Business Plan Negocia Masters Assignment

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Winning presentation of best business plan Negocia 2nd year Master\'s 2009

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  • milaine
  • Business Plan Negocia Masters Assignment

    1. 1. SHOLTO HUGHES, JULIE MASSON, MILAINE ROSSANALY, MOUNA KETCHIRAT, ANTHONY VERCRUYSSE, and ALIENOR DUVAUCHELLE
    2. 2. <ul><ul><li>Improve Financial Performance </li></ul></ul><ul><ul><li>Enhance Brand Image </li></ul></ul><ul><ul><li>Long Term Growth and Synergies </li></ul></ul><ul><li>1 Park, 5 themes, 5 hotels – total investment 1.25 billion US$ (1/3 cash reserves) </li></ul><ul><li>Opening 2015 – 12 million annual visits </li></ul><ul><li>Profits of US$ 100 million annually for the park within 5 years + US$ 40 million in annual royalties for W.D.Co </li></ul><ul><li>Reinforce image in SA, synergies and growth </li></ul>
    3. 3. <ul><li>Melting-pot of different origins </li></ul><ul><li>Colorful and vibrant culture </li></ul><ul><li>Enviable international reputation </li></ul><ul><li>Fun loving, easygoing and exuberant people </li></ul><ul><li>Symbols: Carnival – “futebol” (soccer) – Samba </li></ul><ul><li>Collectivist society: family, relationships with others </li></ul>
    4. 4. <ul><li>4% GDP growth rate over 6 years </li></ul><ul><li>Booming Middle and Upper classes </li></ul><ul><ul><li>100 million potential customers (excluding neighbors) </li></ul></ul><ul><ul><li>20 million entered middle class between 2005 & 2007 alone </li></ul></ul><ul><li>Financial reforms for stable markets </li></ul><ul><li>Strong exports of primary and secondary goods, leading to growth in service sector </li></ul><ul><li>Welcoming of foreign investments </li></ul>
    5. 5. <ul><li>Several well-established competitors </li></ul><ul><ul><ul><li>Beto Carrero </li></ul></ul></ul><ul><ul><ul><li>Hopi Hari </li></ul></ul></ul><ul><ul><ul><li>Parque Da Mônica </li></ul></ul></ul><ul><li>Key assets for Disney Sao Paolo </li></ul><ul><ul><ul><li>International target </li></ul></ul></ul><ul><ul><ul><li>Location of Disney Park </li></ul></ul></ul><ul><ul><ul><li>International fame of Disney </li></ul></ul></ul>
    6. 6. Opportunities Threats <ul><li>The Brazilian economy is open to international trade since the 90s. Disney Brazil would be a proof of a new trade agreement between Brazil & the US </li></ul><ul><li>An existing demand: the emerging class: 87,4 millions of potential costumers in the Sao Paulo area </li></ul><ul><li>Sao Paulo is a business oriented city: high concentration of businesses </li></ul><ul><li>The Brazilian culture is favorable to the US way of life </li></ul><ul><li>Brazil needs foreign investments </li></ul><ul><li>Slow administrative bureaucracy & high corruption </li></ul><ul><li>Insecurity & crimes are high </li></ul><ul><li>Infrastructures remain under-developed </li></ul><ul><li>Economy still primarily centered on the exports of primary & secondary resources (domestic economy still developing) </li></ul>
    7. 7. <ul><li>Why? </li></ul><ul><ul><li>Local Knowledge </li></ul></ul><ul><ul><li>Contacts and important relationships </li></ul></ul><ul><ul><li>Avoid image of “American Imperialism” </li></ul></ul><ul><ul><li>Split costs and risks </li></ul></ul><ul><ul><li>Negotiation chip </li></ul></ul><ul><li>Who? </li></ul><ul><ul><li>Glocal Partners, Coca Cola… </li></ul></ul><ul><ul><li>Local Partners like TV giant </li></ul></ul><ul><ul><li>Rede Globo </li></ul></ul><ul><ul><li>Local Competitor </li></ul></ul><ul><ul><li>Local Banks and </li></ul></ul><ul><ul><li>investment funds </li></ul></ul>
