Figure 25. Consumer product revenue of the Walt Disney Company
Vertical
integration
Vertical integration
& Market contracts
Market
contracts
Vertical integration
& Market contracts
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9.1.4 ABC Networks Group
In 1995, Disney mergers and acquisitions ABC Networks Group to expand its
market. Disney knows this media distributer could help Disney to build up its status in
the industry and even take over the market.
The vertical integration in ABC Networks Group become more and more
complete. Firstly, ABC Group plan and produce variety of its own TV program such
as “The Suite Life of Zack & Cody,” and “High School Musical”, etc. Secondly, then
they can market and distribute through their Channel such as Disney Channel or ABC
News. Thirdly, they can even authorize to produce merchandise. As above process,
Disney distribute its product almost from the top to the end.
The result shows that this different integration between Disney and ABC
Networks Group is a right decision because the popularity of Disney Company and
many things related to “Disney”.
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9.2 SIC Code of Walt Disney Cooperation
Below are the business type and SIC code of Disney businesses, which has
spread across quite a few diversified industries as we know today.
Table 26. SIC Code of Walt Disney Cooperation
Business Type Primary SIC Code
Disney Interactive
Media Group
Professional, Scientific, and
Technical Services
7373 – Computer Integrated
Systems Design
Disney Consumer
Products Inc
Administrative and Support and
Waste Management and
Remediation Services
7389 – Business Services, Not
Elsewhere Classified
Walt Disney Parks
& Resorts Arts, Entertainment, and Recreation 7996 – Amusement Parks
Walt Disney
Animation Studios Information
7812 – Motion Picture and Video
Tape Production
Disney-ABC
Networks Group Information
4841 – Cable and other Pay
Television Services
9.3 Diversification of The Walt Disney Company
One of the main strength of The Walt Disney Company is its diversification
strategy. The Walt Disney Company started as a studio, then after successful years of
movie production the company entered the amusement park industry with the opening
of Walt Disney World. Later the company entered the Television industry with Disney
Channel.
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The corporation managed to spread its original creations through non-related
industries such as amusement parks and on a smaller extent to television. To make it
clear, cinema and television industries can be related in some aspects but still remain
mainly non-related industries as only a small part of television programs is coming
from the cinema industry. Television industry can be considered as a small additional
distribution channel for the cinema industry. Finally, television and cinema industry
are non-related as they don’t need the other.
Repartition of 2013 global revenue
Figure 26. Repartition of 2013 Global revenue
The company is present at a smaller scale in two more industries, a non-related
one Digital Industry (Interactive Division) and a related one Consumer products.
Disney Interactive contains video games and websites businesses. Disney Consumer
products is simply the merchandising of Disney’s Characters and stories.
The conglomerate grew phenomenally in each sector by acquiring and creating
strategic businesses inside an industry.
In the movie production industry, it is now one of the “Big Six”, the biggest
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studios in Hollywood. In the amusement park industry Disney is the indisputable
leader. And in the television networks industry it owns three of the best channels by
audience size, ABC, ESPN and Disney Channel.
The diversification strategy seems to be a long-term win for the group as having
revenue streams from independent industries dilutes risks.
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Chapter10 Diamond Analysis
10.1 Factor endowments: Disney parks and resorts USA