The Walt Disney Company: The Entertainment King
The Walt Disney Company: The Entertainment King
Why has Disney been successful for so long?
Disney has become a marketing goliath and the #1 entertainment company in the US. They have been able to develop a creativity-driven philosophy that over time was tempered by financial responsibility and that benefitted from powerful synergies between its divisions. From the very beginning, Disney has been synonymous with innovation within the children’s entertainment industry, from their introduction of animations with synchronized audio, full-length animated feature films and then later into theme parks and on-ice and Broadway shows. One important element of Disney’s success was the extent to which they integrated and expanded into different business areas, far beyond simple licensing deals and agreements with distributors. Examples of this include:
Horizontal Integration: successfully diversified into different movie genres by acquiring several production companies (helping them reach wider audiences); creation of Disney theme parks (a huge success in terms of profit); music production; book publishing; consumer merchandising (retail outlets); family-oriented cruise packages and venues and educational retreats and more.
Vertical Integration: created Buena Vista Distribution in 1953 (saving one-third of film gross revenues); in-house talent development; creating the Disney channel to increase brand exposure on TV; brought theme park support services, such as a travel agency, in-house (to be in control of more tourist dollars); and acquired TV monolith ABC – a risky downstream move that offered them direct links to their consumers, and advertising revenues.
Geographic Diversification: moved into the EU and Japan with theme parks; international distribution of movies and re-releasing of classic Disney movies; cruises; Disney-owned venues (ESPN and others) in a wider range of locations; travelling ice shows, etc.
Overall, the internalization of businesses that were
Why has Disney been successful for so long?
Disney has become a marketing goliath and the #1 entertainment company in the US. They have been able to develop a creativity-driven philosophy that over time was tempered by financial responsibility and that benefitted from powerful synergies between its divisions. From the very beginning, Disney has been synonymous with innovation within the children’s entertainment industry, from their introduction of animations with synchronized audio, full-length animated feature films and then later into theme parks and on-ice and Broadway shows. One important element of Disney’s success was the extent to which they integrated and expanded into different business areas, far beyond simple licensing deals and agreements with distributors. Examples of this include:
Horizontal Integration: successfully diversified into different movie genres by acquiring several production companies (helping them reach wider audiences); creation of Disney theme parks (a huge success in terms of profit); music production; book publishing; consumer merchandising (retail outlets); family-oriented cruise packages and venues and educational retreats and more.
Vertical Integration: created Buena Vista Distribution in 1953 (saving one-third of film gross revenues); in-house talent development; creating the Disney channel to increase brand exposure on TV; brought theme park support services, such as a travel agency, in-house (to be in control of more tourist dollars); and acquired TV monolith ABC – a risky downstream move that offered them direct links to their consumers, and advertising revenues.
Geographic Diversification: moved into the EU and Japan with theme parks; international distribution of movies and re-releasing of classic Disney movies; cruises; Disney-owned venues (ESPN and others) in a wider range of locations; travelling ice shows, etc.
Overall, the internalization of businesses that were