The Walt Disney Company
1. According to the Harvard Business School case booklet, Disney started from the short cartoon industry into major industries such as licensing, distribution, movie, home video, merchandise, internet (Distribution channel), hotel and resort, sports restaurant (EPSN zones), cruise ship (Disney Magic Cruise 1998), theme park (1955 Anaheim, 1971 Orlando, 1976 Tokyo, 1992 Paris), and television network (ABC 1995).
2. Walt Disney Company pursues several different ways to diversify:
-The first step Walt Disney Company took to diversify itself was when they started to license out their cartoon characters allowing merchandizer to sell Disney products. This was a horizontal diversification strategy as Walt Disney Company did not control these vendors besides collecting on licensing fee and a portion of ...view middle of the document...
-The fourth step Walt Disney Company took to diversify itself was when it Greenfield invested into the resort and hotel industry. The hotels and resorts although considered horizontal in the diversification strategy with the Walt Disney Company, it provided the support for the theme parks to keep customers closer to the parks while delivering the same theme feeling as the park.
-The fifth step Walt Disney Company took to diversify itself was when it acquired CapCities/ABC to own a programming distribution channel. This was a vertical forward integration effectively allowing Disney to have its own distribution channel for all Disney TV shows.
-The sixth step Walt Disney Company took to diversify itself was when Greenfield invested in cruise line industry by commission first two new cruise ships in 1998 and 1998 and then two more in 2011 and 2012. The diversification strategy in cruise lines was a vertical forward which allowed Walt Disney Company another way to promote and distribute its main products while gaining market power in a whole new industry.
-The last step Walt Disney Company took to diversify itself was when it attached ESPN zone, sports restaurant, to appeal to adults who are taking their children to the theme park. This was again a horizontal strategy that helped promote the theme parks for all ages.
3. I believe that Walt Disney Company most of the expansions has benefited the company overall. If we looked at Exhibit 1 in the Walt Disney Case, without the expansion into the theme park and resorts, consumer product, and media network industry, Walt Disney Company’s studio entertainment (film) would only make around $5.994 billion out of the $25.402 billion. The trend has shown a drop in revenue in the studio entertainment (film) segment while increases in the other three segments mentioned above. The only expansion I believe that has been a bad decision was the internet and direct marketing segment. This is the only segment posting a lost.