opportunities to acquire competitors. Otherwise, Disney may become a subject to antitrust laws (Market Daily News, 2013).
Opportunities
Disney Company has already entered international markets and should continue to strengthen its position there to benefit from such high industry growth. Also, Disney has an opportunity to expand its movie production, where movie production industries have developed good quality infrastructure. This would result in lower movie production costs and more localized movies for international markets.
Threats
The intense competition in very competitive industries is the biggest threats. The competitive landscape changes quite drastically in the industry and new competitors with new business models compete more successfully than incumbent media companies. Disney’s parks and resorts business segment also receives strong competition from local competitors who can offer better-adapted product. This results in growing competitive pressure for Walt Disney Company. Disney also faces the bad side of advancements in technology, piracy. Copying, transmitting and distributing copyrighted material is much easier and this poses a great risk to Disney’s income, as fewer people would go to watch movies in a cinema or buy its DVD, when it’s freely available online.
The SWOT Analysis indicates that Disney must pay close attention to the potential threats that can inhibit the company’s continued growth and threaten its financial security.
REFERENCES
The Walt Disney Company Its Diversification Strategy In 2014 2018
Carillo, C., Jeremy C., Kendree, T., & Jeffrey S. H. (2012). The Walt Disney Company: A corporate strategy analysis. University of Richmond: Robins School of Business.
Gamble, J., Peteraf, M. A., & Thompson, A. A. (2013). Essentials of strategic management: the quest for competitive advantage 4th Ed. New York: McGraw-Hill Education.
Market Daily News. (2013). The Walt Disney Company: A Fairy Tale Growth Story. Retrieved from http://marketdailynews.com/2013/05/20/the-walt-disney-company-nysedis-a-fairy-tale-growth-story/.