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.”