1. Strategic Management
Final Case Study
Andrea Baril
Ashley Cleary
Sylvia LaBrie
Marie-Michele Lachance
05/03/2012

2. Company Overview
Overview
• The Founder
• Growth
• Location Map Strategic Plan
• Walt Disney’s Division • SWOT Matrix
• Space Matrix
Existing Mission • IE Matrix
• Grand Strategy Matrix
Proposed Mission and Vision • BCG
• Matrix Analysis
SWOT Analysis • QSPM
External Audit Implementation
• CPM • Assumptions
• Positioning Map • Projected Income Statement
• EFE • Projected Balance Sheet
• Projected Ratios
Internal Audit
• Organizational Chart Evaluation
• Financial Trends • Stock Price
• Balance Sheet • Balance Scored Card
• Financial Ratios • Strategies
• IFE • Recommendations
• Objectives

3. Walt, after the Studio
The founder
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. . .

4. 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.

5. 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.

6. 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.

7. 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

8. LOCATION MAP
Disney Resorts:
1. California
2. Florida
3. Tokyo
4. Hong Kong
5. Paris

9. Walt Disney Divisions
Media Networks Park and Resorts
• ESPN • Disney Land Resorts
• Disney/ABC Television • Walt Disney World Resort
Group • Tokyo Disney Resort
• ABC Entertainment Group • Disneyland Paris
• ABC News • Hong Kong Disneyland
• ABC Owned Television • Disney Cruise Line
Stations Group • Disney Vacation Club
• ABC Family • Adventures by Disney
• Disney Channels • Walt Disney Imagineering
Worldwide
• Hyperion Book s

10. Walt Disney Divisions Cont.
The Walt-Disney Studios Disney Consumer Products
• Walt-Disney Studios • Disney Licensing
Motion Pictures • Disney Publishing
• Marvel Studios Worldwide
• Touchstone Pictures • Disney Store
• Disneynature
• Walt Disney Animation Disney Interactive Media
Studios Group
• Pixar Animation Studios
• Disney Music Groups • Disney Online
• Disney Theatrical Group • Disney Games

11. 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."

12. Proposed Vision
Walt Disney strives to be the world’s
most famous entertainment
company by creating an amazing
experience for individual of all ages.

13. 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
HISTORY
creative, 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.

14. SWOT
Analysis

15. 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

16. 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

17. 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

18. 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

19. 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 Walt-
Disney expenses due to their large amount of employee.

20. External Audit

21. CPM
Media Network Segment
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
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

22. Positioning Map
Media Network Segment

23. Positioning Map
Park and Resorts Segment

24. EFE

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

26. Organizational Chart
Theme Parks & Resorts
International
ABC Television Group
Co-Head Interactive
Co-Head Interactive & Playdon
Human Resources
Motion Picture Distribution
Communication
CEO Stategy and Business Development
Government Relations
Disney Consumer Products
ESPN & ABC Sports
ESPN & Disney Media Networks
CFO
Legal and Secretary
CID
Security

27. Financial Trends
Book
Price/ Price/ Net Profit Value/ Debt/ Return on Return on Interest
Avg P/E Sales Book Margin (%) Share Equity Equity (%) Assets (%) 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 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

28. Income Statement
(in Millions, except per share data) 2009
Revenues $36,149.00
Costs and expenses $(30,452.00)
Restrucuring and impairment charges $(492.00)
Other income (expense) $342.00
Net interest expense $(466.00)
Equity in the income of investees $577.00
Income from continuing operations before income taxes and minority interests $5,658.00
Income taxs $(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

29. Balance Sheet

30. Balance Sheet
Cont.

31. Selected Financial Ratios
2009 2008
Liquidity Ratios
Current Ratio 1.33 1.01
Quick Ratio 1.19 0.91
Leverage Ratios
Debt-to-Total Assets Ratio 1 1
Debt-to-equity Ratio 1.12 1.93
Long-term debt-to-equity Ratio 0.1 0.12
Times-Interest-earned Ratio -12.14 -14.13
Activity Ratios
Inventory Turns 28.44 33.67
Fixed Assets Turnover 1.11 1.2
Total Assets Turnover 0.57 0.61
Profitability Ratios
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
Growth Rations (yearly)
Sales -4.48% 7.66%
Net Income -25.30% -5.55%

32. IFE

33. Strategic Formulation
“I do not like to repeat successes, I like to
go on to other things.”
Walt Disney

34. SWOT Matrix

35. Space Matrix
Results

36. Strategies:
Space Matrix
Market Development
Market Penetration
Product Development
Forward Integration
Backward Integration
Horizontal Integration
Related Diversification
Unrelated Diversification

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

38. Strategies:
Grand Strategy Matrix
Market Development
Market Penetration
Product Development
Forward Integration
Backward Integration
Horizontal Integration
Related Diversification
Unrelated Diversification

39. BCG

40. Matrix Analysis

41. QSPM Matrix

42. QSPM Cont.

43. 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

44. 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

45. Projected Income
Statement

46. Projected Balance Sheet
Assets

47. Project Balance
Liabilities
Sheet

48. Project Financial Ratios
Liquidity Ratios
Current Ratio 1.33 0.51
Quick Ratio 1.19 0.46
Leverage Ratios
Debt-to-Total Assets Ratio 1 0.86
Debt-to-equity Ratio 1.12 1.84
Long-term debt-to-equity Ratio 0.1 0.26
Times-Interest-earned Ratio -12.14 -12.14
Activity Ratios
Inventory Turns 28.44 40.39
Fixed Assets Turnover 1.11 1.11
Total Assets Turnover 0.57 0.62
Profitability Ratios
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
Growth Rations (yearly)
Sales -4.48% 0.00%
Net Income -25.30% 0.00%

49. Evaluation
“You're dead if you aim only for
kids. Adults are only kids grown
up, anyway.”
Walt Disney

50. Stock Price Graph

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

52. 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.

53. 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.

54. 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

55. Questions

56. 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/press-
releases?tid=All&field_press_release_date_value[value][year]=2009&title=&page=3>