presented by:sharon churchill neil fairman brenda michaud barbara munro joanne nichting
TRANSCRIPT
Presented By: Sharon Churchill
Neil Fairman
Brenda Michaud
Barbara Munro
Joanne Nichting
Disney’s $tructureEarnings
1996 Revenues were $18.7 billion1997 Revenues were $22.5 billion1997 Revenue from international
sources were $4.6 billion Solid financials
29% stock value increase since 1984
Disney’s $tructureHorizontal and Vertical
Diversification Strategy since 1983Now offer products ranging from
movies to television production to theme parks
Business Units
Filmed Entertainment Walt Disney Pictures Touchstone Pictures Miramax Buena Vista International Buena Vista Home Entertainment
Business Units
Creative Content Touchstone Television Walt Disney Television Walt Disney Television Animation Walt Disney Theatrical Productions Hollywood Records Mammoth Records
Business Units
ABC Television Network ABC Radio Buena Vista Television ESPN The Disney Channel A&E Network Fairchild Publications
Business UnitsTheme Parks and Resorts
Disneyland………………..California
Disney World……………..Florida Tokyo Disney……………..Japan Euro Disney……………….France
trengths
eaknesses
pportunities
hreats
The Disney Name/ImageFinancial BackingNew Management TeamNew Marketing Schemes
Disney Attitude/Values vs. European Taste/Ways
High Turnover European CultureOld Management Team had no
experience.
Great LocationNo Real CompetitorsNumber One Tourist Attraction in
FranceAdapting to European Consumers
Currency DevaluationVisitor Spending European EconomyHigh Interest Rates
StrategiesStrategies
Differentiation Strategy “Breathtaking Rides” Creative Attractions Disney Characters Catered to Customers
StrategiesStrategies
Cooperative Strategy International Cooperative
Strategy with the French Government
French Gov.. owns 51% stock
Beneficial Tax Breaks Land at rock bottom prices
ProblemsProblems Failed to accurately predict the
financial environment they would be inRecessionCurrency DevaluationLow spending visitors
recession currency devaluation culture high prices down real estate market soaring costs
StrategiesStrategies
Restructuring Strategy Replaced Chairman Downsizing
ProblemsProblems
Failed to address cultural issues
European Cultural Issues No Consideration for European
Tastes Smoking Frowned Upon The Disney “Look”
StrategiesStrategies International Strategy
Previous success in Tokyo Attracts larger body of customers Must adapt to different culture
advertising alcohol food holidays human resource practices reduce prices
Current FinancialAttendance
1995 up 21% to 10.7 million visitors
1996 up 9.8% to 11.7 million visitors
1997 up 7.7% to 12.6 million visitors
Current FinancialTheme Park Revenues
1995 rose 8.7% to $500 million
1996 rose 9.8% to $549 million
1997 rose 10.2% to $605 million
Quarterly Financial Statement
(In Millions) 19971996
Revenues $6,278$3,837
Operating Income 1,562863
Net Income 749 497
Earnings per share 1.09.93
Dividends per share .11 .09
Market price/share 7662 7/8
Changes in ManagementOpened six new attractionsChanged park name to
Disneyland ParisCut-rate entry & Off season ratesFrench human resource practicesNew Chairman Gilles Pelisson
Restructuring Debt
1994, Creditors offered halt on interest payment
Investment by Saudi Arabian Prince
Strategy of cost cutting Royalties begin in 1999
“EuroDisney was an ugly duckling in the beginning…
and Disneyland Paris is becoming a beautiful swan.”