Introduction
The Walt Disney Corporation is a global business that offers everyone a variety of entertainment options. It has numerous subsidiaries that cater to various audiences. The Firm announced a strategic reorganization in 2018 and wanted to grow (The Walt Disney Company, 2018). Creating high-quality content, technological innovation, worldwide expansion, and direct-to-consumer distribution were listed as the company’s priorities for future success. The Walt Disney Company decided to diversify because they recognized the profit possibilities and consumer demand for ease. During the strategic reorganization, the Walt Disney Company acquired 20th Century Fox (March 2019). This deal cost them around $71 billion and gave them Fox’s 30% stake in Hulu, raising Disney’s ownership to 60% (Noam, 2019). They introduced Disney+ the same year, and it made around $55 million in its first month (Schickel, 2019).
Critical Thinking Application
When making judgments, critical thinking is a talent that involves considering all available information, conducting research and challenging the reliability of information sources, and spotting fallacious reasoning. To reflect the company’s priorities for future growth, including technological innovation, high-quality content, international expansion, and direct-to-consumer distribution, the executives of the Disney Company strategically reorganized their businesses. They also did this in response to the rapidly shifting media landscapes of the day (Noam, 2019). The firm uses critical thinking techniques to make more informed judgments while reading and analyzing data. They make conclusions and improve understanding using logic, reasoning, and creativity.
Of course, it is essential to distinguish and set apart traditions that demand respect and preservation from those instruments and processes that must be updated regularly in light of changes in the management object and consumer expectations. Every alteration should be seen as an opportunity. In this situation, it should be emphasized that to prevent pattern traps, it is essential to understand why the manager selected this specific course of action and the reasons and conclusions that led to that decision (The Walt Disney Company, 2018). One of the best instances of using critical thinking in managerial strategy is Disney. The company’s operations are highly diverse geographically and in industry sectors. The Walt Disney Corporation is rapidly growing while also increasing productivity, which leads to continued profitability growth (The Walt Disney Company, 2018). Pixar, Marvel, ESPN, Lucasfilm, ABC-International Television, and other companies are among the firms that make up the group.
The Diversification Strategy Analysis
On November 12, 2020, Disney +, a brand-new ad-free streaming service, became life in the US (The Walt Disney Company, 2019). It has ambitions to cover all significant international markets eventually. According to Disney’s Annual Report, the company offers a variety of channels for different user demographics, taking into account their varied interests and needs (The Walt Disney Company, 2019). Disney Junior for the youngest kids, Disney XD for kids between the ages of 6 and 11, ESPN for multimedia sports entertainment, and Freeform are some examples (The Walt Disney Company, 2019). Disney’s broadcasting services include eight independently owned domestic television stations, a domestic network, and television production and distribution businesses (Wasko, 2020). Each corporation can establish a strong foothold in a particular market by concentrating its resources and efforts there. If the growth potential in this area is reached, a shift to diversified manufacturing with a range of product kinds and access to numerous markets will be required.
Disney’s move to rearrange its business sectors and pursue associated diversification was successful. When a business enters a new industry related to its current initiative, this is known as related diversification. When The Walt Disney Company decided to join the digital technology sector and launched ESPN+ and Disney+, they precisely did that. Disney+ has become incredibly popular nowadays, and as of its final quarter in 2020, it has about 74 million subscribers worldwide (Noam, 2019). The corporation had almost 26.5 million members in the United States as of the end of its first fiscal quarter in 2020 (Wasko, 2020). Each function contributed to Disney’s decision to enter a new market and to rearrange its business units strategically.
Conclusions
Disney’s unconnected diversification indicates a financial strategy that involves entering new markets to raise the business’s share price. Acquired are companies active in a variety of industries and markets. Strategic fit is not a primary selection criterion; instead, it is their perceived profitability. This makes it possible to lower portfolio management risks and improve the portfolio matrix. Disney uses critical thinking to assess the necessity of acquiring or developing specific business units in numerous markets, thoroughly evaluating the relevant circumstances, dynamics, prospects, and intertwining of stakeholder interests, even globally. In its report, the company provides assessments of the competitiveness in certain areas, along with risks connected to internal and external variables and agents of influence. It also provides a succinct but clear explanation of the rationale behind its activities in various market sectors. The report’s dynamic financial and balance sheet indicators show that the company’s selected diversification strategy has been successful.
References
Noam, E. M. (2019). Strategy Planning in Media and Information Firms. Managing Media and Digital Organizations, pp. 629–666. Web.
Schickel, R. (2019). The Disney version: The life, times, art and commerce of Walt Disney. Simon & Schuster.
The Walt Disney Company. (2019). Fiscal Year 2019 Annual Financial Report. Web.
The Walt Disney Company. (2018). The Walt Disney Company Announces Strategic Reorganization. The Walt Disney Company. Web.
Wasko, J. (2020). Understanding Disney: The manufacture of fantasy. John Wiley & Sons.