UTV and Disney: A Strategic Alliance - Case Study Example

1. What were the global opportunities for UTV? How would an alliance with Disney give UTV an edge in its international operations?  The United Television and Software Company Limited (UTV) had grown into an Rs2 Company though the effort of its innovative Chief Operations Officer (CEO) Ronnie Screwvala. The company pioneered forming television content for some Indian broadcasting channels. The expansion of UTV has opened the doors for it to establish its presence not only in India but also in the United States, The United Kingdom and Mauritius. Its three verticals, consisting production of television programs for clients, the Hollywood, Indian and animated films productions and the post-production and special effects, along with other subsidiaries makes for the diversity of the company. The alliance proposed by The Walt Disney Company would open up the possibility of an expansion in the international market. “UTV could also consider acquiring promising companies in India and abroad and then expanding and strengthening its base” (Adhikari & Deshmukh 2010). Its control in the Indian market can no longer be dismissed. The dominance of UTV would also no longer be limited to its presence in a few countries. Screwvala’s mandate to Senior Vice President for Business Development and Strategy Amit Banka is now more than a mere possibility because of the entity of such a huge company such as Disney. 2. What were the advantages and disadvantages in going ahead with the strategic alliance with Disney? What could be a viable alternative to the alliance with Disney, keeping in mind the increase in revenue proposed by Ronnie Screwvala?  “Analysts believed that the alliance would not only lead to synergies in the existing business lines but could also help Disney in expanding their lines of business in India” (Adhikari & Deshmukh 2010). Selling Hungama and a stake in UTV would mean an inflow into its cash reserve. This partnership with a worldwide studio also equates as the answer for UTV’s goal to take its business to the next level as a global company and possibly meet its goal of $200 million revenue by 2010. This cash inflow, when realized, could mean a major capital in its future as a global company. This expands the current vertical of the company and could jumpstart a new vertical. The major disadvantage is expressed in the concerns of management in how big Disney as a company is. There may have a vested interest that UTV may be overlooking or that they may miss if they are not careful in their dealings with Disney. Selling Hungama and stakes in exchange for their cooperation could eventually lead to a takeover or a future abandonment and they may be too overwhelmed before they could realize what’s really happening. 3. What were the competitive advantages of UTV? How could these be exploited in order to expand the company and develop its own brand? An advantage of UTV is its diversity in being able to develop different programs and company strategies on its own through the initiative of its management beginning with its CEO and other personnel. The goal of the company is well-defined and the members thereof are aware and partake of their roles in ensuring that UTV achieves what it has set out to attain in a given span of time. The company was willing to test the waters and then concentrate on the specific businesses it sees most sustainable but its strongest point remains to be that of the entertainment media and its various aspects. The company has already established itself in the Indian market leaving its goal of global presence as its next objective. UTV should take advantage of its expertise in integrating its feel for the local market with the innovation of global convergence. They must not set aside their dominance in the local market but instead maintain rooted in the already recognized Indian television industry. The company should wager this strength to uphold their importance in transacting with feasible investors and on why they should maintain not only control but more importantly scale as Screwvala sees it. The subsequent move is in finding a niche in the global market that assimilates their expertise with the market’s need. Moreover, they could form an alliance with a global brand that could adequately provide the capital UTV needs. But they must keep in mind to protect the interests of the company in all its contracts and business transactions to ensure that they do not get left behind. 4. Should UTV go for an all-out global expansion? Or should it solidify its domestic business and expand in India while forming case-by-case partnerships with international studios for its international operations? It should first solidify its domestic business and then form calculated partnerships in international studios, otherwise, the company might bite off more than it can chew. The merger with Disney could kick-start this goal by maintaining a vertical which the agreement would yield. The kids’ network in coalition with Disney would serve as a good vantage point in its expansion. They could try and negotiate with Disney in the hopes that it does not continue with its proposal to takeover Hungama TV since it still poses as one of their most profitable ventures. In the case that this cannot be contemplated, then the company has no choice but to appropriate it to Disney to secure their investment in the company. The CEO was correct in assuming the risks involved in accommodating Disney, “Various issues, like the valuation and negotiation process, fought for importance in his mind, including long-term spill-over into other verticals” (Adhikari & Deshmukh 2010). But the same cannot be helped if it truly wants to take the UTV to the next level. The control of UTV would be put to a test and it is up to its management to safeguard the current ownership of the company. In the end, Screwvala and Banka were right, “One can do a little bit of market research and so forth, but eventually one has to go with…I won’t call it gut, but with a refined risk-taking imperative!” Reference Adhikari, A & Deshmukh, R 2010, ‘UTV and Disney: A strategic alliance (A)’, Richard Ivey School of Business Foundation, viewed 15 August 2010, . Read More