Case Analysis Of Walt Disney Company

The Walt Disney Company: The Entertainment King

The Walt Disney Company was founded by its name giver Walter Elias Disney and his brother Roy Disney in 1923. At the beginning the core business was the making of animated films. Nowadays The Walt Disney Company is present in many sectors such as television, video games, theme parks, music or radio. In 1984 Michael Eisner, who was formerly the COO and president of Paramount Pictures, took over the company.
Diversification is a corporate strategy of a company that describes the entering of new markets that the company is currently not present in. There are many different ways to diversify in a company. After 1995 Disney implemented three different diversification strategies to help them achieve

Until then the company only generated about 21% of revenue from its overseas markets which is quite a small amount compared to other global companies such as Coca-Cola that generated about 63% of revenue from overseas. In order to be more effectively in its overseas operations, Disney decided to strengthen the foreign offices of each country by employing a regional executives that included a brand manager and a Chief Financial Officer. This idea evolved partly to save money by providing workers with shared office spaces but on the other hand also to create more synergy via cross-promotions.
For Disney this was a good strategy because the focus on the international market helped them grow further and be better recognized overseas. After the opening of the theme parks outside of the USA the revenues from these countries had increased steeply. However, geographical diversification also includes the risk of culture clashes as one enters a completely different market and Disney had many problems due to different cultures and thereby damaging their brand and image as for example when they produced a movie of the Dalai Lama that the Chinese government found

In the United States they started to create new venues for people to experience Disney in a new and better way. One example of it would be the development of sports restaurants where people would have interactive sports attractions. These, however, were not only designed for kids but also adults. Another thing that Disney did during there years is entering the business of cruise ships and educational facilities. An additional facility that opened in 1996 was the so called Disney Institute which focused more on adventure education and fitness which was a rather new thing since until then Disney focused mainly on entertainment. This facility targeted adults and families with older children and offered many different courses especially designed for this target group, as for example landscape design or culinary arts. Thus Disney tried to target more customers in order to generate higher revenue and make Disney appealing to not only kids but also adults.
Due to the acquisition of more businesses and the investment in new sectors it will be quite hard for Disney to keep track on all of its operations and there is a chance that Disney loses sight of its core business, film making, and also slow down growth in this sector. This diversification strategy is also the riskiest because it is never known how such acquisitions will turn out and what happens if they fall, then Disney has invested a lot of money into