Q2. Considering Walt Disney's corporate level strategy, explain what type and level of diversification they are implementing. Discuss the advantages and disadvantages of this . level of diversification.

subject: strategic management

Levels and Types of Diversification https://www.youtube.com/watch?v=X50pXorhtiy FIGURE 7.1 Levels and types of diversification Low Levels of Diversification Single business: 95% or more of revenue comes from a single business Dominant business: Between 70% and 95% of revenue comes from a single business. B Moderate to High Levels of Diversification Related constrained: Less than 70% of revenue comes from the dominant business, and all businesses share product, technological, and distribution B linkages. A Related linked (mixed related and unrelated): Less than 70% of revenue comes from the dominant business, and there are only limited links between businesses. B Very High Levels of Diversification Unrelated: Less than 70% of revenue comes from the dominant business, and there are no common links between businesses. B c Source: Adapted from R. P. Rumelt. 1974. Strategy. Structure and Economic Performance, Boston: Harvard Business School Reasons for diversification Table 6.1 Reasons for Diversification Value-Creating Diversification Economies of scope (related diversification) Sharing activities Transferring core competencies Market power (related diversification) Blocking competitors through multipoint competition Vertical integration Financial les (unrelated diversification) Efficient internal capital allocation Business restructuring . . . . . . Value-Neutral Diversification Antitrust regulation Tax laws Low performance Uncertain future cash flows Risk reduction for firm Tangible resources Intangible resources . Value-Reducing Diversification Diversifying managerial employment risk Increasing managerial compensation . Value-Creating Diversification Strategies Operational and Corporate Relatedness Figure 6.2 Value-Creating Diversification Strategies: Operational and Corporate Relatedness High Related Constrained Diversification Both Operational and Corporate Relatedness Operational Relatedness: Sharing Activities between Businesses Low Unrelated Diversification Related Linked Diversification Low High Corporate Relatedness: Transferring Core Competencies into Businesses 2011 Celang Mayotte Write dar