Case 20 The Walt Disney Company: Its Diversification Strategy in 2012
1. What is Walt Disney Company’s corporate strategy? Explain.
The company has three strategy the first one is creating high-quality family content. Disney want to make sure the content they provide must be high quality. Disney had also made much of its content available digitally, including its WatchESPN services for Internet, smartphone, and table computer users, its growing list of Disney Publishing e-book offerings, and family content available through its partnership. The second strategy is exploiting technological innovations to make entertainment experiences more memorable. Disney do everything to make their park and content be perfect. Disney’s corporate strategy called for sufficient capital to be allocated to its core theme parks and resorts business to sustain its advantage in the industry. The company expanded the range of attractions at its Disney California Adventure park with the addition of the $75 million World of Color water and light show in 2010 and the $200 milion Radiator Springs outdoor race track in Cars Land in 2012. The third strategy is international expansion. Disney’s international expansion efforts were largely directed at exploiting opportunities in emerging markets. In 2012, the Disney Channel reached 75 percent of viewers in China and Russia and was available in more than 100 countries, compared to 19 countries in 2002. Disney opened a Toy Story Land attraction at Hong Kong Disneyland in 2011 and had two more lands planned for the Hong Kong resort.
2. What is the assessment of the long-term attractiveness of the industries represented in Walt Disney Company’s business portfolio?
The industry attractiveness assessment clearly shows that the media networks and the parks and resorts industries are the most attractive to Disney. Both of these industries have a high cross industry strategic fit and large market size and expected growth. The bottom three industries (studio entertainment, consumer products and interactive media) are closely lumped together with interactive media trailing as the least attractive industry. This comes from the intensity of the competition as well as the seasonality of the industry. 3. What is the competitive strength of assessment of Walt Disney Company’s business units?
The competitive strength assessment shows that Walt Disney is the strongest in its most attractive industries. Walt Disney is the strongest in the media networks business unit followed by their parts and resort division. Walt Disney has 21.74% market share in the media networks segment and 51.47% of the market share of the parks and resorts segments. Disney is also able to match or exceed rivals in these categories on most occasions. These business units also score high in terms of benefiting the sister business units. The business unit that scores the lowest is the interactive media business unit. Currently Walt Disney only has 5.54% of the market share of the interactive media segment because of the many competitors (CSIMarket.com). 4. What does a 9-cell industry attractiveness/business strength matrix displaying Walt Disney’s Company’s business units look like?
The nine-cell industry attractiveness-competitive strength matrix adds to the analysis from the previous charts. It clearly shows that Disney’s media networks and parks and resorts business units are best positioned to succeed. 5. Does Walt Disney’s portfolio exhibit good strategic fit? What value chain match-ups do you see? What opportunities for skills transfer, cost sharing, or brand sharing do you see?
The Disney’s porfolio exhibit good strategic fit. The media networks, parks and resorts, studio entertainment and consumer products all have good growth rate. The opportunity is the media networks can help all other service and products do a good...
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