BUS 400 - Case Disney PDF

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Professor Ratcliffe BUS-400 Disney Case Memo The better-off test could help determine in which markets Disney still maintains a competitive presence while using their corporate strategy. This test helps evaluate if the presence of the corporation in a given market will improve the total competitive advantage of all of Disney’s business units over and above what they could achieve on their own. Disney expanded to other markets when they first entered the amusement park industry by opening Disneyland, then when they entered the movie industry and created their own animated films, and later on moving to merchandise, online streaming, collaborations with big brands and more. By Disney entering to all of these different markets, the value of the Disney brand grew dramatically. Entering each industry added to the experience of Disney in which you could go to a theme park, watch a movie, stream at home, or buy toys all with the most famous fictional characters in the world. The ownership test could be applied first when Disney bought CapitalCitiesABC and later on when they acquired Pixar studios. Both of these acquisitions provided Disney with a massive competitive advantage. By purchasing CapitalCitiesABC they acquired the ABC television network, ESPN, and other radio and tv shows. These networks diversified Disney’s content production and made them one of the biggest if not the biggest media content producer in the world. As proof that acquisition was the correct choice, Disney first had a deal with Pixar in which they received about 60% of a movie’s profit, by acquiring the company, they added many famous animated characters to the Disney brand such as Toy Story. Another example would be the acquisition of Lucasfilm. Adding Star Wars, which contained franchise-worthy characters helped Disney enter into many different markets and added overall value to the company. Later on, Disney expanded their theme parks to Paris, Hong Kong, Shanghai, and opened more parks in the United States. The presence of Disney in all of these other geographic markets improved their competitive advantage as a whole since it made the brand a global one. By having theme parks all around the world, more people from more countries can visit the parks and enjoy the Disney experience. International revenues consisted 27% of Disney’s total revenue by 2015. Other acquisitions that increased Disney’s value because they owned that certain company was the acquisition of India’s top television channel. Entering all these geographic markets increased the global recognition of the Disney brand....