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Evaluating the organizational structure of the walt disney company

Learning Objectives After reading this chapter, you should be able to understand and articulate answers to the following questions: Why might a firm concentrate on a single industry?

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What is vertical integration and what benefits can it provide? What are the two types of diversification and when should they be used? Why and how might a firm retrench or restructure? What is portfolio planning and why is it useful? Walt Disney remains a worldwide icon five decades after his death.

The Walt Disney Company’s Corporate Structure: Advantages & Disadvantages, Recommendations

Wikimedia Commons — public domain. Although Walt Disney was a visionary, even he would have struggled to imagine such enormous numbers when his company was created. The fledgling company gained momentum in 1928 when a character was invented that still plays a central role for Disney today—Mickey Mouse.

Disney expanded beyond short cartoons to make its first feature film, Snow White and the Seven Dwarves, in 1937.

Following a string of legendary films such as Pinocchio 1940Fantasia 1940Bambi 1942and Cinderella 1950Walt Disney began to diversify his empire.

His company developed a television series for the American Broadcasting Company ABC in 1954 and opened the Disneyland theme park in 1955. One of the hosts of that episode was Ronald Reagan, who twenty-five years later became president of the United States. A larger theme park, Walt Disney World, was opened in Orlando in 1971.

Roy Disney died just two months after Disney World opened; his brother Walt had passed in 1966 while planning the creation of the Orlando facility. The Walt Disney Company began a series of acquisitions in 1993 with the purchase of movie studio Miramax Pictures. Two other important acquisitions were made during the following decade. In addition to featuring these characters in movies, Disney could build attractions around them within its theme parks. It was active in four key industries.

Walt Disney Company’s Organizational Structure for Synergistic Diversification

A park in Shanghai, China, is slated to open by 2016. Merchandise licensing was responsible for 7 percent of revenue. The remaining 2 percent of revenues were derived from interactive online technologies. Much of this revenue was derived from Playdom, an online gaming company that Disney acquired in 2010. Pixar executives were justifiably proud that they made successful movies that most studios would view as quirky and too off-the-wall.

Disney executives, however, seemed to be adopting a much different approach to moviemaking. The big picture was definitely unclear.

When dealing with corporate-level strategy, executives seek answers to a key question: In what industry or industries should our firm compete? The executives in charge of a firm such as The Walt Disney Company must decide whether to remain within their present domains or venture into new ones.

In contrast, many firms never expand beyond their initial choice of industry. A collision of creativity and cash. This is a derivative of Mastering Strategic Management by a publisher who has requested that they and the original author not receive attribution, which was originally released and is used under CC BY-NC-SA.