Corporate Strategy/Diversification – Coursework Example
Corporate strategy/Diversification Disney in the hands of Walt and Eisner had resource sharing both at primary and secondary levels. The primary level involved basic diversification characterized by the firm generating a greater chunk of its income from the primary business that was film production. The income generated was then shared between Disney and the distributor, RKO. In addition, the creation of Walt Disney Music Company to control music copyrights as well as to search for and recruit new talents was another program that came to life due to primary resource sharing. This helped in cutting the costs on talent search as Disney was able to nurture and develop talents through this new company.
Secondary resource sharing at Disney became prominent after Eisner became the head of Disney. With the introduction of theme parks, Disney had achieved considerable high-level resource diversification. The company no longer relied solely on film production for revenues, even though film was doing well with the opening of Vista Distribution Company, the parks played a massive role in raising a substantial amount of revenue that was used to expand Disney, eventually leading to the acquisition of ABC.
The first four years of Eisner as the head of Disney were marked by intensive transformation of the running of the business. Rukstad and Collins (2009) points out that Eisner rolled out a program that ensured shareholders invested more in the business with an assurance of substantial increase in revenue for the shares. This became the basis of the progress in terms of development and product improvement that was witnessed in the years that followed.
To supplement the above investment strategy, Eisner introduced the culture of resource diversification and invested on other businesses other than film production. He saw the development of theme parks and the maximization of its profitability, revitalized Television and movie that resulted in increased viewership and ensured there was proper coordination among the business units that were under Disney (Rukstad and Collins, 2009). This strategy paid well as Disney was able to survive massive economic obstacles that threatened Disney with a complete takeover.
Rukstad, M.G. & Collins, D., (2009). The Walt Disney Company: The entertainment King.