Question

What is Walt Disney’s corporate (i.e., diversification) strategy? You must identify all types of diversification (e.g., vertical and/or horizontal integration, and related and/or unrelated diversification) Provide evidence to support your answer.

Answer 1

Solution:

Walt Disney is one of those companies which has diversified their business perfectly by entering into multiple industries with their brand name. Walt Disney was primarily into the manufacturing of their kindergarten and kids' products. As Walt Disney gained popularity the company diversified its portfolio into multiple different industries by developing products to appeal to their existing consumers as well as acquiring new consumers.

Walt Disney Implemented a theme park where kids could come and spend their time. The theme park is an example of verticle integration where they are developing the facility in the form of a theme park to ensure that their products of Disney are used in this theme park and they can as well introduce their new products through their theme parks.

Walt Disney introduced its movie production house and primarily decided to produce a movie that appeals to young people. This is another example of diversification where there are getting into horizontal diversification by taking the concept from their primary business to enter into the movie production house. Walt Disney also has its own merchandise store which helps them generate additional revenue because of the brand equity they hold in their customer's perspective.

Walt Disney has been involved actively in dealing with businesses that are not directly related to their business for the sake of diversifying their business and ensuring that they are holding their strong withhold on the other businesses as well.

The source of this information can be found on the official Walt Disney website in their annual reports.