Strategic Management Final Case Study Andrea Baril Ashley Cleary Sylvia LaBrie

1. Strategic Management Final Case Study Andrea Baril Ashley Cleary Sylvia LaBrie Marie-Michele Lachance 05/03/2012

2. Overview • Company Overview • The Founder • Growth • Location Map • Walt Disney’s Division • Existing Mission • Proposed Mission and Vision • SWOT Analysis • External Audit • CPM • Positioning Map • EFE • Internal Audit • Organizational Chart • Financial Trends • Balance Sheet • Financial Ratios • IFE • Strategic Plan • SWOT Matrix • Space Matrix • IE Matrix • Grand Strategy Matrix • BCG • Matrix Analysis • QSPM • Implementation • Assumptions • Projected Income Statement • Projected Balance Sheet • Projected Ratios • Evaluation • Stock Price • Balance Scored Card • Strategies • Recommendations • Objectives

3. The founder Walt, after the Studio had won 4 Academy Awards Walt Disney 1901-1966 • Walt Disney was born on December 5, 1901 in Chicago • During the fall of 1918, Walt Disney attempted to enlist for military servicebut 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. . .

4. History 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.

5. Growth 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.

6. Growth cont. 1989: Disney-MGM Studiosopens 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 Magazinedebuts, Disney’s Animal Kingdom opens at Walt Disney World Resort, Disney Magic cruise ship departs on its inaugural cruise.

7. 2009 • Disney purchased Marvel Entertainment • Gave a $0.35 dividend per share • Roy Disney died at age 79 • He was a key person in Disney’s animation legacy • Received approval to build a theme park in Shanghai • Released the movie Up

8. LOCATION MAP Disney Resorts: California Florida Tokyo Hong Kong Paris

9. Walt Disney Divisions

10. Walt Disney Divisions Cont.

11. Mission Statement "The mission of The Walt Disney Companyis to be one of the world'sleadingproducers and providers of entertainment and information. Usingour portfolio of brands to differentiateour content, services and consumer products, weseek to develop the mostcreative, innovative and profitable entertainmentexperiences and relatedproducts in the world."

12. Proposed Vision Walt Disney strives to be the world’s most famous entertainment company by creating an amazing experience for individual of all ages.

13. Proposed Mission Our Mission is to be one of the world’s 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. HISTORY

14. SWOT Analysis

15. Strengths • One of the most recognizable entertainment company in the world • Strong advertising • Wide and unique portfolio • Innovative entertainment business • Strong customer service • Strong 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 children’s film-related products based on retail sales

16. Weaknesses • Disney sends a corrupted influence to children • Jasmine was in a forbidden relationship with Aladdin • Snow White lived alone with 7 men • Pinocchio was a liar • Robin Hood was a thief • Tarzan walked without clothes on • A stranger kissed sleeping beauty and she married him • Cinderella lied and sneaked out at night to attend a party • Coyote runs off cliffs and blows himself up

17. Weaknesses • Studio Entertainment and Disney Consumer Products divisions have been experiencing declining revenue for the last 3 years • Disney as a narrow target market • Disney as such a diversify product range that it can reduce efficiency and lead to a lack of strategic focus • High cost of entertainment production • High employee turnover • Poor working conditions in factories • Walt Disney’s Park and Resorts are not easily accessible which leads people to associate Disney World with a costly trip

18. Opportunities • Opportunity to renovate attractions in Park and Resorts Division due to increase in profit • Growth from cable and satellite operators creating even more potential for Disney to make money with their network • Prospect to build more theme park and resorts worldwide • Openings in other areas of the travel business • Opportunity to invest in building theme parks to satisfy the increase in guest spending, theme park attendance, and hotel occupancy • Target new costumers group

19. Threats • Lasting economic recession leading to slow growth rate • High unemployment rate • Park 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 release • Increase in labor cost which will have a noticed impact in Walt-Disney expenses due to their large amount of employee.

20. External Audit

21. CPM Media Network Segment

22. Positioning Map Media Network Segment

23. Positioning Map Park and Resorts Segment

24. EFE

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

26. Organizational Chart

27. Financial Trends

28. Income Statement

29. Balance Sheet A S S E T S

30. Balance Sheet Cont. Liabilities

31. Selected Financial Ratios

32. IFE

33. Strategic Formulation “I do not like to repeat successes, I like to go on to other things.” Walt Disney

34. SWOT Matrix

35. Space Matrix Results

36. Space Matrix Strategies: Market Development Market Penetration Product Development Forward Integration Backward Integration Horizontal Integration Related Diversification Unrelated Diversification

37. IE Matrix

38. Grand Strategy Matrix Strategies:Market DevelopmentMarket PenetrationProduct DevelopmentForward IntegrationBackward IntegrationHorizontal IntegrationRelated DiversificationUnrelated Diversification

39. BCG

40. Matrix Analysis

41. QSPM Matrix

42. QSPM Cont.

43. Implementation “Disneyland will never be completed. It will continue to grow as long as there is imagination left in the world.” Walt Disney “Pixar is the most technically advanced creative company; Apple is the most creatively advanced technical company. “ Steve Jobs 2005-02-21

44. Assumptions • Eliminate 10 billion out of the borrowings from the retained earnings • Finance 1 billion to buy a land in order to open indoor resort in New York in the next three years. • Invest 10 million for advertisement • Spend 1 billion in each of the five existing Park for renovation and new attractions. = Total of 5 billion Total Investment of 19.01 billion

45. Projected Income Statement

46. Projected Balance Sheet Assets

47. Project Balance Sheet Liabilities

48. Project Financial Ratios

49. Evaluation “You're dead if you aim only for kids. Adults are only kids grown up, anyway.” Walt Disney

50. Stock Price Graph