Case study The Walt Disney Company: The Entertainment King
1.Briefly describe the type(s) of diversification strategies that Walt Disney pursues/has pursued over the years. The Walt Disney company can be seen as a highly diversified company. Over the years, it has pursued a wide range of diversification strategies that we can enhance:Horizontal integration: obviously, Walt Disney has invaded several markets, diversifying its offer to many fields. In 2000, we can find five big main fields of action where Walt Disney operates: Media Network, studio entertainment, theme parks and resort, consumer products and internet and direct marketing. Moreover, each of these categories is itself divided in other categories characterized by the horizontal diversification strategy. For instance, we can break the media network category in two: broadcasting and cable network. In a way, we can also consider that Walt Disney favored vertical integration: for instance, many of its products (books, magazines, VHS, audio and computer software, etc) were sold in stores simultaneously owned by Disney. The acquisition of ABC can also be considered as an expression of this strategy of vertical integration, to the extent that it was a way for Walt Disney to diffuse some of its programs on its own. In 1954, Walt Disney started pursuing a strategy of financial economies: the ABC-produced television program Disneyland was actually destined to generate financing and stimulate public interest. The creation of the first park in 1955 pursued the same strategy. With Eisner, management incentives appeared with the employees training. At the same time, the efforts made to maximize theme park profitability were the result of a revenue enhancement strategy by coordinating the businesses in order to increase to willingness to pay of the consumers; The retail-as-entertainment concept is coherent with this strategy. The calendar of promotional activities of the next six months, introduced in...
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