HI
This is a group paper. My part is recomendation and justification. You just need 1 paragraph the recomendation and few paragraph jusitifications.
I will post my group paper that finished so far. I m Jason, my theme of recomendation is expand disney globally and Shanghai is the City.
INTRO- Jordan
After entering the cartoon business at the early age of 17, brothers Walt and Roy Disney quickly established their dominance in the entertainment industry. Knowing that cartoon shorts could not sustain for much longer, Walt entered the industry of full length feature films. Releasing cinema blue-chips such as
Snow White
and
Cinderella,
Disney many times focused on short low budget products to quickly increase income to help fund other projects.
Wanting to further expand, Walt secretly purchased 27,000 acres of land to pair a theme park named after their new show, Disneyland. Passing away shortly after, Roy took over all of Disney’s enterprises and opened up the alluring entertainment complex. After palpable success over the first few years, Disney quickly expanded by opening theme parks in Tokyo and Paris, along with opening in-house travel agencies to promote their new parks. In the midst of quickly expanding, Disney channeled immense financial stress due to the heavy costs EPCOT and other expansions.
In 1984, Michael Eisner took over a languishing company that desperately needed a shake up, and that is exactly what he did. Committing himself a balance between creative and financial forces, Eisner took a new approach to maximizing shareholder wealth. He revitalized Disney TV, continued producing feature films that were consistently at the top of the box office, and built a new theme park in Paris. Along with this, Eisner stepped outside of the box and acquired the Anaheim Mighty Ducks, and purchased TV giant ABC and partner ESPN.
While Disney was thriving with exceptional income metrics at the turn of the century, in a way, it all came crashing down. Analysts were expecting a long slump for the company, which ended up being shorter than expected. However, it has become evidently clear that Disney’s unprecedented strategic plan of rapid expansion and a broad portfolio of products may be causing these volatile business cycles. The strategic issue in this case refers to Disney’s aggressive expansion strategy which once precipitated growth, may ultimately need to evolve to continue growing Disney’s entertainment oligopoly.
Strengths
· The Walt Disney brand reputation and popularity is a major strength for the company. Disney has prioritized “traditional family values” in almost all of its business ventures. The company’s wholesome image has been the foundation of Disney’s international success.
· Disney’s diverse portfolio of leading entertainment operations creates synergy through cross-promotion. The firm’s strong existence in a variety of business segments helps differentiate the brand and drive financial pr.
HI This is a group paper. My part is recomendation and justifica.docx
1. HI
This is a group paper. My part is recomendation and
justification. You just need 1 paragraph the recomendation and
few paragraph jusitifications.
I will post my group paper that finished so far. I m Jason, my
theme of recomendation is expand disney globally and
Shanghai is the City.
INTRO- Jordan
After entering the cartoon business at the early age of 17,
brothers Walt and Roy Disney quickly established their
dominance in the entertainment industry. Knowing that cartoon
shorts could not sustain for much longer, Walt entered the
industry of full length feature films. Releasing cinema blue-
chips such as
Snow White
and
Cinderella,
Disney many times focused on short low budget products to
quickly increase income to help fund other projects.
Wanting to further expand, Walt secretly purchased 27,000
acres of land to pair a theme park named after their new show,
Disneyland. Passing away shortly after, Roy took over all of
Disney’s enterprises and opened up the alluring entertainment
complex. After palpable success over the first few years, Disney
quickly expanded by opening theme parks in Tokyo and Paris,
along with opening in-house travel agencies to promote their
new parks. In the midst of quickly expanding, Disney channeled
immense financial stress due to the heavy costs EPCOT and
2. other expansions.
In 1984, Michael Eisner took over a languishing company that
desperately needed a shake up, and that is exactly what he did.
Committing himself a balance between creative and financial
forces, Eisner took a new approach to maximizing shareholder
wealth. He revitalized Disney TV, continued producing feature
films that were consistently at the top of the box office, and
built a new theme park in Paris. Along with this, Eisner stepped
outside of the box and acquired the Anaheim Mighty Ducks, and
purchased TV giant ABC and partner ESPN.
While Disney was thriving with exceptional income metrics at
the turn of the century, in a way, it all came crashing down.
Analysts were expecting a long slump for the company, which
ended up being shorter than expected. However, it has become
evidently clear that Disney’s unprecedented strategic plan of
rapid expansion and a broad portfolio of products may be
causing these volatile business cycles. The strategic issue in
this case refers to Disney’s aggressive expansion strategy which
once precipitated growth, may ultimately need to evolve to
continue growing Disney’s entertainment oligopoly.
Strengths
· The Walt Disney brand reputation and popularity is a
major strength for the company. Disney has prioritized
“traditional family values” in almost all of its business
ventures. The company’s wholesome image has been the
foundation of Disney’s international success.
