Type Of Diversification And Value Samples †MyAssignmenthelp.com

Question: Discuss about the Type Of Diversification And Value. Answer: Using a business publication (Forbes, Wall Street Journal, Business Week, Fortune, FastCompany) article, find a company that has expanded by diversification. Describe the type of diversification and how the diversification created value. Evaluate how successful you think the diversification will be in future (5 or 10 yrs., for instance). What issues or challenges is the diversification likely to cause? Disney is a power house and of the largest organizations in the world. This multinational company was established by the famous visionary Walt Disney in the year 1923. Walt Disney is known to be a risk taker, as an entrepreneur he had a wide vision for his company. One of the main strategies of the company is to expand with diversification. Form the inception of the establishment as an animation company Walt Disney had versioned to open a theme park. His idea was so strong and powerful in his mind that he had invested almost everything towards the set-up of the first theme park in 1955. At that point of time Disney had invested almost 17 million dollars on the project that was constructed over an area of 160 acres. There are almost 14 million visitors who spend close to $3 billion in Disneyland (Yang, Narayanan De Carolis, 2014). This is a case of horizontal diversification where an animation company changed the path to provide the existing consumers of the service to a new and unrelated service. There is media group, a clothing line, and a line of stationery items, theme parks and many more. In next five years the company is going to earn more and more turnover generating more cash flow into the business as Disney merchandise has gained immense popularity among the young kids. This will only make way for the company to invest in more in diversification opportunities in order to expand the business the issues or challenges faced by the diversification can be of many types: criticism of the brand is one for constantly diversifying in various sectors for the purpose of expansion. And for a company like Disney criticism may effect on the goodwill which is considered as an assets for the company. Managing multiple units in diversification can be a challenge for the parent company. Selection and maintaining the br and name for unrelated products also becomes a problem in the long run (forbes.com, 2017). References: Disney Has Ample Opportunity For Emerging Markets Expansion. (2017).forbes.com. Retrieved 6 September 2017, from https://www.forbes.com/sites/greatspeculations/2012/09/26/disney-has-ample-opportunity-for-emerging-markets-expansion/#52c1aa773f6c Yang, Y., Narayanan, V. K., De Carolis, D. M. (2014). The relationship between portfolio diversification and firm value: The evidence from corporate venture capital activity.Strategic Management Journal,35(13), 1993-2011.