Pros And Cons Of Disney

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Has Disney diversified too far? I believe Disney has diversified too far. I think the first bad decision they made is to create ‘Touchstone’. I personally view this as a diversification out of desperation as they lost Walt Disney the company sort of running out of ideas to make animation, which always has been their best ability (should have said core competence). Even though, Touchstone did generate profit to Disney and it can share Disney resources, as a film company, to film at Touchstone, but it made them lost track of what their core business really is. It’s even getting worse when Touchstone released ‘Down and out in Beverly Hills, R-rated movie. Disney has a reputation for suiting for a family and it shouldn’t be releasing any movies…show more content…
Part of what happen with the film industry in 1980s is that the business might be reaching the decline state as it stated that about 60% of all movies lost money. However, under Eisner managing, Disney has been releasing 18 new films per year and later attempt to release 68 films in 1994. Apart from Touchstone Disney also owned 2 more filming companies, Hollywood and Miramax. Due to this increasing number of films, no wonder why Disney finally had some shares in box office. Starting since 1952 Disney was getting into a habit of owning, the company had to either acquired or opened up a new business/divisions almost every year. It acquired almost anything that it thinks it might do some good to the company, including hockey and baseball team. It’s good that they had been vertically integrated; they did almost everything in the whole industry by themselves starting from making movie until distributing the videos, but sometimes things like hockey and baseball team might not be necessary for them. In 1995, Disney acquired ABC for $19 billion and raised its debt ratio from 20% to 34 %. Even though, acquiring ABC created more programming distribution channel for them, it might not be a better off
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