Disney Analysis

The Entertainment King in Action

1) Disney has been quite successful due to creating value through diversification. The Walt Disney Company is a highly diversified company. The company has invaded many markets, diversifying its mission in many fields, such as theme parks and resort, products sold on the internet, and of course media network and studio entertainment. Every one of these fields contributes greatly to the astonishing growth of Disney. Disney integrated production of movies and television, specifically through its acquisition of ABC in 1995. With this acquisition, Disney was able to extent its kingdom to gain access to larger areas of viewers and distributers.

2) Over the years, Disney has tried many diversification strategies that we have studied: Horizontal and vertical integration. Disney enhances horizontal integration because the company entered different markets in order to expand. But, Disney creates value mainly through vertical integration. For example, Disney sold many of its products such as magazines, toys, and books through stores owned by Disney. Also, the powerful acquisition of ABC allows Disney to diffuse Disney programs and shows on its own. Disney uses vertical integration strategy to greatly promote its products, events, and entertainments.

3) I believe that these expansions of Disney are a good idea because companies need to grow in order to survive. But growth in the entertainment industry is a challenge in today’s market. Entertainment, especially animations, will not grow if they don’t diversify their resources. The CEO, Michal Eisner, believes that the company “must continue to swing” in order to make a homerun. I agree with Eisner because if an entertainment company does not continue to grow with new ideas, then the old one simply became outdated and boring overtime. Although a lot of critics argued that Disney might become “too big to handle” and will eventually become unsuccessful to manage, I believe that the...