A Strategic Alliance of UTV and Disney - Case Study Example

UTV and Disney: A Strategic Alliance UTV In 2006 the UTV Company considered a strategic alliance with the Walt Disney Corporation. This measure was within the understanding of UTV’s intentions to take the company out of its Indian roots to a globalized market. The main strategic approach in these expansion goals was to develop a variety of vertical integration methods. The Disney partnership was believed to benefit UTV’s expansion efforts, and serve Disney through granting them access to the regional Indian market.

The major consideration became a concern over Disney potentially assuming control of UTV; this was a concern that prominently led UTV to examine the confines of the structure of the potential arrangement with Disney. The UTV company was started in 1981 by Screwvala (UTV and Disney). At the time it was India’s first cable TV entity. While the company originally started out for several channels, it would late expand to include international content for channels such as BBC, CNN, and National Geographic.

Later ventures in the US and UK markets significantly increased the company’s market share. The company is noted to have three verticals. The first is the company’s television content production; the second is the movie production and distribution; the third is post-production and special effects development. In terms of the company’s business relationship with Disney, the primary concern is with UTV’s Hungama TV. This entity is the company’s kids’ channel – the first of its kind in India.

It was strategically hoped that in cooperating with Disney within the confines of Hungama TV, the company would also gain furthered access to international markets. Disney Disney is one of the world’s largest and most recognized companies. Since originating over seventy-five years ago, the company has diversified into the major segments of: Media Networks, Studio Entertainment, Disney Consumer Products, and Parks and Resorts. Most notably, in 2004 Disney launched a business venture into India.

This venture was a major company element, reaching over 107 million homes (UTV and Disney). While Disney controlled Toon Disney and the Disney Channel in the Indian market, they desired to further expand through the acquisition of UTV’s Hungama TV. From Disney’s perspective, the acquisition of Hungama TV would further grant Disney access in the Indian market, as well as give the company increased access to UTV’s many media outlets. In terms of the specific contract agreement, Disney desired to acquire 100% of Hungama TV, and to acquire a 14.

9 per cent equity stake in UTV Software Communications Ltd. In terms of competition, it’s noted that UTV has competitors in both their television and film entities. In terms of major competitive companies, the major players are Zee Telefilms, Star India, Set India, and Sun Network. In terms of potential growth patterns, market research has attested to the understanding that there is significant growth potential for Indian companies in foreign markets. The main concern in Disney’s acquisition of Hungama TV related to UTV’s need to protect the parent company.

ReferencesUTV and Disney: A Strategic Alliance. Univeristy of Western Ontario.