The Walt Disney Company Essay
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1. According to the Harvard Business School case booklet, Disney started from the short cartoon industry into major industries such as licensing, distribution, movie, home video, merchandise, internet (Distribution channel), hotel and resort, sports restaurant (EPSN zones), cruise ship (Disney Magic Cruise 1998), theme park (1955 Anaheim, 1971 Orlando, 1976 Tokyo, 1992 Paris), and television network (ABC 1995). 2. Walt Disney Company pursues several different ways to diversify: -The first step Walt Disney Company took to diversify itself was when they started to license out their cartoon characters allowing merchandizer to sell Disney products.
This was a horizontal diversification strategy as Walt Disney Company did not control these vendors besides collecting on licensing fee and a portion of the merchandize profits. -The second step Walt Disney Company took to diversify itself was when they Greenfield invested to form their own film and home video distribution company (Buena Vista).
This was a vertical forward integration effectively cutting out the middle man costs. -The third step Walt Disney Company took to diversify itself was Greenfield invested into the theme park industry.
The theme park was a vertical forward diversification strategy that provided a different output to promote their cartoons. -The fourth step Walt Disney Company took to diversify itself was when it Greenfield invested into the resort and hotel industry. The hotels and resorts although considered horizontal in the diversification strategy with the Walt Disney Company, it provided the support for the theme parks to keep customers closer to the parks while delivering the same theme feeling as the park. -The fifth step Walt Disney Company took to diversify itself was when it acquired CapCities/ABC to own a programming distribution channel.
This was a vertical forward integration effectively allowing Disney to have its own distribution channel for all Disney TV shows. -The sixth step Walt Disney Company took to diversify itself was when Greenfield invested in cruise line industry by commission first two new cruise ships in 1998 and 1998 and then two more in 2011 and 2012. The diversification strategy in cruise lines was a vertical forward which allowed Walt Disney Company another way to promote and distribute its main products while gaining market power in a whole new industry.