Disney & Utv Software - Emerging Market Acquisition

Disney & UTV Software - Emerging Market Acquisition

Disney, with Mickey Mouse as its mascot, has been a well-known brand world over. It recently acquired UTV Software, an entertainment conglomerate based out of Mumbai. This acquisition is a prime example of an emerging market acquisition.

Disney in India

Disney has had mixed success in India. Although they had successful television channels in the country, their movie business had not taken off. The company had partnered with multiple production houses to make big budget movies but had failed to generate revenues. Furthermore the brand awareness for Disney in India was at sub-optimal levels.

Formation of An Alliance

UTV Software was involved in multiple businesses in India viz. films, broadcasting and gaming. Disney on the other hand was only involved in television and a dismal movie business. In 2011 the company formed a creative alliance with UTV to increase its foothold in India, by leveraging UTV's local brands, specifically targeting the film business.

Partner Traits

1. Complementarity - The local expertise of UTV provided complementary skills to Disney's stable; local brands & content

2. Compatibility - Disney being a larger company had a more formal structure than UTV; lack of a cultural fit

3. Commitment - Disney was trailing UTV-Hungama in the kid television space; lack of commitment between the companies

Over the course of the year, Disney realized the potential in UTV's different businesses and bought the remaining stake in the company. The acquisition not only helped increase the brand's presence in India but also enabled them to get important insights into the market by retaining the top management. Furthermore they now had access to the mobile games unit of UTV, Indiagames. The smart phone usage in the country had risen exponentially presenting Disney with an opportunity to increase content consumption amongst smart phone users.