Question 1. What is Disney's corporate strategy?
Corporate strategy of a firm describes the scope of a company, i.e., where the firm competes. A close analysis of Walt Disney's history reveals that its corporate-level strategy can be discussed as vertical scope( integration), geographical scope( multi-nationality), and product scope( diversification).
Apparently, Walt Disney's employs a fine mix of these three 'scopes' to stay ahead of the competitors. The intense diversification and international expansion have allowed the company to create its presence and brand image across the world. It has derived benefits regarding economies of scale and pepped its competitive advantage in the industry. Disney has successfully achieved operational efficiency by sharing marketing and technical resources among four primary businesses. Financial risks have been minimized as the initial cost is shared with many outside participants. Disney has entailed corporate synergy by initiatives as 'Disney Dimensions'; it has boosted up company's revenues through cross-promotion.
Nevertheless, there have been times of turmoil and failure, but Disney has overcome negativities well in time and has always come up with innovative solutions.
Question 2. Has Disney diversified too far in recent years?
Disney's recent success is primary because of Eisner's rejuvenation drive starting in 1984. He expanded into new businesses, increased the net income, and maximized shareholders' wealth. As a result, value creation by way of diversification notable enhanced the net income to $445 million in 1987. Diversification continued, and different lines as Media Networks, Studio Entertainment, Resorts, and Theme Parks were added in 2000.
It is clear that expansion drive has been going on since long back, and Disney has not diversified too far in recent years. There are still untapped areas and markets, but it should not take undue risks with costs and expansion.
References
Jeffries, Justin. "The Walt Disney Company: The Entertainment King." 2010.
