Assignment :- 3

Introduction :The Walt Disney Corporation is a nationwide multi-varied entertainment company which is a household name to millions of people throughout North America. Michael Eisner who is Disney's chairman and chief executive officer knows that his company will have to diversify in order to meet his targeted growth rate of 20% For over 85 years, The Walt Disney Company has been the preeminent name in the field of family entertainment; the Disney name has symbolized creativity, innovation, trust, decency, optimism and quality. Disney, together with its subsidiaries and affiliates, is a leading diversified international family entertainment and media enterprise with five business segments: Media Networks Walt Disney Television International (India), Disney Media Distribution (Asia Pacific), ESPN Disney Interactive Media Group - Disney Interactive Studios; Disney Online; Disney Online Studios; Disney Mobile; Playdom; Studio Entertainment - Walt Disney Studios Motion Picture International, Walt Disney Studios Home Entertainment, Disney Music Group, Disney Theatrical Group Disney Consumer Products Consumer Products, Publishing Parks and Resorts - Disney Destinations International

Diversification :Diversification is a form of corporate strategy for a company. It seeks to increase profitability through greater sales volume obtained from new products and new markets. Diversification can occur either at the business unit level or at the corporate level. At the business unit level, it is most likely to expand into a new segment of an industry that the business is already in. At the corporate level, it is generally very interesting entering a promising business outside of the scope of the existing business unit. Diversification is part of the four main growth strategies defined by the Product/Market Ansoff matrix[1]:

Ansoff pointed out that a diversification strategy stands apart from the other three strategies. The first three strategies are usually pursued with the same technical, financial, and merchandising resources used for the original product line, whereas diversification usually requires a company to acquire new skills, new techniques and new facilities.

Related Diversification Strategy of adding related or similar product/service lines to existing core business, either through acquisition of competitors or through internal development of new products/services Unrelated Diversification It is when a business adds new, or unrelated, product lines or markets. For example, the same phone company might decide to go into the television business or into the radio business. This is unrelated diversification: there is no direct fit with the existing business. Firms pursue this strategy for several reasons: Continue to grow after a core business has matured or started to decline. To reduce cyclical fluctuations in sales revenues and cash flows.

RELATED BUSINESS DIVERSIFICATION

Distant-Related-Business-Diversification Less than 70% of firm revenues come from a single business, and different businesses share only a few links and common attributes or different links and common attributes (Hit, Ireland & Hoskisson 2004; Lynch 2006). The Walt Disney Company, which started in 1923 as a studio animated company, has over time grown to become a mega-entertainment empire comprising four diversified business segments: Studio Entertainment, Parks and Resorts, Consumer Products, and Media Networks (Disney 2006). Each segment consists of integrated, well-connected businesses that operate in concert to maximise exposure and growth worldwide

Furthermore, Disneys diversification strategy is driven, amongst others, by financial goals. The company aims to maximise earnings and cash flow, and to allocate capital profitability toward growth initiatives that will drive long-term shareholder value. Having developed a strong brand image over many years, the company is poised to diversify its operations and products to hedge against decreasing sales in product lines. The company not only diversified its product portfolio into home video, film, merchandise, radio broadcasting, network television and (delete in)theme parks, it has also effectively globally diversified its operations into Asia and Europe. In addition, Disneys decision to diversify into France (Disney 2006) with the theme park may, among other reasons, have been prompted by economies of scale. Economies of scale should result from the new theme park, because much of the costs associated with planning a theme park have already been incurred. Also, the sales of Disney toys will increase, allowing for additional economies of scale in production.

Value Chain Analysis :Value Chain Analysis describes the activities that take place in a business and relates them to an analysis of the competitive strength of the business. Influential work by Michael Porter suggested that the activities of a business could be grouped under two headings: (1) Primary Activities - those that are directly concerned with creating and delivering a product (e.g. component assembly); and (2) Support Activities, which whilst they are not directly involved in production, may increase effectiveness or efficiency (e.g. human resource management). It is rare for a business to undertake all primary and support activities. Value Chain Analysis is one way of identifying which activities are best undertaken by a business and which are best provided by others ("out sourced").

