Company:The Walt Disney Company 500 South Buena Vistahttps://thewaltdisneycompany.com/Ticker Symbol:DISTraded Since: November 12, 1957Industry:Entertainment-Diversified9524228600Key Statistics
Market Capitalization:170.43BLatest EPS:5.35Dividend yield:1.37%Debt/Equity Ratio:0.43Debt Rating:A2Beta:1.4687Current Price:103.270138430
Chairman and CEO- Robert A.IgerChief Operating Officer- Thomas O. StaggsChairman- Andy BirdSenior Executive Vice President- Alan BravermanBOARD OF DIRECTORSChairman and CEO- Robert A.IgerSusan ArnoldJohn S. ChenJack DorseyMaria Elena LagomasinoFred H.LanghammerAylwin B.LewisRobert W. MatschullatMark G.ParkerSheryl SandbergOrin C. Smith
New Events Impacting Company
Walt Disney company-Dubai bans 50 hazardous toys. The toys to be banned either contained sharp objects or were small to extend that it can be ingested. All the materials that could not withstand the regular wear and tear were disposed. The step taken by the company to ban the toys that do not meet the municipals standards will impact the company positively. There would be increased number of customers who would want the services of the company since they will be confident on the safety they will get.Walt Disney Co defended themselves from the charges imposed to them by the EU on the anti-competitive movie licensing deals. The company is accused of preventing consumers outside Britain and Ireland from accessing films that are being broadcasted by the British pay TV. The outcome of the case will have an impact on the image of the company. There is need for Walt Disney to ensure they win the case and protect the image it has created all over the world.
The company offers media networks that include broadcast, cable, radio, publishing and digital business. Business divisions are across two division that are ABC Television and ESPN Inc. Walt Disney services is provided in the entertainment industry. The company is in B2B markets. The market growth of Walt Disney is expected to grow by 13.01%.
1 Disney/ABC Television Group.
2. ESPN, Inc.
3. Lucas film Ltd LLC
4. Marvel Entertainment Ltd.LLC
The Walt Disney being a company in the entertainment industry faces competition from Viacom Inc., Time Warner Inc., Twenty first century fox, CBS and Comcast. Walt Disney market share is estimated at 31.6% when compared with other companies in the industry. The insider ownership is an advantage that is making the Walt Disney Company to outperform its competitors. The company has been making acquisitions as it make diversification. The adopted by the company of insider buying give a competitive advantage of the company since the management will be focused in ensuring flawless operations in the company.
The priority is to be the most leading entertainment to provide quality. In its mission at the companys website its mission is to be the worlds leading producer and provider of entertainment. The mission can only be provided only through producing quality services through innovation that can serve its customers well. The Walt Disney has faced challenges such as being accused of not allowing users in Britain to access some channels and of late the issue of safety of on the parts of toys that are used in parks.
Going to Market
The company uses marketing intermediaries to market its products to its consumers. The intermediaries and travel agents ensures that its customers enjoy services from the Walt Disney Company. Thompson and virgin are the major intermediarys partners of Walt Disney. The company has tried to use Facebook, twitter and google+ but failed. These strategies within this networks is more of direct or one on one channels. These channels tries to provide great and regular content but the content is more of the same. On the part of the audiences it becomes difficult and irritating to receive marketing messages from the three social media sites. Something that need to be noted is that there is little engagement between the company and the large communities that have been created on the three channels.
Return on Marketing Spend
Comparison of Walt Disneys growth rate with its competitors in the industry.
The profits of Walt Disney is affected mostly from the increased competition from sports competitors. When a comparison for Walt Disney is evaluated the company reported an increase in in the last quarter of 2015 of 13.84% but most of the company competitors have experience a downwards experience by averagely -2.01%. The competitive advantage the company is having over its competitors is that the company has had contractual agreements with a number of networks that distribute MVPDS. This has resulted to an increase in profits. The market conditions in the industry gives the company a competitive advantage since it has been able to diversify to different networks. The brand strength such as the theme parks and resorts not forgetting Disney cruise line and the Disney vacation entertainment give the company an upper hand when competing in the market.
Walt Disney outsourced workers from the immigrants population to work for the company. The financial decisions that have appeared in the news is the idea of replacing the current employers with immigrants. The company has been accused of colluding with the USA government to replace its employees with immigrants who are deemed to provide cheap labor. It is claimed that the company collaborated directly with to replace Americans with H-1B workers. The company decision to lay off most workers did not work well. Walt Disney do not have a diversified supplier base it is mostly domestic based.
Walt Disney has an employee capacity that is well versed with protecting the company brand. The main objective of the company is to satisfy the shareholders financial needs and to do so depends on how the workforce of the company operates. The largest operation sector of Walt Disney is the media networks. This segment make up for the companys operations networks, broadcast television networks and its digital operations. The second largest operation machinery that brings in revenue to the company are the parks and resorts. The iconic assets of the company are the castles, hotels, and cruise ships. The properties of Disney Company are developed with an amusement parks. The Walt Disney is another important segment of the enterprise.
Walt Disney forecasts for the next year.
The forecast technique used give the best results since it focuses on one parameter, which is the sales of the company. The price targets for 2017 shows that the company has a target median of 108.5 and its highest estimate being 130.00 and a low of 88.00. The median estimate therefore becomes 5.43% representing an increase in price bring us to predict an increase in 2017.
The Walt Disney must invest in some physical resources that the company must invest so as to maintain its competitive advantage in the industry. The company runs theme parks and resorts. The company should ensure that all the materials and resources used within the parks like toys and castles are performing as per the standards and that it should not pose threat to users like children who visit the parks. The company operates a chain of hotels and therefore there is a need for the company to invest in security apparatus like the CCTV cameras. This is to monitor businesses in the hotels and hence ensure that the company provide security to its customers. The tradeoff between the highest and lowest investment for Walt Disney is $35.68.
Over the past two years Walt Disney has not put in place any share repurchase over the past three years, the company has been making profits but still pays its shareholders pittance. It has maintained its policy of paying investors.
2014 Q42015 Q12015 Q22015 Q32015 Q4
Risk & Return
Standard Deviation of Returns:
Beta estimaste over the three horizons differ since its estimation is a regression analysis. During different periods of the years a Company would experience different levels of risks hence the difference. Beta is used in estimating the tendency of risk returns to responds to changes in the market. The estimates for beta for the three horizons is above an indication that the walt Disney is in consistence with the industry volatility.
Buy recommendation. Basing on the moving average convergence is -3.7. This though does not mean the stocks should not be bought. The stock price target for Walt Disney is $112.46 with its median target estimate being $112. Therefore the company is trading at a discount of 20% with respect to its median warranting a buy.
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