    8. 8. <ul><ul><li>Glocal Partners, like Coca Cola, Kelloggs… </li></ul></ul><ul><ul><ul><li>Conflict of interests </li></ul></ul></ul><ul><ul><ul><li>Not core business </li></ul></ul></ul><ul><ul><ul><li>International Sponsor risks </li></ul></ul></ul><ul><ul><li>Local Competitor Beto Carrero </li></ul></ul><ul><ul><ul><li>Conflict of interests </li></ul></ul></ul><ul><ul><ul><li>Loss of know-how </li></ul></ul></ul><ul><ul><ul><li>Likely conflicts as own market share decreases </li></ul></ul></ul><ul><ul><li>Local Partners like TV giant Rede Globo </li></ul></ul><ul><ul><ul><li>Not core business </li></ul></ul></ul><ul><ul><ul><li>May choose to use park to “over promote” own business </li></ul></ul></ul>
    9. 9. <ul><ul><li>Local Banks and Hedge Funds </li></ul></ul><ul><ul><ul><li>Large Financial Reserves </li></ul></ul></ul><ul><ul><ul><li>Core Business is Investing </li></ul></ul></ul><ul><ul><ul><li>Established relationships and experience with local administration processes </li></ul></ul></ul><ul><ul><ul><li>Less likely to interfere with </li></ul></ul></ul><ul><ul><li>park management </li></ul></ul><ul><ul><ul><li>Other options more </li></ul></ul></ul><ul><ul><li>appropriate as sponsors </li></ul></ul>
    10. 10. <ul><li>National banks </li></ul><ul><ul><li>Banco do Brasil </li></ul></ul><ul><ul><li>Banco Bradesco </li></ul></ul><ul><li>Brazilian Hedge Funds </li></ul><ul><ul><li>Fiducia Asset Management </li></ul></ul><ul><ul><li>Gavea Investimentos </li></ul></ul>
    11. 12. <ul><li>57.2% of the population lives in the South </li></ul><ul><li>São Paulo = 20 million inhabitants / Rio de Janeiro = 12 million inhabitants </li></ul><ul><li>1st target group: Brazilians </li></ul><ul><ul><li>Middle and upper-middle classes (categories “C” and “B”) </li></ul></ul><ul><ul><li>Urban population, mainly from the South and the Southeast </li></ul></ul><ul><ul><li>Families, friends, schools & businesses – whatever the age </li></ul></ul>*Minimum Wage (2009): 465 Reals (175$) Percentage of the population (%) Social categories Income per month* (US$) 2005 2006 2007 A/B 5 to > 20 MW 15 18 15 C 1 to 5 MV 34 36 46 D/E 0 to 1 MV 51 46 39
    12. 13. <ul><li>Tourism is a growing sector: </li></ul><ul><ul><li>4th in the Americas </li></ul></ul><ul><ul><li>2 nd in Latin America after Mexico </li></ul></ul><ul><ul><li>1st in South America </li></ul></ul><ul><li>Most visited cities: Rio de Janeiro, Foz do Iguaçu and São Paulo </li></ul><ul><li>No Disney Park in South America yet </li></ul><ul><li>Strategic location of Brazil </li></ul><ul><li>= best solution to target Latin Americans </li></ul><ul><li>2nd target group: International tourists </li></ul><ul><ul><li>Primary zone: Argentina, Chile, Uruguay and Paraguay </li></ul></ul><ul><ul><li>Secondary zone: Other Latin American countries </li></ul></ul><ul><ul><li>Tertiary zone: Europe, USA, Asia… </li></ul></ul>
    13. 14. <ul><li>The Park </li></ul><ul><ul><li>Size 21 km 2 , Location: 30 km from Sao Paulo </li></ul></ul><ul><ul><li>Objectives: create a quiet, secure & relaxed environment for families </li></ul></ul><ul><li>Park Themes: 5 lands </li></ul><ul><ul><li>2 Disney reference lands </li></ul></ul><ul><ul><li>3 Disney lands adapted to Brazilians’ </li></ul></ul><ul><ul><li>way of life </li></ul></ul><ul><li>53 attractions </li></ul><ul><ul><li>2 Major attractions => the venture of Disney technological know-how </li></ul></ul><ul><ul><li>51 sensational attractions => for kids and families </li></ul></ul><ul><ul><li>2 Shows/day => Souvenirs of Disney fun and happy spirit and incite clients to purchases </li></ul></ul>