PRIMARY ACTIVITIES OF WALT DISNEY :1. Supply Chain Activity Of Walt Disney : Disney BU supply chains depend on different core processes and drivers to respond to differing customer and guest requirements Cursory review shows sizeable assets are deployed to support Disney

North American merchandise supply chain activities More than 20 warehouses owned or operating on behalf of Disney More than 900 retail locations across the stores, parks, and resorts European operations depend on significantly higher numbers of warehouses and third-party providers than seen in North America The majority of costs and assets are in Disney Consumer Products, Parks and Resorts, and Buena Vista Home Entertainment An overview of activities and suppliers across BUs indicate that there are more opportunities for cross-BU synergy than are currently in operation Most supply chain activities are managed independently Many contracts are negotiated and managed separately

2.) Operations :The Walt Disney Company is a diversified worldwide entertainment company with operations in four major business segments: Studio Entertainment, Parks and Resorts, Media Networks and Consumer Products. The Company's Strategic Sourcing and Procurement organization works with all our Business Units and their Suppliers across the globe to establish the best value for The Walt Disney Company.

Media Networks Media Networks comprise a vast array of broadcast, cable, radio, publishing and digital businesses across two divisions the Disney/ABC Television Group and ESPN Inc. In addition to content development and distribution functions, the segment includes supporting headquarters, communications, digital media, distribution, marketing, research and sales groups.

Parks and Resorts When Walt Disney opened Disneyland on July 17, 1955, he created a unique destination built around storytelling and immersive experiences, ushering in a new era of family entertainment. More than 55 years later, Walt Disney Parks and Resorts (WDP&R) has grown into one of the worlds leading providers of family travel and leisure experiences, providing millions of guests each year with the chance to spend time with their families and friends making memories that will last forever.

The Walt Disney Studios For more than 85 years, The Walt Disney Studios has been the foundation on which The Walt Disney Company was built. Today, the Studio brings quality movies, music and stage plays to consumers throughout the world. Feature films are released under the following banners: Disney, including Walt Disney Animation Studios and Pixar Animation Studios; Disneynature; Marvel Studios; and Touchstone Pictures, the banner under which live-action films from DreamWorks Studios are distributed.

Disney Consumer Products Disney Consumer Products (DCP) is the business segment of The Walt Disney Company (NYSE:DIS) and its affiliates that extends the Disney brand to merchandise ranging from apparel, toys, home dcor and books and magazines to foods and beverages, stationery, electronics and fine art

Disney Interactive Founded in 2008, Disney Interactive entertains kids, families and Disney enthusiasts everywhere with world class products that push the boundaries of technology and imagination. Disney Interative creates high-quality interactive entertainment across all digital media platforms, including blockbuster mobile, social and console games, online virtual worlds, and #1-ranked web destinations Disney.com and the Moms and Family network of websites.

3) Marketing And Sales Of Walt Disney :Target Market Strategies Demonstrating its leadership in marketing to reach kids and families, The Walt Disney Company unveiled the first national wireless phone service in 2006, known as "Disney MobileSM." The phone used GPS capabilities to allow parents to control who their child is communicating with and to monitor where she is. This is part of Disney's strategy to be relevant to contemporary family lifestyles. Disney also continues to appeal to teens and their parents by staying current with digital gaming and social media opportunities, as by its acquisition of online social gaming leader "Playdom Inc."

International Outreach Strategies According to "DEMC," a small-business strategist, Disney recognizes that many people do not have the opportunity to travel to the U.S. to visit Walt Disney World or Disneyland. As a result, Disney developed theme parks around the globe to capture the market, adapting them to local cultures. They include Disneyland Paris, Tokyo Disney, and Hong Kong Disneyland. With worldwide expansion, Disney aims to increase its marketplace and expand its brand.

Advertising and Promotional Strategies Disney's ownership of media networks such as "ABC," "Disney Channel," and "ESPN" is a strategy the company is using to market its brand to Americans. This includes a systematic approach to television advertising, as well as radio commercials, print, outdoor advertising, and mobile initiatives, promoting discounts on resorts, and family packages. To reach teenagers, Disney launched "advergaming," which puts ad messages in online and video games. The goal is to reach kids directly and encourage them to urge their parents to visit a Disney park for a family experience.

Innovation as a Marketing Strategy As part of its marketing strategy, Disney believes in innovation to stay ahead of the competition and build business. With rapid advances in technology, the traditional passive television audience is in transition, no longer captive to primetime scheduling on major networks. According to "eMarketer," by 2011, 86 percent of Internet users in the U.S. will be downloading video content. Disney's strategy is to connect with kids directly via storytelling utilizing multiple technologies.