Strategic ManagementFinal Case StudyAndrea BarilAshley ClearySylvia LaBrieMarie-Michele Lachance

05/03/2012

OverviewCompany OverviewThe FounderGrowthLocation MapWalt Disneys Division

Existing Mission

Proposed Mission and Vision

SWOT Analysis

External AuditCPMPositioning MapEFE

Internal AuditOrganizational ChartFinancial TrendsBalance SheetFinancial RatiosIFE

Strategic PlanSWOT MatrixSpace MatrixIE MatrixGrand Strategy MatrixBCGMatrix AnalysisQSPM

ImplementationAssumptionsProjected Income StatementProjected Balance SheetProjected Ratios

EvaluationStock PriceBalance Scored CardStrategiesRecommendationsObjectives

The founderWalt Disney was born on December 5, 1901 in Chicago During the fall of 1918, Walt Disney attempted to enlist for military service but he got rejected.He started a small company called Laugh-O-Grams, which eventually fell bankrupt. With his suitcase, and $20 Walt headed to Hollywood to start anew.After making a success of his "Alice Comedies," Walt became a recognized Hollywood figure.Disney took a deep interest in the establishment of California Institute of the Arts, a college-level professional school of all the creative and performing arts.Walt Disney passed away on December 15, 1966.Urban legend maintains his corpse would be frozen and stored beneath the Pirates of the Caribbean ride at Disneyland. . .

Walt, after the Studio had won 4 Academy AwardsWalt Disney 1901-1966

October 16, 1923:This date is considered the start of the Disney Company first known as The Disney Brothers Studio.1928:First Mickey Mouse cartoon, and the first appearance by Minnie Mouse.1932:Flowers and Trees, first full-color cartoon and first Academy Award winner.1939:The Disney Studio begins its move to Burbank, California.1940:Walt Disney Productions issues its first stock.

History

1955:Mickey Mouse Club debuts on television.1971:Walt Disney World Resort opens with the Magic Kingdom and two hotels near Orlando, Florida.1982:EPCOT Center opens at Walt-Disney World Resort.1983:Tokyo Disneyland, the first international Disney theme park, opens in Japan.1987:The first Disney Store opens, in Glendale, California.

Growth

1989:Disney-MGM Studios opens at Walt Disney World Resort.1992:Disneyland Paris opens.1995:Disney agrees to purchase 25 percent of the California Angels baseball team, Disney agrees to purchase Capital Cities/ABC for $19 billion. The Disney Channel begins operation in the UK.1996:Disney Online launches Disney.com. Radio Disney, a live 24-hour music-intensive radio network, debuts.1998:ESPN Magazine debuts, Disneys Animal Kingdom opens at Walt Disney World Resort, Disney Magic cruise ship departs on its inaugural cruise.

Growth cont.

Disney purchased Marvel EntertainmentGave a $0.35 dividend per shareRoy Disney died at age 79 He was a key person in Disneys animation legacyReceived approval to build a theme park in ShanghaiReleased the movie Up

2009

LOCATION MAPDisney Resorts:CaliforniaFloridaTokyoHong KongParis

Walt Disney Divisions

Media Networks Park and ResortsESPNDisney/ABC Television GroupABC Entertainment GroupABC NewsABC Owned Television Stations GroupABC FamilyDisney Channels WorldwideHyperion Book sDisney Land ResortsWalt Disney World ResortTokyo Disney ResortDisneyland ParisHong Kong DisneylandDisney Cruise LineDisney Vacation ClubAdventures by DisneyWalt Disney Imagineering

Walt Disney Divisions Cont.

The Walt-Disney StudiosDisney Consumer ProductsWalt-Disney Studios Motion PicturesMarvel StudiosTouchstone PicturesDisneynatureWalt Disney Animation StudiosPixar Animation StudiosDisney Music GroupsDisney Theatrical GroupDisney Licensing Disney Publishing WorldwideDisney Store

Disney Interactive Media GroupDisney OnlineDisney Games

"The mission of The Walt Disney Company is to be one of the world's leading producers and providers of entertainment and information. Using our portfolio of brands to differentiate our content, services and consumer products, we seek to develop the most creative, innovative and profitable entertainment experiences and related products in the world."

Mission Statement

Proposed VisionWalt Disney strives to be the worlds most famous entertainment company by creating an amazing experience for individual of all ages.

HISTORYProposed MissionOur Mission is to be one of the worlds leading producer and provider of entertainment and information, from parks to network media, and website for all ages. We seek to provide a great experience for our customers, as well as for our employees. By using our unique portfolio to differentiate our content, services and consumer products, we seek to develop the most creative, innovative and profitable entertainment experiences, which would produce financial rewards to our shareholders. In everything we do, we try to contribute to our communities by giving them the best experience.

