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

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 l 29% stock value increase since 1984

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

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

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

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

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

trengths eaknesses pportunities hreats

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

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

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

§Currency Devaluation §Visitor Spending §European Economy §High Interest Rates

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

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

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  Restructuring Strategy  Replaced Chairman  Downsizing

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

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 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 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 (In Millions) Revenues$6,278$3,837 Operating Income1, Net Income Earnings per share Dividends per share Market price/share7662 7/8

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  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.”