CASE STUDY IN MAC 116 BUSINESS POLICY

Disney

Submitted by: Debbie Diane D. Severino COMA 4 A

Submitted to: Mr. John Francis Tupas

January 14, 2012

I. INTRODUCTION The Walt Disney Company started with the Disney brothers, Mr. Walt and Roy Disney. It was founded on October 16, 1923 as the Disney Brothers Cartoon Studio. In, 1925 the name of the company was changed to Walt Disney Studio. The company came up with lots of cartoons to start with especially Mickey Mouse which emerged in 1928. The company continued to emerged as a business concentrated in cartoons, films and television until in 1955 when it ventured to creating theme parks starting from the Disneyland Park in California. In 1983, it began its venture in operating a cable network which is the Disney Channel and from there it venture to more types of entertainment and eventually expanded worldwide. For eight decades, Walt Disney Company has successfully established itself as a pioneer in the field of family entertainment. It operates using a strategic business unit (SBU) type of organizational structure having 4 SBU's namely Disney Consumer Products, Studio Entertainment, Parks and Resorts, and Media Works and Broadcasting. Disney is a huge, well-known and well managed diversified corporation and quite financially strong.

II. STATEMENT OF THE PROBLEM In the absence of a specific vision statement and a change in management, Disney faces the typical problems of a business in the entertainment industry like competition, demographic adaptation, large workforce and the like. But being a diversified company as it is today it faces more than that. Each segment has a different direction of its own and then every now and then they would venture to this, merge on that and compete even at a loss.

III. SWOT AND FINANCIAL ANALYSIS A. SWOT ANALYSIS Strengths 1. The company has a rich history and has a long experience in the entertainment industry 2. The company has a strong and well known brand name 3. The company has a strong financial condition as found in its financial statements 4. It has succeeded in expanding into different ventures and places across the globe Weaknesses 1. The company does not have a stated vision statement 2. Some segments seem not keeping up with the growth of other segments and experiencing decline in revenues. 3. It is highly diversified 4. Some sectors within segments tend to affect one another and may lead to a domino effect when one goes down. Opportunities 1. The consumer demand for entertainment is growing 2. The availability of digital technology 3. The company can expand to foreign markets with high demand 4. The acquisition of small but highly potential ventures 5. The opportunity of having allies in the industry Threats 1. The company has to compete in the world market but at the same time experiences extensive competition in the local market 2. The Internet, though a factor that helps in one of its segments, it is also a threat due to cases of copyright infringement. 3. The presence of demographic changes and strong cultures worldwide

B. FINANCIAL ANALYSIS The following are some of the financial ratios as of 2007 and 2006 2007 Current Ratio Quick Ratio Cash Ratio Profit Margin Return on Assets Return on Equity .99 .76 .32 13% 7.69% 15.24% 2006 .94 .70 .24 10% 5.62% 10.60%

Walt Disney Company is financially sound, They are still able to pay back all short-term liabilities, and are financially leveraged to pay back their long-term debt. Based on revenue from 2004 to 2007 the company has grown. IV. CONCLUSION From the case, I have concluded that: 1. For a purpose to be done a company must have a vision that will be everyone's goal where actions will be taken to keep themselves committed on the strategies despite the cost. 2. The foreign market is like one big jungle to conquer and that you have to become flexible to achieve success in that sector. 3. It is not enough to focus on one venture alone but a company leader should know how much it could handle and manage. 4. In the midst of diversity, although there are differences, there can still be unity.

V. RECOMMENDATIONS Out of the case study here are the following recommendations 1. It is timely that the new management should state a vision that would motivate everyone in Disney company to continue the legacy focusing on its roots and its strengths and somehow re-establish itself in some areas and it may let go of weak ventures. 2. Disney is trying to restructure their theme park division, and maybe since the studios and the media segments seem to be alike they company may merge it. Similarly it can help them to join the forces of the moving visual media especially of the television, films and animation together with the news and broadcast to make better entertainment media to share to the whole world. 3. Disney can invest in their research and development and skills training to be more flexible in the operations since in the international market the demographics are different in each geographical location same as through with the laws and political statuses are different in each location and may change from time to time so the operations must be flexible. 4. It is till better to strengthen operations especially in the niche. But since the firm has also invested in international operations it must have some sort of a back-up plan in case a fortuitous event happens. 5. Moreover, Disney should capitalize more on its strengths as a pioneer in the entertainment industry and continue to innovate new products that would continue to attract its target market especially the foreign market and still maintaining quality.