Will acquisitions & expansion in Media Networks affect any other SBU
? Substantiate.
Therefore they should expand in those media networks which will help them to stick with their business philosophy, "timeless family entertainment". If they do that, that will also help them in marketing their business better because marketing is all about doing right things at right time at right place. Hence, expansion/acquisition in Media Networks is very much independent of their fate and will generate more cash and will contribute in increment of the Walt Disney Revenue, if done properly.
If we design the BCG
matrix for the 5 SBU’s of The Walt Disney, Media falls in Star which shows it
has high growth rate and high market share. Since the media comes in the star framework
of BCG Matrix. It is believed that they should make more investment (i.e.
expansion) in the media networks and it will not affect other SBUs of Disney,
In fact it will help them to improve upon their marketing strategies. While
making any decisions related to investment or acquiring in the media networks
they should consider the following factors:
1. They had acquired
ABC Channel but unfortunately there was rift between ABC and Disney due to
Disney's cultural micro-management. So Disney’s work culture and ethics was
quite different from that of ABCs. So they may expand or acquire their media
networks but before doing so, they should make sure that the company can handle
high work pressure as Disney would have to avoid future controversies because
that could affect its business activity.
2. Second thing is they
should not go towards that media which does not have any relations with their
core business. Because if you expand and invest in media which is totally
opposite to your core business, you may not be accepted their which will mount
unnecessary costs and losses and will also affect your core business which you
are known for.
3. Moreover if we see
the revenues generated by Media Networks through year 1996 to 2000, we can
observe that it is continuously growing with average YOY growth of 25.43%,
which is the maximum among all the SBU’s. This gives strong evidence that it
has got potential to not only get cash but also help other SBU to grow or help
them grow by sharing their revenues.
Therefore they should expand in those media networks which will help them to stick with their business philosophy, "timeless family entertainment". If they do that, that will also help them in marketing their business better because marketing is all about doing right things at right time at right place. Hence, expansion/acquisition in Media Networks is very much independent of their fate and will generate more cash and will contribute in increment of the Walt Disney Revenue, if done properly.
Contributed by:-
Amit Gunjan
Section A
Strategic Management
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