Since Walt Disney Company is so diversified they have adopted a cohesive management approach and strive for coordination rather than competition between all businesses. They are a company that has choosen a horizontal approach when it comes to the scope of the firm. They have grown the company through a series of mergers and acquisitions. When Walt Disney first started they were just an animation company. They have acquired various firms to help them distribute their product reach a broader audience. The various firms they have acquired have allowed them to increase the scale of their operations. They have expanded their geographic coverage. For example by acquiring UTV they have been able to expand the company internationally. By purchasing Playdom the company has been able to expand the business into social gaming which is a new product category that they never had a presence in before. When the Walt Disney Company bought Pixar they were able to get quick access to new technology that would have normally taken a long time to develop. The firm also used some backwards and forward vertical integration strategies. They control the distribution of their product through the ownership of film production and distribution companies. They also own some cable networks and television stations.
They also look at the company as a whole entity when deciding how to allocate capital. At the investor’s conference in May 2012 CEO Bob Iger discussed Disney’s approach to allocating capital.
“Well first of all, it begins with an overall evaluation of how we deploy capital across the company, so if the theme park group comes to us with a proposal to renovate Fantasyland in Florida, we obviously look at it in a very discrete fashion, meaning what are the likely returns on that specific investment. But we look at it against the whole capital expenditure needs of the company over a given year, or over a specific period of time.”
In other words they don’t only look at...