Why Has Disney Been So Successful for So Long?

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Disney diversified too far in recent years?

Disney has not diversified too far in recent years. Eisner understood that the key for success was/is the corporate synergy. Although “synergy” is now used as a buzzword, its core definition and concept is the most viable path for growth. If Eisner was to see his goal of maximizing shareholders wealth by through annual revenue growth, he had to diversify. I know that corporate synergy has a limit, but by establishing their new ventures and acquisitions has allowed Disney to grow in areas that would not have been possible due to cost restraints and inability with barrier to entries. Companies such as ABC, and Euro Disney. Disney has been able to use diversifying as a way to create synergy.

Eisner created a team that was from all the different companies that Disney owned. It consisted of the senior executives and was called Disney Dimensions. It was described by Eisner as a synergy boot camp. This diversification has created revenues through cross-promotions. Disney has teamed up with licensing partners to help promote the movies with toys and products. These merchandise partnerships were even more crucial in Europe and Japan once the theme parks were opened and established. Disney has diversified into TV networks, hotels, cruise ships, ESPN Zones, DisneyQuest multistory facilities, and children retreats. These examples has allowed Disney to tap into markets that will help increase revenue.

Diversification with synergy will also help drive down cost. This has been shown true with the TV networks and film production companies they have acquired. They are able to use the resources from both companies that would usually have to be outsourced and drive cost up. They are also able to share ideas and move products from inception to completed stage in shorter time by reducing the amount of outside and 3rd party support on projects. The issue is not always that Disney has diversified to far, but in the wrong areas. This is where financial problems can be found when synergy cannot be developed.

Sources Used:

Hill, Bob. "Walt Disney’s 8 Secrets to Success." Business Brief Walt Disneys 8 Secrets to Success Comments. N.p., n.d. Web. 13 Apr. 2017.

Economy, Peter. "4 Powerful Secrets to Disneyland’s Success at 60." Inc.com. Inc., 22 May 2015. Web. 13 Apr. 2017.

Pomerantz, Dorothy. "Five Lessons In Success From Disney’s $40 Million CEO." Forbes. Forbes Magazine, 23 Jan. 2013. Web. 13 Apr. 2017.

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