· Disney’s diverse portfolio of leading entertainment
operations creates synergy through cross-promotion. The firm’s
strong existence in a variety of business segments helps
differentiate the brand and drive financial prosperity.
3. · Founded on the imagination of Walt Disney, the
company prides itself on creating cutting-edge entertainment.
Disney’s investment in theme parks, cruise lines, animated
films etc. has made the company a leader in almost all
entertainment channels.
Weaknesses
· Disney incurs high costs of operations. The company has
invested billions in new business enterprises such as: theme
parks, cruise ships, programming costs, animation production
systems and acquisitions of other entities. This growth strategy
is difficult to sustain in the long term.
· Human capital turnover, especially at the leadership
position, has plagued Disney’s growth. Between 1994 and
January of 2000, roughly 75 executives left the company. This
type of drain on talent negatively affects the culture and
management of Disney’s entertainment empire.
· Disney has been susceptible to negative media publicity.
The company received backlash from the Protestant church
community over the sexual orientation of ABC show host Ellen
DeGeneres. Activists also protested Disney’s treatment of
animals at the Animal Kingdom theme park, and the Arab-
American community was displeased with the stereotypical
portrayal of Aladdin.
Opportunities
· Enhance international presence, specifically within the
European and Japanese markets. Disney only generates about
21% of its revenue abroad, indicating the massive opportunity
for expansion overseas. Strengthening the firm’s movie
production, theme park and merchandising positions would add
significant long term value to Disney shareholders.
4. Threats
· Increasing strength of competition continues to pressure
Disney’s business segments. Warner, Universal, Paramount, Six
Flags, Cedar Point and other domestic entertainment
competitors have persistently fought for market share. It is vital
that Disney continues to innovate within all divisions of
business.
· The evolution of technology is threatening to the overall
media industry. As technology continues to advance, so will
content consumption. Disney is extremely exposed to cable,
radio, film production and other media syndication platforms.
Technology advancement could soon make these media channels
obsolete.
Porters 5 - Charles
Core competency of Disney
Recommendations
#1 Implementing a sustainable and profitable organic growth
strategy (Ben)
Lower expectations (implement strategies that drive
modest/consistent growth over a long period of time rather than
lofty expectations that are set to be short term) - Focus on
current portfolio of business rather than expansion
Recommendation:
5. We recommend implementing a sustainable and profitable
organic growth strategy. A strategy that focuses on Disney’s
most profitable areas as well as ensuring efficient business
operations throughout all aspects of the portfolio. Acquisitions
Disney looks for should be easily integrated into Disney’s
operations; this should help Disney make strides towards
controlled profitable growth.
#2 Continue to Expand Disney Brand internationally (Jason)
Amusement Parks (shanghai)
#3
Justification/Integration
#1 (Ben):
In the Eisner era, Disney has seen a revitalization of its growth.
Lofty expectations have accelerated growth and put Disney back
on track. Disney has been growing rapidly in terms of revenue
and assets; however, when looking at Net Profit Disney has
been declining down below $1 Billion for the first time since
1994. Disney needs to take a step back and grow under control.
To do this, it needs to grow slower with organic growth and
easily integrated acquisitions. Disney has set itself up for
success with its over $45 Billion assets and revenues over $6
Billion; however, the extreme growth felt by Disney is not
sustainable especially when Net Income declines year over year.
The goal of 20% growth is starting to hurt rather than help and
needs to be replaced with slower more profitable growth to
6. drive the bottom line of the business and return value to the
shareholders. Disney needed to be revitalized and it has been,
the issue now is to find how it can be profitable. Disney no
longer needs to grow at such drastic levels, but must find how
to expand efficiently. The extreme growth of revenue and assets
sets Disney on a platform above its competitors. While Disney’s
broad portfolio is useful and drives asset creation as well as
increased revenue, a narrower perspective on growth will give it
a profitable and sustainable growth strategy. Growth doesn’t
need to stop completely, but the current revenue growth goals
should transition into focused profitable growth goals. The
updated goals Disney sets will be able to push them even further
in front of its competition. Disney can grow while streamlining
efficiencies throughout all areas of its portfolio, but should
concentrate on growth in its most profitable areas. Two areas
that show great potential are Disney’s animation and amusement
park sections (which will be discussed later). Disney has the top
24 animated films, and can continue to grow this section of its
business. Disney can continue to grow organically through
continued development in areas such as its animation sector. It
can also grow its profitable sectors through strategic
acquisitions that can easily be integrated into its business and
able to drive up the bottom line from the start. Through
strategic acquisitions as well as organic growth, Disney can
start to control its growth to grow profitably and deliver
shareholder value.
#2 Jason