Disney Case Study - Diversifcation

Throughout Michael Eisner’s time at the Disney Company he believed corporate synergy was the key to success. By actively encouraging synergy Disney could get the most out of its brand and create value that would greatly contribute to the growth of the company (Case, p.11). Synergy refers to how, by working together, two or more businesses can increase value creation greater than if they were working separately (Goode and Campbell, 1998). How Eisner sourced synergy will be discussed later, but first we must look at the different businesses and industries the Disney Company occupied to get an idea of how synergy might be attempted.
The Disney Company as a whole works within the family entertainment and media industry (Thewaltdisneycompany.com, n.d.), however this does not adequately reflect the scope of diversification undertaken by the company. Disney has five business segments: media networks, studio entertainment, theme parks and resorts, consumer products and Internet and direct marketing (Case, p.18). Below is a table that shows the different industries that each segment competes in and examples of how the Disney Company competes in these industries.
Business Segment Industries How Disney competes in the industry
Media Networks - Kids TV industry
- Television news industry
- Children’s radio
- Radio news industry
- ABC deal gives radio stations
- ABC Television Network
- Radio Disney
- ABC Radio
Studio Entertainment - Kids/family film industry *
- Teen/adult film industry
- Kids TV industry *
- Teen/adult TV industry
- Pop music industry
- Theatre production industry
- Film distribution industry *
- Home video/DVD distribution industry * - Walt Disney Pictures
- Touchstone Pictures
- The Golden Girls
- Touchstone Television
- Hollywood Record Label
- Beauty and the Beast (Broadway)
- Buena Vista Distribution
- Buena Vista Home Entertainment
Theme Park and Resorts - Children’s theme park industry *
- Cruise line industry
- Family

References: Ansoff, H. I. (1957). Strategies for diversification. Harvard business review,35(5), 113-124. Goold, M., & Campbell, A. (1998). Desperately seeking synergy. Harvard Business Review, 76(5), 131-143.Porter, M. E. (1987). From competitive advantage to corporate strategy (Vol. 59). Cambridge, MA: Harvard Business Review. Rukstad, M. G. & Collis, D. (2001). The Walt Disney Company: The Entertainment King. Harvard Business School. Thewaltdisneycompany.com, (n.d.). Company Overview | The Walt Disney Company. [online] Available at: http://thewaltdisneycompany.com/about-disney/company-overview [Accessed 3 Oct. 2014].