Walt Disney Company Diversification
Essay Preview: Walt Disney Company Diversification
Report this essay
WALT DISNEY COMPANY DIVERSIFICATION
Founded in 1923, Disney Brother Studio (the name of the studio was changed to Walt Disney Productions in 1929) is the origin of the entertainment king; The Walt Disney Company. As time passes alongside with the success of Micky Mouse, Goofy, and Donald Duck, Disney Company expanded its corporate domain (diversification). In 2000, the company was diversified through five business lines (exhibit 3 case study): Media network; studio entertainment; theme parks and resorts; consumer products; and internet and direct marketing. Media network and studio entertainment are related diversification while theme parks and resorts, consumer products, and internet and direct marketing are unrelated diversification.
Each of the business lines is divided into other categories characterised by the horizontal diversification strategy, for example, media network is diversified into broadcasting and cable network. Furthermore, the company also apply vertical diversification within their business, e.g. consumer products business line produces books, magazines, audio and video which were sold in a store which is also owned by Disney (see Table 1. Disneys Business Lines Diversification overview). The acquisition of ABC also categorises as vertical diversification, to the degree that it was a route for Walt Disney to diffuse a portion of its projects alone.
Table 1. Disney’s Business Line Diversification Overview
RELATED DIVERSIFICATION
UNRELATED DIVERSIFICATION
Horizontal Integration
MEDIA NETWORK
Broadcasting
Cable Network and International
STUDIO ENTERTAINMENT
Theatrical Films
Buena Vista Home Entertainment
Buena Vista Music Group
Theatrical Productions
Distribution
Television Production
Tele-ventures
THEME PARKS AND RESORTS
Walt Disney Attraction
Walt Disney Imagineering
Anaheim Sports
Disney Regional Entertainment
CONSUMER PRODUCTS
Merchandising Licensing
The Disney Store
Disney Publishing
Walt Disney Art Classics
Disney Interactive
INTERNET AND DIRECT MARKETING
Disney Online
ESPN Internet Group
ABC Internet Group
Vertical Integration
BROADCASTING:
ABC Television Network
TV Station
ABC Radio Network
Radio Stations
CABLE NETWORK & INTERNATIONAL
ESPN
Disney Channel
Toon Disney
SoapNet
THETRICAL FILMS
Walt Disney Picture
Touchstone Pictures
Hollywood Pictures
Miramax
BUENA VISTA MUSIC GROUP
Hollywood Records
Mammoth Records
Lyrics Records
DISTRIBUTION
Buena Vista
Buena Vista International
TELEVISION PRODUCTION
Program Development
First-Run Animation
Live-Action Syndication
Pay Television Services
WALT DISNEY ATTRACTION
Disneyland Resort
Walt Disney World Resort
Disney Vacation Club
Disney Cruise Line
Tokyo Disneyland
ANAHEIM SPORTS
Mighty Ducks of Anaheim
Anaheim Angels
DISNEY REGIONAL ENTERTAINMETN
DisneyQuest
ESPN Zone
No vertical integration within consumer product and internet and direct marketing division
In 1954, Walt Disney started pursuing a strategy of financial economies: the ABC-produced television program Disneyland was bound to produce financing and gain people awareness. Then, the real park is created the same strategy. With Eisner, management incentives appeared with the employees training. In the meantime, the efforts made to boost theme park profitability were the aftereffect of an income improvement system by organising the organisations to build an eagerness to pay off the customers; this strategy applied the concept of retail-as-entertainment.
SOURCE OF SYNERGY USED BY DISNEY’S CORPORATE STRATEGY
Since 1984, Eisner takeover Disney Company. To maximise shareholder wealth, he planned to build Disney brand while doing companys activities. All the new employees and executives are required to join a three-day training program at Disneys corporate university which includes the history and culture of the company and the legacy of Walt Disney. To develop the sense of “Disney Pride”, the program required them to worn Disney characters custom at the theme parks. Nevertheless, in 1987, the company installed corporate marketing function to coordinate the promotional activities within the businesses,