Slide1: Presented By: Sharon Churchill Neil Fairman Brenda Michaud Barbara Munro Joanne Nichting


Disney’s $tructure: Disney’s $tructure Earnings 1996 Revenues were $18.7 billion 1997 Revenues were $22.5 billion 1997 Revenue from international sources were $4.6 billion Solid financials 29% stock value increase since 1984


Disney’s $tructure: Disney’s $tructure Horizontal and Vertical Diversification Strategy since 1983 Now offer products ranging from movies to television production to theme parks


Business Units: Business Units Filmed Entertainment Walt Disney Pictures Touchstone Pictures Miramax Buena Vista International Buena Vista Home Entertainment


Business Units: Business Units Creative Content Touchstone Television Walt Disney Television Walt Disney Television Animation Walt Disney Theatrical Productions Hollywood Records Mammoth Records


Business Units: Business Units ABC Television Network ABC Radio Buena Vista Television ESPN The Disney Channel A&E Network Fairchild Publications


Business Units: Business Units Theme Parks and Resorts Disneyland………………..California Disney World……………..Florida Tokyo Disney……………..Japan Euro Disney……………….France


Slide9: trengths eaknesses pportunities hreats


Slide10: The Disney Name/Image Financial Backing New Management Team New Marketing Schemes


Slide11: Disney Attitude/Values vs. European Taste/Ways High Turnover European Culture Old Management Team had no experience.


Slide12: Great Location No Real Competitors Number One Tourist Attraction in France Adapting to European Consumers


Slide13: Currency Devaluation Visitor Spending European Economy High Interest Rates


Strategies: Strategies Differentiation Strategy “Breathtaking Rides” Creative Attractions Disney Characters Catered to Customers


Strategies: Strategies Cooperative Strategy International Cooperative Strategy with the French Government French Gov.. owns 51% stock Beneficial Tax Breaks Land at rock bottom prices


Problems: Problems Failed to accurately predict the financial environment they would be in Recession Currency Devaluation Low spending visitors recession currency devaluation culture high prices down real estate market soaring costs


Strategies: Strategies Restructuring Strategy Replaced Chairman Downsizing


Problems: Problems Failed to address cultural issues European Cultural Issues No Consideration for European Tastes Smoking Frowned Upon The Disney “Look”


Strategies: Strategies 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: Current Financial Attendance 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: Current Financial Theme 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: Quarterly Financial Statement (In Millions) 1997 1996 Revenues $6,278 $3,837 Operating Income 1,562 863 Net Income 749 497 Earnings per share 1.09 .93 Dividends per share .11 .09 Market price/share 76 62 7/8


Changes in Management: Changes in Management Opened six new attractions Changed park name to Disneyland Paris Cut-rate entry & Off season rates French human resource practices New Chairman Gilles Pelisson


Restructuring Debt: Restructuring Debt 1994, Creditors offered halt on interest payment Investment by Saudi Arabian Prince Strategy of cost cutting Royalties begin in 1999


Slide27: “EuroDisney was an ugly duckling in the beginning… and Disneyland Paris is becoming a beautiful swan.”