The Walt Disney Company was founded on October 16, 1923, and has managed to thrive for over ninety years by producing family entertainment, focusing mainly on films and theme parks. To improve the company and shareholder value, it needs to focus on increasing profit and minimizing risk in a shifting business environment.
First, as it is in the entertainment industry, its fortunes depend on anticipating shifts in public taste, something that is inherently risky and unpredictable. As with most entertainment companies, much of Disney's revenue can be generated by a small number of blockbusters, but it is impossible to predict in advance what will become a blockbuster. Thus it is important for Disney to maintain a diverse portfolio of entertainment products, both through internal developments and acquisitions.
Changing technology is disrupting the entertainment industry. While releases of films in movie theaters still can generate revenue, people increasingly obtain entertainment on a wide range of platforms including home entertainment systems, video games, mobile entertainment, and most recently virtual reality platforms, as well as traveling to theme parks. Disney needs to cater to all of these platforms either in-house, by acquisitions, or by strategic partnerships.
Globalization is a major factor in Disney's profits, with new markets such as China, South America, and Africa contributing an increasing proportion of its revenue. Thus Disney must increasingly respond to global tastes either by trying to create works of global appeal or by creating products with specific regional appeals.
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