    14. 15. <ul><li>Composition of the Park </li></ul><ul><ul><li>5 Hotels </li></ul></ul><ul><ul><ul><ul><li>1 luxury hotel </li></ul></ul></ul></ul><ul><ul><ul><ul><li>1 business hotel </li></ul></ul></ul></ul><ul><ul><ul><ul><li>3 standard hotels </li></ul></ul></ul></ul><ul><ul><li>59 Restaurants </li></ul></ul><ul><ul><ul><ul><li>3 luxury restaurants </li></ul></ul></ul></ul><ul><ul><ul><ul><li>20 fast food </li></ul></ul></ul></ul><ul><ul><ul><ul><li>36 familial restaurants </li></ul></ul></ul></ul><ul><ul><li>56 Shops </li></ul></ul><ul><ul><ul><ul><li>30 on Main street </li></ul></ul></ul></ul><ul><ul><ul><ul><li>26 in the rest of the Park </li></ul></ul></ul></ul>
    15. 16. <ul><li>Pricing strategy </li></ul><ul><ul><ul><li>Factors to take into consideration </li></ul></ul></ul><ul><ul><ul><li>Internal approach </li></ul></ul></ul><ul><ul><ul><li>External approach </li></ul></ul></ul><ul><ul><ul><li>Disney Brazil added-value </li></ul></ul></ul><ul><li>Prices </li></ul><ul><ul><ul><li>Access to the Park </li></ul></ul></ul><ul><ul><ul><li>Overnight accommodation </li></ul></ul></ul>
    16. 17. In US$ Adult Children One-day Pass 34 30 Two-day Pass 61 55 Three-day Pass 72 65 Families with 3/+ children for 1 day (per person) 29 26 Families with 3/+ children for 2 day (per person) 52 47 Families with 3/+ children for 3 day (per person) 61 55 Annual Pass 105 90 Groups for one day (more than 20 people) 30 27
    17. 18. For 3 people Capacity 88% occupancy 1-night stay Additional related-costs 2-star hotel - Cheyenne Hotel 1000 880 40 10 2-star hotel - Old West Camp David 800 704 50 15 3-star hotel - Newport Bay Club 800 704 60 18 4-star hotel - Hotel New York 1000 880 200 30 5-star hotel - Disneyland Hotel Castle 400 352 350 40
    18. 19. <ul><li>Sponsorships </li></ul><ul><li>Communication Plan </li></ul><ul><li>Cost analysis </li></ul>
    19. 20. <ul><li>Glocal partners </li></ul><ul><ul><li>Mc Donald's </li></ul></ul><ul><ul><li>Coca-Cola </li></ul></ul><ul><ul><li>Kellogg's </li></ul></ul><ul><li>Local Partner </li></ul><ul><ul><li>Rede Globo media giant </li></ul></ul><ul><ul><ul><ul><li>The more visitors, the more profitable we are </li></ul></ul></ul></ul>
    20. 21. <ul><li>Promotional campaign “ Destination of Dreams ”, with a slogan, </li></ul><ul><li>“ In Disneyland, it's carnival everyday” </li></ul><ul><li>Ambassadors: Mickey Mouse & Donald Duck </li></ul><ul><li>Media mix </li></ul>2014 2015 2016 2017 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 (opening) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Disney Characters in McDonalds Happy Meals                                 Disney Characters on Coca-Cola cans                                 Disney Characters on Kellogg's Cereal for kids                                 Viral Marketing                                 Product placement in soap operas                                 Advertising on TV                                 Advertising on Radio                                 Advertising on Newspapers                                 Advertising on Billboards                                
