Disney’s ongoing success, which has a significant history, can be attributed to the company’s expertise in diversification, which accumulates value. The strategies that contribute to Disney’s current state as an industry leader were first implemented by current CEO Michael Eisner beginning as early as 1984 (Rukstad et al., 2009). These strategies can be summarized into three vital components: horizontal, geographic expansion, and vertical integration. Horizontal expansion refers to the accumulation of company instruments such as facilities, tools, and other assets. Geographic expansion accounts for Disney becoming present in more cities in the U.S. and later even in other countries. Vertical integration is a process in which operations stages that two or more separate firms usually handle become combined within one company’s operational process.
These elements enhanced Disney’s influence as an industry leader in a number of markets but were only possible after prior motions by Eisner increased profits substantially. He was able to increase the value and earnings of the company through the revitalization of older tv shows and films, maximizing theme park profits, management of business units, and expansion into new markets, regions, and populations. The expansion is likely Disney’s most prominent effort that led to the company’s current state as an industry leader and giant. The expansion accounted not only for the creation of more stores or theme parks but for the emergence of totally new markets and the sales of new products and services.
Eisner’s early strategy included maximizing and maintaining shareholder wealth, often through revenue growth goals and stakeholder equity. His own target for Disney at the time was to improve and manufacture the Disney brand without sacrificing the firm’s corporate values. These include quality, creativity, teamwork, and entrepreneurship. Though there were initial concerns that new managers such as Eisner would be too unfamiliar with the company culture and heritage, Esiner was able to overcome these initial suspicions. His initial steps included the aforementioned strategies of utilizing older properties, increasing the profitability of Disney facilities, and expanding into other markets.
This often included the increased production of goods, which are fundamental components of Disney’s operations to this day. Within the firm itself, Eisner achieved this through a process that was labeled ‘managing creativity. Essentially, Eisner would facilitate tension between the financial and creative units of the firm, with both sectors working hard to create market positions. Eisner demanded what could be seen as contradictory results, with creative teams being encouraged to create innovative and expansive works. On the other hand, the financial sector would be asked to deliver strategic and well-structured objectives. This caused certain disagreements but also compromises that frequently allowed for both innovative work and efficient use of Disney’s capital.
Disney’s most recent strategies in diversifying its presence within a number of markets are most likely impacted by its reach into non-American markets. While the sales of Disney products, films, and other media within international settings are nothing new, the firm has recently implemented productions with a focus on media creation in non-American settings. This can be seen in tv shows, films, animation, and other properties that are led by collectives or individuals not working directly under Disney’s leadership teams but similarly guided by their principles and financial investment. This is a large step in Disney’s diversification efforts as it allows for a greater variety of content as well as an increase in its overall quantity.
Reference
Rukstad, M. G., Collis, D., & Levine, T. (2009). The Walt Disney Company: The entertainment king. Harvard Business School. Web.