Strategic Initiative Paper “disney”
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Strategic Initiative Paper “Disney”
FIN 370
Strategic Initiative Paper “Disney”
This research has been done to point out strategic planning and financial operations associated with Disney. In addition, the research will show the correlation between strategic and financial planning. The up-front cost impact of the initial investment of the organization, sales, and the associated risks of the organization in terms of financial and strategic planning will be addressed. “Therefore, the financial planning process is a tool to prepare for future needs of working capital of the company.” (Titman, S., Keown, A.J., & Martin, J.D., 2011).
The purpose of strategic planning is to establish the direction of the organization and set goals that are aligned with the organizations core values and abilities. The application is ensured by the creation of an outline of how and when objectives will be carried out to determine who within the organization will implement various tasks. The purpose of financial planning is to determine how customers can earn enough money to meet their objectives, such as: have a comfortable retirement, funding for the education of their children, going on a trip or ensure their current lifestyle. The relationship of strategic and financial planning leads the company to meet its goals or objectives set by the management team and board members.
Proper strategic planning and financial planning will determine the way Disney will move forward over the coming years and what strategies to use to achieve success and longevity for the company. Strategic analysis is one step taken in attaining a solid plan. A few crucial steps in financial aspect of strategic planning are: the development of financial objectives, marginal courses of action, risk assessment, implementation of a financial action plan, and review of the actions taken. The report will review strategic and financial planning Disney examining the SECs annual report for 2010.
Section 2b-1
This segment of the report covers the time value of money, which is a key element of financial and strategic planning. Walt Disney Company understands the concept in order to achieve financial security exploiting this strategic ingenuity. Disney uses the time value concept to measure their goals in dollar amounts using five “variables” which are interrelated in any given circumstance. The present and future value, the total of compounding periods, the rate of interest, also the constant payment amount are the variables that measure the impact of the up-front cost to Disneys financial and strategic plans.
By analyzing the basic elements of time value of money, Disney can calculate the net value of an important project or change in strategy. To help determine the opportunity cost for this type of projects or strategies of the company may look to the future value of measuring and adjusting for inflation. After reviewing the statements of the last three years, the operating cost has increased by 2% from 2008 to 2009 and increased 6% between 2009 and 2010, the changes from 2008 to 2009 has shown that financial costs have increased but this increase can be contributed to a number of supporting factors. The weak U.S. economy, the war in Iraq and Afghanistan, the flow of all U.S. foreclosures related to the ability of consumers to spend money on theme parks, movies, leisure and vacations. Following these problems, Disney decided to change strategic planning and be more abundant in remodeling, new attractions and expand its market to attract these people who are affected by the effects of the economy. This strategy was based on its economic future to look long term and not short term as they used to.
Disneys strategic plan focuses on family entertainment and media; they divide their business into several segments, communications networks, parks,