corporate
into its Disney stores and Disney themed sections in department stores, such as J.C. Penney, a5
‘ell as promote resort themes and thus drive interrelated revenue through cross selling.
(One ofthe downside problems for these falry tale themes is thatthe stories are in the pub-
lic domain, As such, other competitors are seeking to follow Disney's successful approach,
For example, Time Warner Inc’s Warner Bros, Studio wil release Pan, which seems to be beating
Disney to the punch on its former Peter Pan movie success. Likewise, Time Warner will release
Jungle Book in 2017 and has another script based on Beauty and the Beast. Comcast’s Universal
Pictures is developing the Litle Mermaid. However, neither of these studios has the marketing
power nor the franchising capability of Disney and its interrelated business and corporate skill.
Although they are seeking to build these skills, they cannot duplicate Disney's corporate strat-
egy and parent added value because they are more primarily focused on content and distribu-
tion as well as advertising, As such, Disney has a current corporate parental advantage over its
more focused movie and content producing and distribution competitors. Disney's corporate
strategy has put itn thelist of top 10 most admired firms in Fortune magazine.
Sourees: 8 Fitz 2015, Disney recs fy tales, mis cartons el See ural Mach 1183, 86M, Gated
25, Watney ha batter mautap, Wo Set our eb 3c M Le Ram, 2075p oleh Forte,
“anury 1, 48-58/C Palmer sakou, 2015 Ones princesses gh lite lve action, laomberBuiesieck,
Mach, 30-31; ¢.Thaczyk 2015, The wlds most arated companies Fortune, March 97-10H Leonard, 2044,
The master of Rael univere, Bloomberg ans Meck Np 7, o8/¢ Pamer Fare 2018 Mika
watching, Bloomber Buses March 10, 22-23
Om ecsions of busines evel strategies (Chapter 4) and the competitive rivalry
‘and competitive dynamics associated with them (Chapter 5) have concentrated on
firms competing in a single industry or product market. In this chapter, we introduce you.
to corporate-level strategies, which are strategies firms use to diversify their operations
from a single business competing in a single market into several product markets—most
commonly, into several businesses. Thus, a eorporate-tevel strategy specifies actions a
firm takes to gain a competitive advantage by selecting and managing a group of different
nesses competing in different product markets. Corporate-level strategies help com:
panies to select new strategic positions—positions that are expected to increase the firm's
value. As explained in the Opening Case, Disney competes in a number of related enter
tainment and distribution industries,
Asis the case with Disney, firms use corporate-level strategies as a means to grow rev
enues and profits, but there can be additional strategic intents to growth, Firms can pur.
sue defensive or offensive strategies that realize growth but have different strategic intents
Firms can also pursue market development by entering different geographic markets (this,
approach is discussed in Chapter 8). Firms can acquire competitors (horizontal integra-
tion) or buy a supplier or customer (vertical integration). As we see in the Opening Case,
Disney has acquired Pixar and Marvel movie production studios, thereby increasing its
horizontal integration in the movie product and distribution business. Such acquisition
strategies are discussed in Chapter 7. The basic corporate strategy, the topic of this chapter
focuses on diversification
The decision to pursue growth is not a risk-free choice for firms. Indeed, General
Electric (GE) experienced difficulty in its media businesses, especially with NBC, which
it eventually sold to Comcast. GE also suffered significant revenue declines in its finan
cial services businesses and thus reduced its assets in that area, choosing to seek growth
in other businesses such as equipment for the oil industry and equipment for industrial
firms to better utilize the Internet. Effective firms carefully evaluate their growth options
(including the different corporate-level strategies) before committing firm resources to