Critical Thinking in Disney’s Diversification Strategy Analysis

1 Module One Assignment Lindsay Largeman Southern New Hampshire University BUS 225: Critical Business Skills for Success Dr. Hailey Bodwell October 29, 2023

2 Module One Assignment Application Critical thinking is extremely important when making business decisions. Critical thinking is also a significant role in Disney's diversification plan. Critical thinking allows one to perform problem-solving and decision-making more effectively; it aids one in making informed rational decisions rather than making decisions based on personal opinions or emotions. Critical thinking improves problem-solving skills; critical thinking also aids business leaders in identifying problems and creating solutions that make problems manageable for employees. Critical thinking also aids business leaders in acting in an ethical manner. Critical thinkers are able to make rational decisions, therefore, they tend to take their time when analyzing a situation and weigh the good and bad outcomes that the business may receive from a decision made. Critical thinking is something that is vital for making business decisions. Critical thinking plays a major role in Disney's diversification planning; it enhances one's problem-solving skills, aids one in assessing risks, aids one in making ethical decisions, and aids in facilitating long-term planning. Disney can use critical thinking to make informed decisions that aid in the rapid growth of the business while pleasing customers on a daily basis. Analysis The Walt Disney Company, commonly known as Disney is a global entertainment company founded by Walt Disney and Roy O. Dinsey in 1923 (About the Walt Disney Company). The mission of the Walt Disney Company is to entertain, inform, and inspire people around the globe through the power of unparalleled storytelling, reflecting the iconic brands,

3 creative minds, and innovative technologies that make ours the world’s premier entertainment company. Disney's diversification strategy expands its business operations across various sectors to minimize risk and increase profitability. Disney achieves this through media networks, parks and resorts, studio entertainment, consumer products, and interactive media (The Walt Disney Company, 2023). Media networks are used to broadcast across television, radio, and TV streaming networks. Parks and resorts for DisneyWorld are located across the globe creating a fun environment for everyone to visit. By using this diversification strategy, Disney is able to promote its brand across multiple platforms. By doing so, Disney increases profits. Diversifying a business can be a risky decision to make. Disney chose to diversify in 1929 by establishing the Mickey Mouse Club and ventured into music, TV shows, and war-era films in the 1940s and 50s; in 1955, Disney took a risk by branching out into real estate with the opening of the first Disneyland (Schneider, 2023). Disney later even released a cruise ship line. Disney used critical thinking in its decision to diversify and make a rational decision. Disney decided to diversify because it saw a potential for increased profits. “Related diversification occurs when a firm moves into a new industry that has similarities with the firm’s existing industry or business lines” (Soomo, 2020). Disney’s decision to diversify has solidified its sustainability, as the mission statement claims the use of innovative technology and its brand has allowed it to remain a world leader in entertainment (Schneider, 2023). Conclusion Disney relies heavily on logic, evidence, and arguments in its decision-making process. Disney uses logic to ensure that each and every decision made is rational and follows in line with

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4 its business strategy. Disney's decision to acquire Pixar was due to Disney believing it would strengthen the animation department and increase its market share (Hay, 2018, par. 1). Disney uses evidence to support decisions made and to aid in the prediction of future outcomes. Disney uses arguments to debate options and convince stakeholders there are good things about particular decisions it makes and how they aid in business growth. These components of the decision-making process aid Disney in ensuring they are making rational, informed, and beneficial decisions for the company. In conclusion, Disney's decision to diversify was a successful decision. Disney had significant growth stemming from diversifying its assets. After diversifying, Disney began generating more revenue from merchandising, hotels, and international holdings. Within five years of diversifying, the company's revenues more than doubled from $1.6 billion to $3.49 billion (Schneider, 2023).

5 References Bruce. (2018, June 27). The Walt Disney Company Announces Strategic Reorganization . The Walt Disney Company. https://thewaltdisneycompany.com/walt-disney-company- announces-strategic-reorganization/ Hay, H. (2018, April 27). Disney to acquire Pixar . The Walt Disney Company. https://thewaltdisneycompany.com/disney-to-acquire-pixar/ Schneider, A. (2023, April 24). Disney and the importance of financial diversification . Vyzer. https://vyzer.co/blog/disney-and-the-importance-of-financial- diversification#:~:text=Disney%20initiated%20its%20diversification%20strategy,opening %20of%20the%20first%20Disneyland. Soomo Learning. (2020). Critical business skills for success . https://www.webtexts.com

Module 1 Assignment

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