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Since the Mid-1980s, Disney's Strategic Planning Group Turned the Company

Question 158

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Since the mid-1980s, Disney's strategic planning group turned the company into a huge and diverse collection of media and entertainment businesses. The sprawling Disney grew to include everything from theme resorts and film studios to media networks to consumer products and a cruise line. The newly transformed Disney proved hard to manage and performed unevenly. Recently, Disney disbanded the centralized strategic planning unit, decentralizing its functions to Disney division managers. Since then, Disney's management has helped it perform strongly in a competitive marketplace.
A strategic manager at Disney believes that the video-on-demand unit should be sold because the return it has made on Disney's investment has been below Disney's standards. Which of the following, if true, would MOST weaken the strategic manager's conclusion?
Other units at Disney have earned even lower returns on investment than the video-on-demand unit has earned.
Video-on-demand is gaining in popularity over other methods of viewing videos.
Some companies expect lower returns on investment than Disney expects.
The video-on-demand unit uses a technology that was developed outside of Disney.
If Disney sold off its video-on-demand unit, the move would likely be seen as the start of a trend in the media world.

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Video-on-demand is g...

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