    21. 22. In US$ 2015 2016 2017 2018 Q2, Q3 & Q4 Advertising 75,000,000 85,000,000 40,000,000 30,000,000 Sales promotion 5,000,000 35,000,000 45,000,000 50,000,000 PR/Publicity 40,000,000 35,000,000 20,000,000 20,000,000
    22. 23. <ul><li>Build the park in 5 years  opening October 2015 </li></ul><ul><li>Fund gathering  18 months minimum </li></ul>2009 2010 2011 2012 2013 2014 2015 2016 2017 Q3 Q4 Y1 Y2 Y3 Y4 Y5 Q3 Q4 Y2 Y3 1 Fund gathering                       2 Construction of the Park phase 1                       3 Construction of the Park phase 2                       4 Construction of the Park phase 3                       5 Begin Startup                       6 Regular activity                      
    23. 24. <ul><li>Revenue for park entrances </li></ul><ul><li>Figures are not accounting inflation </li></ul><ul><li>Number of visits are taking into consideration the fact that in 3 years, from 2005 to 2007, more than 20 million Brazilians joined the C class (middle Income class bracket) </li></ul><ul><li>If this trend continues, even at a reduced rate, we can still expect proportionally higher target group in 2015 </li></ul>(In US$) Q4 – 2015 2016 2017 2018 Number of entrances 5,600,000 16,000,000 14,400,000 15,552,000 Average price per entry 28 28 28 28 Total park entrance revenues (US$ millions) 157 448 403 435
    24. 25. <ul><li>Revenue for hotels </li></ul>2016 # of Rooms room price (average of 3 people) extra spending (in US$) Room occupancy 88% revenue per night (in US$ thousand) Total (in US$ million) Hotel Cheyenne ** 1000 40 10 880 44 16 Old West Camp Davy Crocket ** 800 50 15 704 46 16 Newport Bay Club *** 800 60 18 704 55 20 Hotel New York **** 1000 200 30 880 202 74 Disneyland Hotel ***** 400 350 40 352 137 50 Total revenues for hotels 4000         176,788,480
    25. 26. <ul><li>Revenue for gift shop and food service </li></ul><ul><li>Total revenue </li></ul>2016 (in US$ millions) # of visits average spent Total Revenues for gift shop 16,000,000 5 80 Revenues for food 16,000,000 8 128 (In US$ millions) Q4 - 2015 2016 2017 2018 Revenues for park entrance 156 448 403 435 Revenues for hotels 61 176 159 172 Revenues for gift shops 28 80 72 77 Revenues for food 44 128 115.2 124 Real estate revenues 11 30 27 29 Other (advertisement, sponsorship…) 11 30 27 29 Net sales - Total revenues 312.3 892.7 803 867 Variation 35% of 2016 - 10% + 8%
    26. 27. (in US$ millions) Q4 - 2015 2016 2017 2018 Net Sales 312 892 803 867 Cost of Sales (50%) 156 446 401 433 Profit Contribution 156,237 446 401 433 Direct marketing expenses (% of Net Sales) 120 155 (13%) 105 (13%) 100 (10%) Total overhead expenses 113 180 (17% 132 (16%) 135 (16%) Operating results -76 111 (20%) 164 (21%) 198 (23%)
    27. 28. (in US$ billions) Investment part Total amount (in billions) 2015 2016 2017 2018 Walt Disney Co Royalties 5% of Net sales 50% 1.25 15,623,798 44,639,424 40,175,482 43,389,520 Institutional Brazilian banks 30% 0.75 tbd tbd tbd tbd Private Brazilian Investment banks 20% 0.5 tbd tbd tbd tbd Total 100% 2.50        
    28. 29. <ul><li>Financial performance – profits and royalties </li></ul><ul><li>Brand image – parks and resorts as key strengths </li></ul><ul><li>Synergies – internal and with sponsors </li></ul><ul><li>Long term growth – young and emerging against aging populations in US, Europe, Japan and China </li></ul>

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