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
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
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. . .

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.

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
.

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.

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

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
• 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

"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."

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.

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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


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


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


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

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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.

Media Network Segment
Advertising
Market Share
Company Image
Financial Position
Management
Global Expansion
Consumer Loyalty
Production Capacity
Technology
Totals
Critical Success factors Weights Rating Weighted Score Rating Weighted Score Rating Weighted Score
0.0 to 1.0
1 to 4 1 to 4 1 to 4
0 0 0
0.12
0.11
0.12
0.11
0.09
4
3
4
4
3
0.48
0.33
0.48
0.44
0.27
4
4
3
4
3
0.48
0.44
0.36
0.44
0.27
2
2
3
3
3
0.24
0.22
0.36
0.33
0.27
0.12
0.12
0.12
0.09
1
3
3
4
4
0.48
0.48
0.36
0.27
3.59
3
4
4
4
0.48
0.48
0.36
0.36
3.67
2
3
4
3
0.48
0.36
0.24
0.27
2.77

Media Network Segment

Park and Resorts Segment

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

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

01-Oct-09
01-Sep-08
01-Sep-07
01-Sep-06
01-Oct-05
01-Sep-04
01-Sep-03
01-Sep-02
15
16.9
22.2
21
Avg P/E
Price/
Sales
Price/
Book
Net Profit
Margin (%)
Book
Value/
Share
Debt/
Equity
Return on
Equity (%)
Return on
Assets (%)
Interest
Coverage
12.9
14.2
1.41
1.69
1.47
1.85
9.1
$18.55 0.38
11.7
$17.73 0.46
9.8
13.7
5.2
7.1
9.6
10.4
2.03
1.87
1.58
1.52
2.19
1.98
1.82
1.7
13.2
$15.67 0.5
9.8
$15.42 0.43
7.8
7.6
$13.06
$13.05
0.49
0.53
15.2
10.4
9.4
9
7.7
5.5
4.6
4.4
10.4
7.5
6.3
5.9
28.4
33.4
1.52
1.2
1.68
1.29
4.9
$11.82 0.57
4.9
$11.61 0.62
5.6
5.3
2.7
2.5
3.4
3

(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
Minority interests
Income from continuing operations
Discontinued operations, net of tax
Net income
Diluted earnings per share:
Earnings per share, continuing operations
Earnings per share, discontinued operations
Earnings per share
Basic earnings per share
Earnings per share, continuing operations
Earnings per share, discontinued operations
Earnings per share
Weighted average number of common and common equivalent shares outstanding:
Diluted
Basic
Income Statement
2009
$36,149.00
$(30,452.00)
$(492.00)
$342.00
$(466.00)
$577.00
$5,658.00
$(2,049.00)
$(302.00)
$3,307.00
-
$3,307.00
$1.76
$1.76
$1.78
$1.78
$1,875.00
$1,856.00

.

Liquidity Ratios
Current Ratio
Quick Ratio
Leverage Ratios
Debt-to-Total Assets Ratio
Debt-to-equity Ratio
Long-term debt-to-equity Ratio
Times-Interest-earned Ratio
Activity Ratios
Inventory Turns
Fixed Assets Turnover
Total Assets Turnover
Profitability Ratios
Gross Profit margins
Operating Profit Margin
Net Profit Margin
Return on Total Assets
Return on Stockholders equity
Earning per share
Price-earnings Ratio
Growth Rations (yearly)
Sales
Net Income
2009
1.33
1.19
1
1.12
0.1
-12.14
28.44
1.11
0.57
1.84
0.16
0.09
0.05
0.06
1.78
15.31
-4.48%
-25.30%
Selected Financial Ratios
2008
1.01
0.91
1
1.93
0.12
-14.13
33.67
1.2
0.61
1.8
0.2
0.12
0.07
0.14
2.34
12.61
7.66%
-5.55%

Strategies:
Market Development
Market Penetration
Product Development
Forward Integration
Backward Integration
Horizontal Integration
Related Diversification
Unrelated Diversification

High 3-4
Total EFE
Score
Medium
2-2.99
Low 1-
1.99
Strong 3-4
Total IFE Score
Average 2-2.99
Media Networks
Weak 1-1.99
Studio Entertainment
Consumer Products
Parks and Resorts
Interactive media

Strategies:
Market Development
Market Penetration
Product Development
Forward Integration
Backward Integration
Horizontal Integration
Related Diversification
Unrelated Diversification

“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

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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

Liquidity Ratios
Current Ratio
Quick Ratio
Leverage Ratios
Debt-to-Total Assets Ratio
Debt-to-equity Ratio
Long-term debt-to-equity Ratio
Times-Interest-earned Ratio
Activity Ratios
Inventory Turns
Fixed Assets Turnover
Total Assets Turnover
Profitability Ratios
Gross Profit margins
Operating Profit Margin
Net Profit Margin
Return on Total Assets
Return on Stockholders equity
Earning per share
Price-earnings Ratio
Growth Rations (yearly)
Sales
Net Income
1.84
0.16
0.09
0.05
0.06
1.78
15.31
-4.48%
-25.30%
1.33
1.19
1
1.12
0.1
-12.14
28.44
1.11
0.57
Project Financial Ratios
1.84
0.16
0.09
0.06
0.012
1.72
14.27
0.00%
0.00%
0.51
0.46
0.86
1.84
0.26
-12.14
40.39
1.11
0.62

Primary Responsibility Area of Objectives
Customers
1. Costumer satisfaction
Measure of Target
Customer Survey
Webinar
Representatives
1. Employee Conditions
2. Career Opportunity
Community / Socially
Responsible
1. Eco-Friendly Company
Employee Satisfaction
Lower employee turnover
2. Ethical Company
Maintain clean environment in resorts
Increase presence of recycling in resorts
Limit food, paper and water waste
Limit land destruction
Increase in donations and presence of charitable events
Operations/Processes
1. Innovation
2. Brand expansion/ Accessibility
Number of new products in each segment
Number of renovated products in each segment
Numbers of new resorts built
Time Expectations
Yearly
Biannually
Biannually
Yearly
Yearly
Yearly
Yearly
Financial
1. Reduce cost of production
2. Increase profitability
Decrease in cost of Parks, Resorts and other property
Increase Sales
Reduce Expenses
Yearly
Quarterly
Human Resources &
CEO
CEO
CEO
CEO
Marketing Department
CEO
Marketing Department
CEO
Marketing Department
CEO
CFO
CFO


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.

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.

In the next year Walt Disney should…

Improve advertising to promote entertainment

Remove the Interactive Media Segment

Buy a land in New York City

““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 >