1. travel
2. tourist destinations
3. theme parks

Strategic Management
Final Case Study
Andrea Baril
Ashley Cleary
Sylvia LaBrie
Marie-Michele Lachance
05/03/2012
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
Overview
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
Walt, after the Studio
had won 4 Academy
Awards
The founder
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 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. . .
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.
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.
Growth cont.
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, Disney’s Animal Kingdom opens at Walt Disney
World Resort, Disney Magic cruise ship departs on its inaugural cruise.
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
LOCATION MAP
Disney Resorts:
1. California
2. Florida
3. Tokyo
4. Hong Kong
5. Paris
Walt Disney Divisions
Media Networks
• ESPN
• Disney/ABC Television
Group
• ABC Entertainment Group
• ABC News
• ABC Owned Television
Stations Group
• ABC Family
• Disney Channels
Worldwide
• Hyperion Book s
Park and Resorts
•
•
•
•
•
•
•
•
•
Disney Land Resorts
Walt Disney World Resort
Tokyo Disney Resort
Disneyland Paris
Hong Kong Disneyland
Disney Cruise Line
Disney Vacation Club
Adventures by Disney
Walt Disney Imagineering
Walt Disney Divisions Cont.
The Walt-Disney Studios
Disney Consumer Products
• Walt-Disney Studios
Motion Pictures
• Marvel Studios
• Touchstone Pictures
• Disneynature
• Walt Disney Animation
Studios
• Pixar Animation Studios
• Disney Music Groups
• Disney Theatrical Group
• Disney Licensing
• Disney Publishing
Worldwide
• Disney Store
Disney Interactive Media
Group
• Disney Online
• Disney Games
Mission Statement
"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."
Proposed Vision
Walt Disney strives to be the world’s
most famous entertainment
company by creating an amazing
experience for individual of all ages.
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,
HISTORY
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
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
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
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
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
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 WaltDisney expenses due to their large amount of employee.
External Audit
CPM
Media Network Segment
Critical Success factors
Weights Rating
0.0 to 1.0 1 to 4
Weighted Score
Rating
1 to 4
0
Weighted Score
Rating
1 to 4
0
Weighted Score
0
Advertising
0.12
4
0.48
4
0.48
2
0.24
Market Share
0.11
3
0.33
4
0.44
2
0.22
Company Image
0.12
4
0.48
3
0.36
3
0.36
Financial Position
0.11
4
0.44
4
0.44
3
0.33
Management
0.09
3
0.27
3
0.27
3
0.27
Global Expansion
0.12
4
0.48
4
0.48
4
0.48
Consumer Loyalty
0.12
4
0.48
4
0.48
3
0.36
Production Capacity
0.12
3
0.36
3
0.36
2
0.24
Technology
0.09
3
0.27
4
0.36
3
0.27
Totals
1
3.59
3.67
2.77
Positioning Map
Media Network Segment
Positioning Map
Park 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
CEO
Theme Parks & Resorts
International
ABC Television Group
Co-Head Interactive
Co-Head Interactive & Playdon
Human Resources
Motion Picture Distribution
Communication
Stategy and Business Development
Government Relations
Disney Consumer Products
ESPN & ABC Sports
ESPN & Disney Media Networks
CFO
Legal and Secretary
CID
Security
Financial Trends
Avg P/E
Price/
Sales
Price/
Book
Net Profit
Margin (%)
Book
Value/
Share
Debt/
Equity
01-Oct-09
12.9
1.41
1.47
9.1
$18.55
0.38
9.8
5.2
9.6
01-Sep-08
14.2
1.69
1.85
11.7
$17.73
0.46
13.7
7.1
10.4
01-Sep-07
15
2.03
2.19
13.2
$15.67
0.5
15.2
7.7
10.4
01-Sep-06
16.9
1.87
1.98
9.8
$15.42
0.43
10.4
5.5
7.5
01-Oct-05
22.2
1.58
1.82
7.8
$13.06
0.49
9.4
4.6
6.3
01-Sep-04
21
1.52
1.7
7.6
$13.05
0.53
9
4.4
5.9
01-Sep-03
28.4
1.52
1.68
4.9
$11.82
0.57
5.6
2.7
3.4
01-Sep-02
33.4
1.2
1.29
4.9
$11.61
0.62
5.3
2.5
3
Return on Return on
Equity (%) Assets (%)
Interest
Coverage
Income Statement
(in Millions, except per share data)
Revenues
Costs and expenses
Restrucuring and impairment charges
Other income (expense)
Net interest expense
Equity in the income of investees
Income from continuing operations before income taxes and minority interests
Income taxs
2009
$36,149.00
$(30,452.00)
$(492.00)
$342.00
$(466.00)
$577.00
$5,658.00
$(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
2009
2008
Current Ratio
1.33
1.01
Quick Ratio
1.19
0.91
1
1
Debt-to-equity Ratio
1.12
1.93
Long-term debt-to-equity Ratio
0.1
0.12
-12.14
-14.13
Inventory Turns
28.44
33.67
Fixed Assets Turnover
1.11
1.2
Total Assets Turnover
0.57
0.61
Gross Profit margins
1.84
1.8
Operating Profit Margin
0.16
0.2
Net Profit Margin
0.09
0.12
Return on Total Assets
0.05
0.07
Return on Stockholders equity
0.06
0.14
Earning per share
1.78
2.34
Price-earnings Ratio
15.31
12.61
Sales
-4.48%
7.66%
Net Income
-25.30%
-5.55%
Liquidity Ratios
Leverage Ratios
Debt-to-Total Assets Ratio
Times-Interest-earned Ratio
Activity Ratios
Profitability Ratios
Growth Rations (yearly)
IFE
Strategic Formulation
“I do not like to repeat successes, I like to
go on to other things.”
Walt Disney
SWOT Matrix
Space Matrix
Results
Strategies:
Market Development
Market Penetration
Product Development
Forward Integration
Backward Integration
Horizontal Integration
Related Diversification
Unrelated Diversification
Space Matrix
IE Matrix
Strong 3-4
Total IFE Score
Average 2-2.99
Media Networks
High 3-4
Studio Entertainment
Total EFE Medium
Score
2-2.99
Consumer Products
Parks and Resorts
Low 11.99
Interactive media
Weak 1-1.99
Strategies:
Market Development
Market Penetration
Product Development
Forward Integration
Backward Integration
Horizontal Integration
Related Diversification
Unrelated Diversification
Grand Strategy Matrix
BCG
Matrix Analysis
QSPM Matrix
QSPM Cont.
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
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
Projected Income
Statement
Assets
Projected Balance Sheet
Liabilities
Project Balance
Sheet
Project Financial Ratios
Liquidity Ratios
Current Ratio
1.33
0.51
Quick Ratio
1.19
0.46
1
0.86
Debt-to-equity Ratio
1.12
1.84
Long-term debt-to-equity Ratio
0.1
0.26
-12.14
-12.14
Inventory Turns
28.44
40.39
Fixed Assets Turnover
1.11
1.11
Total Assets Turnover
0.57
0.62
Gross Profit margins
1.84
1.84
Operating Profit Margin
0.16
0.16
Net Profit Margin
0.09
0.09
Return on Total Assets
0.05
0.06
Return on Stockholders equity
0.06
0.012
Earning per share
1.78
1.72
Price-earnings Ratio
15.31
14.27
Sales
-4.48%
0.00%
Net Income
-25.30%
0.00%
Leverage Ratios
Debt-to-Total Assets Ratio
Times-Interest-earned Ratio
Activity Ratios
Profitability Ratios
Growth Rations (yearly)
Evaluation
“You'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 Objectives
Measure of Target
Time Expectations
Primary Responsibility
Customers
1. Costumer satisfaction
Customer Survey
Webinar
Yearly
Human Resources &
CEO
1. Employee Conditions
Employee Satisfaction
Biannually
CEO
2. Career Opportunity
Lower employee turnover
Biannually
CEO
1. Eco-Friendly Company
Maintain clean environment in
resorts
Increase presence of recycling in
resorts
Limit food, paper and water
waste
Limit land destruction
Yearly
CEO
Marketing Department
2. Ethical Company
Increase in donations and
presence of charitable events
Yearly
CEO
Marketing Department
Number of new products in each
segment
Number of renovated products in
each segment
Yearly
CEO
Marketing Department
Numbers of new resorts built
Yearly
CEO
1. Reduce cost of production
Decrease in cost of Parks, Resorts
and other property
Yearly
CFO
2. Increase profitability
Increase Sales
Reduce Expenses
Quarterly
CFO
Representatives
Community / Socially
Responsible
Operations/Processes
1.
Innovation
2. Brand expansion/ Accessibility
Financial
Strategies

