Disney
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RSM 1301: Fundamentals of Strategic Management, Fall 2014
Case: Disney – Entertainment King
Case Reflection Questions
These questions are designed to assist you in probing your understanding of how the concepts and frameworks that we have discussed in class are applied.
Read over your notes from the case discussion and try to answer the following questions. Be sure to WRITE DOWN your response to these questions before looking at the responses that I have provided:
1. Can you classify the following pairs of businesses (all owned by Walt Disney) into horizontally or vertically related and, in your own words, explain why you have classified them this way.
a. Animated movie production & live action theatre production
b. Animated movie production & cable TV (The Disney Channel)
c. Disney cruises & theme parks
2. Can you explain in your own words how Walt Disney’s diversification into the hotel business satisfies the better-off test?
Challenge question: Do you think this increase in corporate scope also passes the ownership test? Carefully explain why or why not. (Hint: it’s not enough just to say “because they chose to own the hotels!”)
3. One of Disney’s more controversial diversification moves involved the purchase of the NHL hockey team, The Mighty Ducks. Identify likely sources of the following costs and benefits of this increase in corporate scope (all relevant to the better-off test):
a. Economies of scope / cost reductions
b. Cross-selling benefits / Increased willingness-to-pay
c. Diseconomies of scope
Responses to Case Reflection Questions
Below are my thoughts on the case reflection questions. DO NOT READ THESE until you have considered and written down your own response to the questions!
1. Can you classify the following pairs of businesses (all owned by Walt Disney) into horizontally or vertically related and, in your own words, explain why you...
Case: Disney – Entertainment King
Case Reflection Questions
These questions are designed to assist you in probing your understanding of how the concepts and frameworks that we have discussed in class are applied.
Read over your notes from the case discussion and try to answer the following questions. Be sure to WRITE DOWN your response to these questions before looking at the responses that I have provided:
1. Can you classify the following pairs of businesses (all owned by Walt Disney) into horizontally or vertically related and, in your own words, explain why you have classified them this way.
a. Animated movie production & live action theatre production
b. Animated movie production & cable TV (The Disney Channel)
c. Disney cruises & theme parks
2. Can you explain in your own words how Walt Disney’s diversification into the hotel business satisfies the better-off test?
Challenge question: Do you think this increase in corporate scope also passes the ownership test? Carefully explain why or why not. (Hint: it’s not enough just to say “because they chose to own the hotels!”)
3. One of Disney’s more controversial diversification moves involved the purchase of the NHL hockey team, The Mighty Ducks. Identify likely sources of the following costs and benefits of this increase in corporate scope (all relevant to the better-off test):
a. Economies of scope / cost reductions
b. Cross-selling benefits / Increased willingness-to-pay
c. Diseconomies of scope
Responses to Case Reflection Questions
Below are my thoughts on the case reflection questions. DO NOT READ THESE until you have considered and written down your own response to the questions!
1. Can you classify the following pairs of businesses (all owned by Walt Disney) into horizontally or vertically related and, in your own words, explain why you...