SWOT Analysis

One of the most recognizable entertainment company in the worldStrong advertisingWide and unique portfolioInnovative entertainment businessStrong customer serviceStrong Media Networks and Broadcasting division Disney owns a variety of companies, which allows them to generate more profits from different industry such as Media Networks and Broadcasting, Park and Resorts, Studio Entertainment and Disney Consumer Products Disney is the largest worldwide licensor of character-based merchandise and producer of childrens film-related products based on retail sales

Strengths

Disney sends a corrupted influence to childrenJasmine was in a forbidden relationship with AladdinSnow White lived alone with 7 menPinocchio was a liarRobin Hood was a thiefTarzan walked without clothes onA stranger kissed sleeping beauty and she married himCinderella lied and sneaked out at night to attend a partyCoyote runs off cliffs and blows himself up

Weaknesses

Studio Entertainment and Disney Consumer Products divisions have been experiencing declining revenue for the last 3 yearsDisney as a narrow target marketDisney as such a diversify product range that it can reduce efficiency and lead to a lack of strategic focusHigh cost of entertainment production High employee turnoverPoor working conditions in factoriesWalt Disneys Park and Resorts are not easily accessible which leads people to associate Disney World with a costly trip

Weaknesses

Opportunity to renovate attractions in Park and Resorts Division due to increase in profitGrowth from cable and satellite operators creating even more potential for Disney to make money with their networkProspect to build more theme park and resorts worldwideOpenings in other areas of the travel businessOpportunity to invest in building theme parks to satisfy the increase in guest spending, theme park attendance, and hotel occupancyTarget new costumers group

Opportunities

Lasting economic recession leading to slow growth rateHigh unemployment ratePark and Resorts Divisions success is unpredictable because of exchange rate fluctuations; travel industry trends; amount of available leisure time; oil and transportation prices; and weather patterns and seasonality.Changes in technology leads customers to stream online instead of buying DVD.Online streaming makes Disney vulnerable to piracy and violation of its intellectual property.Retail distribution business are influenced by seasonal consumer purchasing behavior and by the timing and performance of animated theatrical releaseIncrease in labor cost which will have a noticed impact in Walt-Disney expenses due to their large amount of employee.

Threats

External Audit

CPMMedia Network Segment

Critical Success factorsWeightsRatingWeighted ScoreRatingWeighted ScoreRatingWeighted Score0.0 to 1.01 to 41 to 41 to 4000Advertising0.1240.4840.4820.24Market Share0.1130.3340.4420.22Company Image0.1240.4830.3630.36Financial Position0.1140.4440.4430.33Management0.0930.2730.2730.27Global Expansion0.1240.4840.4840.48Consumer Loyalty0.1240.4840.4830.36Production Capacity0.1230.3630.3620.24Technology0.0930.2740.3630.27Totals13.593.672.77

Positioning MapMedia Network Segment

Positioning MapPark and Resorts Segment

EFE

Internal Audit

Disneyland will never be completed. It will continue to grow as long as there is imagination left in the world.- Walt Disney

Organizational Chart

Financial Trends

Avg P/EPrice/ SalesPrice/ BookNet Profit Margin (%)Book Value/ ShareDebt/ EquityReturn on Equity (%)Return on Assets (%)Interest Coverage01-Oct-0912.91.411.479.1$18.55 0.389.85.29.601-Sep-0814.21.691.8511.7$17.73 0.4613.77.110.401-Sep-07152.032.1913.2$15.67 0.515.27.710.401-Sep-0616.91.871.989.8$15.42 0.4310.45.57.501-Oct-0522.21.581.827.8$13.06 0.499.44.66.301-Sep-04211.521.77.6$13.05 0.5394.45.901-Sep-0328.41.521.684.9$11.82 0.575.62.73.401-Sep-0233.41.21.294.9$11.61 0.625.32.53

Income Statement

(in Millions, except per share data)2009Revenues $36,149.00 Costs and expenses $(30,452.00)Restrucuring and impairment charges $(492.00)Other income (expense) $342.00 Net interest expense $(466.00)Equity in the income of investees $577.00 Income from continuing operations before income taxes and minority interests $5,658.00 Income taxs $(2,049.00)Minority interests $(302.00)Income from continuing operations $3,307.00 Discontinued operations, net of tax - Net income $3,307.00 Diluted earnings per share: Earnings per share, continuing operations $1.76 Earnings per share, discontinued operations Earnings per share $1.76 Basic earnings per share Earnings per share, continuing operations $1.78 Earnings per share, discontinued operations Earnings per share $1.78 Weighted average number of common and common equivalent shares outstanding: Diluted $1,875.00 Basic $1,856.00

Balance Sheet

Balance Sheet Cont.

