Analysis of Diversification Strategy of Disney in Relation to Critical Thinking

Recently, Disney decided to diversify into the direct-to-consumer industry. Their plan was to create streaming services that provided consumers a means to enjoy all that Disney Studios has to offer, for a monthly subscription fee. What they came up with was Disney+ and ESPN+. With these services, consumers could now keep up with the latest superhero drama or watch their favorite sports teams from anywhere!

As with any major decision, for Disney to take such a leap required some very critical thinking. Critical thinking is crucial if you are trying to avoid rash decisions that could lead to a massive loss. This process involves brainstorming, extensive research, and the means of carrying out their plan. Skipping any one of these processes could have been detrimental to the company. Disney+ and ESPN+ may not be in existence today without brainstorming and thorough planning. Through research, they were able to identify whether or not this was a feasible move for the company. Lastly, without the resources to provide such a service, they could have lost the company a lot of money.

I think the company decided to diversify because other streaming services were being rewarded for streaming Disney produced films. With such a large collection of media, Disney knew they had enough to put together a streaming service that included Disney exclusive content that can no longer be found on other streaming platforms. One thought that comes to my mind as to whether this would have been successful is that many people, now able to watch everything Disney from the comfort of their homes, may stop paying to see movies in theaters, hurting the multi-million dollar box office income that Disney brings in annually. However, that still remained true with or without Disney+ because of competitors like Netflix, Hulu, Prime Video, and Redbox. It only made sense for Disney to take their lost business back from their competitors. In order to do so, Disney had to remove all of their content from other services. This meant waiting for existing contracts to expire. Then, they needed to compile all of their content into an easy to use platform. Once finished, it was time to begin advertising their new service to boost subscription sales and build anticipation for the their release. Finally, they had to launch this service for public viewing.

In the end, this decision was very beneficial for Disney. In the first week after the release of Disney+, Disney had gained 10,000,000 new subscribers, a number they expected to reach in 2 months. Also, with the release of Disney+ exclusive content such as “The Mandalorian”, they were able to build anticipation for their newest Star Wars film which dominated the box office. Disney not only used their new service as a way to generate additional income through monthly subscriptions, but this new platform also helped boost ticket sales for their box office releases.

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