1. How Walt Disney Company expanded its corporate domain? Explain which of the industries to which...

Question

1. How Walt Disney Company expanded its corporate domain? Explain which of the industries to which Disney has expanded qualify more related or unrelated diversification. You need to specify the particular type of related or unrelated diversification.

The aim of this question is to draw your attention to the most relevant information and separating them from the less relevant ones. By doing so, it serves the purpose of guiding you through responding to question 2 and 3. Thus, you need to be very concise in answering this question (rule of thumb: 300 (+/- %10) words).

- Your answer should contain two elements:

- - You first say Walt Disney has been diversified through X, Y and Z.

- - Second, explain X reflects more vertical integration because …. Y reflects more unrelated diversification because … etc. As we have explained in the class, identifying diversification strategy is not always very straight forward and absolute related and unrelated diversifications are two sides of a spectrum, while many diversifications fit in between. Therefore, we need your brief reasoning.

2. What sources of synergy are being utilised by Disney’s corporate strategy under the leadership of Robert Iger?

3. Explain how the sources of synergy in Iger’s era XXXXXXXXXXdiffer from the synergy utilised in Eisner’s era (1984 – 2005) and Walt Disney’s era (pre-1966).

NOTE: i can provide lecture slides if it help

Tanmoy · Accepted Answer

Walt Disney
1. How Walt Disney Company expanded its corporate domain? Explain which of the industries to which Disney has expanded qualify more related or unrelated diversification. You need to specify the particular type of related or unrelated diversification.
Walt Disney began its journey as a cartoon animation company. The characters are world famous Mickey and Mini mouse. It all began with the Disney Brothers Studio which was initiated in October 1923 by the two brothers Walter and Roy Disney. It is from here they started producing animated films. 
In the year 1955, Disney inaugurated its first theme park in Anaheim, California and named it as Disneyland. 
It was in the year 1983 that the Disney Channel was pictured on television. It was targeted at the kids and children who would love watching these cartoon characters. In the same year they opened Tokyo Disney with two theme parks and three hotels. In 1992 the opened two theme parks and seven hotels in Europe and named it as Euro Disney.
They acquired Buena Vista in the year 1980 to expand their vertical integration process by distributing their production of animated films to the customers through CDs and DVDs.
In the year 1993, at an amount of $70 million they acquired Miramax Film Corporation. In 2005, Miramax Films was valued at $2 billion. Later Miramax was sold to Tutor-Saliba Corporation in the year 2010. This was a vertical integration of Disney in its diversification strategy.
Another major breakthrough acquisition was the purchase of Capital Cities/ ABC for $19 billion. Through this purchase the company had right to use the television and cable network of ABC and ESPN. This was a forward integration strategy of Disney as it was not related to Disney’s standard film production process.
Disney purchased Pixar which was a computer animation power company at a price of $7.4 billion. It was at this time when Steve Jobs the founder of Pixar and also Apple joined the Board of Directors of Disney. Pixar and Disney works almost in similar animation space which enabled both to reduce the cost of production and enhanced the exchange of technologies. Hence it was horizontal diversification of Disney.
The comic book character company Marvel was acquired by Disney in the year 2009 for $4 billion. The comic book Marvel had few famous comic superhero characters like the Spiderman, X-Men, Thor and Captain America. Marvel was also a horizontal diversification by Disney.
In October 2012, Disney acquired the famous Lucasfilm at a price of $4 billion. Lucasfilm had produced some famous blockbuster films like Indiana Jones and Star Wars. (Robins School of Business; The Walt Disney Company: A Corporate Strategy Analysis; By Carlos Carillo, Jeremy Crumley, Kendree Thieringer, Jeffery. S. Harrison; November 2012; Pg 1 & 2)
Hence Disney’s main business was cartoon animation. But,

1. How Walt Disney Company expanded its corporate domain? Explain which of the industries to which Disney has expanded qualify more related or unrelated diversification. You need to specify the...

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