Related Diversification Strategy In The Walt Disney Company

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The Walt Disney Company (Disney) utilizes a related diversification strategy. Related diversification “involves diversifying into businesses whose value chains possess competitively valuable ‘strategic fits’ with value chain(s) of [a] firm’s present business(es)” (Geiger, 2004). Strategic fits occurs when value chain activities of diverse businesses are similar to current opportunities for cross-business sharing or transmitting of the resources and capabilities that facilitate these activities (Thompson et al., 2016, p. 217). Disney utilizes this strategy with its numerous businesses organized into its five divisions of its business units (BUs): media networks, parks and resorts, studio entertainment, consumer products, and interactive media, …show more content…
The studio entertainment BU produced the film and soundtrack under Walt Disney Pictures and Walt Disney Animation Studios in 2013. Following its success, Frozen is also in being adapted for Broadway (Gamble & Turnipseed, 2014, p. C-333), which is also the responsibility of this BU. Merchandise for the film was in high demand and produced by its consumer products division that ranged from toys and apparel, to books, apps, such as “Frozen Free Fall”, and more. The interactive media BU also created a Frozen extension for its Disney Infinity video game. This merchandise is distributed at Disney retail locations and other stores through licensing, as well as its theme parks and cruise line. Within the parks and resorts division, guests are able to meet the characters of the film at the amusement parks and on its cruise ships, and the company is currently developing a new attraction for the Norway Pavilion in EPCOT called “Frozen Ever After” that is expected to open in May of this year. In addition, the media networks BU promoted the film and its merchandise and even featured Frozen characters in its ABC television show Once Upon a Time in …show more content…
Disney purchased Marvel Comics in 2009 as an intellectual property acquisition, due to its characters and brands being a strategic fit for Disney’s family-oriented brands (Gamble & Turnipseed, 2014, p. C-324). Thus, its characters such as Spiderman, Iron Man, Thor, Captain America, and other superheroes were distributed throughout other Disney businesses, including its theme parks, retail stores, and video game business (Thompson et al., 2016, p. 218). Disney’s studio entertainment BU intends to produce two Marvel films a year, such as Captain American 3 to be released this year (Gamble & Turnipseed, 2014, p. C-324; C-333). Besides films, Marvel related television shows are produced and distributed by the media networks BU, such as ABC’s Agents of S.H.I.E.L.D. From these films and TV shows, an array of merchandise is fashioned and distributed by the consumer products division. This synergy is also transferred to the parks and resorts BU in merchandise and the Hong Kong Disneyland Resort is even expected to construct an Iron Man attraction. Additionally, like Frozen, within the interactive media BU, The Avengers are featured in Disney Interactive’s Infinity 2 video game as well as a social game (Gamble & Turnipseed, 2014, p. C-324;C-333). This cross-business synergy between Disney’s BUs provides a more comprehensive promotion and distribution of Marvel characters and

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