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Presenters:
Rao
Strategic Formulation
Overview
Company Overview The Founder Walt Disneys Division Mission statement Financial Trends Balance Sheet Strategic formulation: Input stage EFE IFE CPM Stage 2: Matching stage SWOT Analysis Space Matrix Grand Strategy Matrix BCG Stage 3: QSPM QSPM Evaluation Strategies Recommendations Objectives for Walt Disney
The founder
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
The Walt-Disney Studios Walt-Disney Studios Motion Pictures Marvel Studios Touchstone Pictures Disneynature Walt Disney Animation Studios Pixar Animation Studios Disney Music Groups Disney Theatrical Group
Disney Consumer Products 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."
Financial Trends
Book Value/ Share
Avg P/E
Price/ Sales
Price/ Book
Debt/ Equity
Interest Coverage
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
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
Balance Sheet
Framework
EFE
IFE
CPM
Media Network Segment
Critical Success factors Weights Rating 0.0 to 1.0 1 to 4 Weighted Score Rating 1 to 4 0 Advertising Market Share Company Image Financial Position Management Global Expansion Consumer Loyalty Production Capacity Technology Totals 0.12 0.11 0.12 0.11 0.09 0.12 0.12 0.12 0.09 1 4 3 4 4 3 4 4 3 3 0.48 0.33 0.48 0.44 0.27 0.48 0.48 0.36 0.27 3.59 4 4 3 4 3 4 4 3 4 Weighted Score Rating 1 to 4 0 0.48 0.44 0.36 0.44 0.27 0.48 0.48 0.36 0.36 3.67 2 2 3 3 3 4 3 2 3 Weighted Score
0 0.24 0.22 0.36 0.33 0.27 0.48 0.36 0.24 0.27 2.77
Framework
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 childrens film-related products based on retail sales
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 Disneys 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.
SWOT Matrix
Strategies: Market Development Market Penetration Product Development Forward Integration Backward Integration Horizontal Integration Related Diversification Unrelated Diversification
Space Matrix
BCG
Framework
Stage 3:
QSPM Matrix
QSPM Matrix
QSPM Cont.
Proposed strategies
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
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 the Interactive Media Segment Buy a land in New York City
Questions