Walt Disney Company was founded in 1923 and now has become a world leader in the entertainment industry. Diversification of products and services is a strategy that Disney clearly focused on in order to establish a competitive advantage in the entertainment market. Over the years it has diversified into 5 different business lines showing that it’s ‘magic’ comes from its many synergies.
Over the years it has developed a very strong and well known "brand-name" over many years and its products are more ‘Disney’ than an actual product. This has lead to high brand loyalty as for most people it has no substitute and given the organization the ability to adapt when business lines perform poorly. e.g. when theme parks were not doing well, new movie revenues were maintaining the success.
Disney’s biggest and most value creating synergy was its marketing and advertising strategy. Despite the high prices, Disney’s Parks and Resorts number’s of visitors which are unmatched by its competitor. The very reason behind their success lies in the firm’s marketing strategy. Due to the interrelated businesses it is able to promote and market each division’s products/service through another. Hence selling more to existing customers, e.g. at Disneyworld there would be Disney Stores to sell merchandise etc. Furthermore, it is continually expanding its marketplace and markets all across the world. The opening of Disney Tokyo or Disney Stores worldwide not only expanded the firm geographically but also increased awareness. The ownership of TV and Radio channels allowed advertising to different target audiences, e.g. ABC and Disney Channel.
Promotions of a movie were made through McDonalds etc, the television and movie companies made and distributed the movie and trailers, television channels allowed for viewing. The radio stations promoted the movie, while links on the different websites provided web-goers a peek at the movie and but online products. The recording companies...
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