The Walt Disney Company: the Entertainment King
Maximilian Scheufler
Strategic Management
The Walt Disney Company: The Entertainment King[1]
I. Why has Disney been successful for so long?
Disney’s long-run success is mainly due to creating value through diversification. Their corporate strategies (primarily under CEO Eisner) include three dimensions: horizontal and geographic expansion as well as vertical integration. Disney is a prime example of how to achieve long-run success through the choices of business, the choice of how many activities to undertake, the choice of how many businesses to be in, the choice of how to manage a portfolio of businesses and the choice of how to create synergies between those businesses (3, p.191-221). All these choices and decisions are made through Disney’s corporate strategies and enabled them to reach long-term success. One will discuss Disney’s long-run success through a general approach. Eisner’s turnaround of the company and his specific implications/strategies will be examined in detail in part II. Disney could reach long-run success mainly through the creation of value due to diversification and the management and fostering of creativity, brand image and synergies between businesses (1, p.11-14).
The most important part of Disney’s long-term success is due to its key strategic choices and incorporation of various diversification strategies. Disney created value mainly through “vertical integration” of its business lines, especially through the concept of forward integration. For example, Disney integrated production of movies and the final distribution in cinema’s or on television, especially through its acquisition of ABC in 1995 (1, p.6/7). Through this acquisition, Disney was able to extent its boundaries quickly and gain access to a wider level of distribution for its products. Furthermore, forward integration was accomplished between its various channels and its retail stores (“retail-as-entertainment” concept) (1.p.6) or theme parks, which enabled
Strategic Management
The Walt Disney Company: The Entertainment King[1]
I. Why has Disney been successful for so long?
Disney’s long-run success is mainly due to creating value through diversification. Their corporate strategies (primarily under CEO Eisner) include three dimensions: horizontal and geographic expansion as well as vertical integration. Disney is a prime example of how to achieve long-run success through the choices of business, the choice of how many activities to undertake, the choice of how many businesses to be in, the choice of how to manage a portfolio of businesses and the choice of how to create synergies between those businesses (3, p.191-221). All these choices and decisions are made through Disney’s corporate strategies and enabled them to reach long-term success. One will discuss Disney’s long-run success through a general approach. Eisner’s turnaround of the company and his specific implications/strategies will be examined in detail in part II. Disney could reach long-run success mainly through the creation of value due to diversification and the management and fostering of creativity, brand image and synergies between businesses (1, p.11-14).
The most important part of Disney’s long-term success is due to its key strategic choices and incorporation of various diversification strategies. Disney created value mainly through “vertical integration” of its business lines, especially through the concept of forward integration. For example, Disney integrated production of movies and the final distribution in cinema’s or on television, especially through its acquisition of ABC in 1995 (1, p.6/7). Through this acquisition, Disney was able to extent its boundaries quickly and gain access to a wider level of distribution for its products. Furthermore, forward integration was accomplished between its various channels and its retail stores (“retail-as-entertainment” concept) (1.p.6) or theme parks, which enabled
Citations: (1) Michel G. Rukstad, David Collis; The Walt Disney Company: The Entertainment King; Harvard Business School; 9-701-035; Rev. January 5, 2009 (2) Robert La Franco, “Eisner’s Bumpy Ride”, Forbes, July 5, 1999, p.50 (3) Dess, Lumpkin, Eisner; Strategic Management: creating competitive advantages; 4ed; McGraw-Hill ----------------------- [1] Information was mainly taken from the Harvard Business Case Study “The Walt Disney Company: The Entertainment King”