Selected Financial Ratios

20092008Liquidity RatiosCurrent Ratio1.331.01Quick Ratio1.190.91Leverage RatiosDebt-to-Total Assets Ratio11Debt-to-equity Ratio1.121.93Long-term debt-to-equity Ratio0.10.12Times-Interest-earned Ratio-12.14-14.13Activity RatiosInventory Turns28.4433.67Fixed Assets Turnover1.111.2Total Assets Turnover0.570.61Profitability RatiosGross Profit margins1.841.8Operating Profit Margin0.160.2Net Profit Margin0.090.12Return on Total Assets0.050.07Return on Stockholders equity0.060.14Earning per share1.782.34Price-earnings Ratio15.3112.61Growth Rations (yearly)Sales-4.48%7.66%Net Income-25.30%-5.55%

IFE

Strategic FormulationI do not like to repeat successes, I like to go on to other things.Walt Disney

SWOT Matrix

Space Matrix Results

Space MatrixStrategies:Market DevelopmentMarket PenetrationProduct DevelopmentForward IntegrationBackward IntegrationHorizontal IntegrationRelated DiversificationUnrelated Diversification

IE Matrix

Strategies:Market DevelopmentMarket PenetrationProduct DevelopmentForward IntegrationBackward IntegrationHorizontal IntegrationRelated DiversificationUnrelated DiversificationGrand Strategy Matrix

BCG

Matrix Analysis

QSPM Matrix

QSPM Cont.

ImplementationDisneyland will never be completed. It will continue to grow as long as there is imagination left in the world. Walt DisneyPixar is the most technically advanced creative company; Apple is the most creatively advanced technical company. Steve Jobs 2005-02-21

AssumptionsTotal Investment of 19.01 billion

Projected Income Statement

Projected Balance SheetAssets

Project Balance SheetLiabilities

Project Financial Ratios

Liquidity RatiosCurrent Ratio1.330.51Quick Ratio1.190.46Leverage RatiosDebt-to-Total Assets Ratio10.86Debt-to-equity Ratio1.121.84Long-term debt-to-equity Ratio0.10.26Times-Interest-earned Ratio-12.14-12.14Activity RatiosInventory Turns28.4440.39Fixed Assets Turnover1.111.11Total Assets Turnover0.570.62Profitability RatiosGross Profit margins1.841.84Operating Profit Margin0.160.16Net Profit Margin0.090.09Return on Total Assets0.050.06Return on Stockholders equity0.060.012Earning per share1.781.72Price-earnings Ratio15.3114.27Growth Rations (yearly)Sales-4.48%0.00%Net Income-25.30%0.00%

EvaluationYou're dead if you aim only for kids. Adults are only kids grown up, anyway.Walt Disney

Stock Price Graph

Balanced Score Card

Area of ObjectivesMeasure of TargetTime ExpectationsPrimary ResponsibilityCustomers1. Costumer satisfactionCustomer SurveyWebinarYearlyHuman Resources &CEORepresentatives1. Employee ConditionsEmployee Satisfaction BiannuallyCEO2. Career OpportunityLower employee turnoverBiannuallyCEO Community / Socially Responsible1. Eco-Friendly CompanyMaintain clean environment in resortsIncrease presence of recycling in resortsLimit food, paper and water wasteLimit land destructionYearly CEO Marketing Department2. Ethical CompanyIncrease in donations and presence of charitable eventsYearly CEO Marketing DepartmentOperations/ProcessesInnovationNumber of new products in each segmentNumber of renovated products in each segmentYearly CEOMarketing Department2. Brand expansion/ AccessibilityNumbers of new resorts builtYearlyCEO

Financial 1. Reduce cost of productionDecrease in cost of Parks, Resorts and other property YearlyCFO2. Increase profitability Increase Sales Reduce ExpensesQuarterlyCFO

Use product development to renovate and build new attractions in order to attract an older target market.

Use market development to build a new theme park which will be more accessible to the North East area.

Strategies

Build an indoor theme Park and Resort in New York. Improve advertising to promote entertainment which target a more mature audience.Remove the Interactive Media Segment.Remodel and build new attractions in every Park and Resorts to stay appealing to our customers.

RecommendationsIn the next three years Walt Disney should..

ObjectivesIn the next year Walt Disney should

Improve advertising to promote entertainmentRemove the Interactive Media SegmentBuy a land in New York City

Questions

Sources Home, The Walt Disney Company, < http://thewaltdisneycompany.com/ Annual Reports, The Walt Disney Company,

Who Owns the Media? Media Ownership Charts, Free Press, Florence, MA,

Investor Relations, The Walt Disney Company, Walt Disney Company (DIS) News The New York Times Stock Quote for Walt Disney Co MSN Money, page generated 9:55PM,

DIS: Summary for Walt Disney Company (The) Common Yahoo! Finance Organizational Chart The Walt Disney Company TheOfficialBoard, Disney Corporate Press Releases , The Walt Disney Company,