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.
Recommendations
In the next three years Walt Disney should..

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.
Objectives
In the next year Walt Disney should…
 Improve
advertising to promote
entertainment
 Remove
 Buy
the Interactive Media Segment
a land in New York City
Questions
Sources
““Home, The Walt Disney Company”, < http://thewaltdisneycompany.com/<ALDRIDGE, B. “Walt Disney”,
Brad Aldridge Productions, Berkley, CA, August 2002, http://www.justdisney.com/walt_disney/’>
“ Annual Reports, The Walt Disney Company”,
<http://thewaltdisneycompany.com/investors/financial-information/annual-report>
“ Who Owns the Media? Media Ownership Charts, Free Press”, Florence, MA,
<http://www.freepress.net/ownership/chart>
“ Investor Relations, The Walt Disney Company”, <http://thewaltdisneycompany.com/investors>
“ Walt Disney Company (DIS) News – The New York Times”
<http://topics.nytimes.com/top/news/business/companies/disney_walt_company/index.html>
“ Stock Quote for Walt Disney Co – MSN Money”, page generated 9:55PM,
<http://investing.money.msn.com/investments/stock-price?Symbol=dis&ocid=qbeb>
“ DIS: Summary for Walt Disney Company (The) Common – Yahoo! Finance”
<http://finance.yahoo.com/q?s=dis&ql=1>
“ Organizational Chart The Walt Disney Company – TheOfficialBoard”,
<http://www.theofficialboard.com/org-chart/walt-disney>
“ Disney Corporate Press Releases , The Walt Disney Company”,
<http://thewaltdisneycompany.com/disney-news/pressreleases?tid=All&field_press_release_date_value[value][year]=2009&title=&page=3>