BA 405 Final Written Project and Visual Presentation

BA 405 Final Written Project and Visual Presentation

LINK TO SLIDES: https://docs.google.com/presentation/d/1zsek_-_SGbqAfXBVdg3Pr-5DqNGxmXF5wnWS0oRfTOQ/edit?usp=sharing

b. Highlight each question you want to address in bold italics which you will take from the Presentation Guidelines. c. Highlight each Chapter you will use to answer that question under the question also in bold italics. d. The objective of the answer is not to state “facts” so please do not puff up the report with unnecessary information. It is quality and not quantity that counts. e. Appendix of each student’s recommendations – will be graded independently for 1%.

BA 405 Final Written Project and Visual Presentation

The “ Language of the Course “ is extremely important. It demonstrates that you are able to grasp the concepts and apply them appropriately. Therefore,

Your written and oral presentation should incorporate as many “ key concepts “ from the Chapters we cover throughout the course. A partial list of terms are posted in the Glossary of Terms under Syllabus. This list is limited to Chapters 1-4. Please refer back to the text for terms from Chapters 5-7. Your grade for this assignment will depend on how well you integrate these terms into your final project.

Visual Presentation:

Your oral defense of your case on the designated day per the Syllabus will involve a visual presentation. No note cards will be allowed. One person from each team will be asked to present their slides in the class the day of the presentations. The presentation should not exceed 10 min.

Your team is required to use the 10K SEC Filing for your company as the only outside research tool. Each project must cite at least 5 quotes from this document.

1. Your visual presentation consists of 4 slides plus the cover slide. The Professor will ask one student from each team to present the case on behalf of their team. The format is as follows;

Cover Slide: Team names, photos, and company name

Slide # 1-2: List the Problems/Issues of the case ( Step 2 Below)

Slide # 3-4: List your Recommendations to address each problem ( Step 3 Below)

Use this template for your powerpoint only.

http://www.slidescarnival.com/william-free-presentation-template/1541

2. After both cases are presented by the selected individual from each team, both teams will come to the front of the class at the same time to answer questions by the Professor from the list of questions of each other’s team.

Written Presentation:

The written portion of your case will answer the following questions. Please use this outline as the format of your report. Cut and paste your answer below each question.

If your report has financial statements, you will be responsible for calculating the rations that the financials provide enough information to calculate.

The average length of the final project report is 24 pages, 1.5in. spaced not including the cover page.

Also, remember if your project has financial statements, you will need to include the ratio analysis as per the in-class assignment

Team 3

The Walt Disney Company:

Its Diversification Strategy in 2014

Brandy Seman

Gracie Pollard

Shabib Alajmi

Qian Ye

BA 405 Sloan

Summer 2018

A. External analysis of each company: ( Chapter 2)

1. General environmental factors:

a. What are the general or macro environmental factors impacting the industry?

Political factors, economic factors, social factors, legal factors and technological factors.

b. How are they likely to affect industry conditions?

Political factors are very important for Disney to operate in different countries. Different countries tend to have different political environment and political system risks. Disney company needs to analyze political stability and importance of entertainment, level of corruption, bureaucracy and interference in entertainment, trade regulations and tariffs related to services, pricing regulations, taxation, wage legislation, mandatory employee benefits, ect.

Economic factors, such as inflation rate, savings rate, foreign exchange rate and economic cycle, can determine the return of investment for company. Moreover, if a country’s economy is very bad, people are in high unemployment or have a very low income, they tend to spend less for entertainment.

Social factors can impact the culture of organization in an environment. The culture of organization is a important key to understand the customer behaviors in a country and design the marketing strategy for entertainment. Social factors of the Disney company need to analyze social factors, such as demographics and education level of the people, gender roles, leisure interest.

Technological factors is very crucial for Disney too. For example, transportation industry is part of technological factors. Good transportation structure can help Disney serve more customer because customers can go to there easily. High technology also can decrease the cost structure in entertainment and improve the service quality.

2. Industry analysis:

a. Use Porter’s 5 force model, industry life cycle , strategic group , and the (SW)OT analysis to understand the opportunities and threats in the industry. Keep in mind that whether each condition is a threat or opportunity will depend on each firm’s unique set of resources and competencies. So, identify the opportunities and threats confronted by each firm, and its key rivals.

Threat of new entrants in an industry can give pressure industry to establish reasonable price and provide more valuable products and service to the customers. Moreover, new entrants also bring innovation and change the way industry doing things in order to have more profitability. The entrance barriers to Disney are relatively high. Disney established long time ago and has been developing on past experience. It knows what its target customers wants and how to expand the market. Other cartoon figures, theme parks and movies can be the substitute for Disney Company. However, Disney’s uniqueness create the difficulties for its competitors to copy, so the threat of substitute is moderate. Disney is very large and an important customers for its suppliers. Disney can order large volumes of special products with high switching costs, so bargaining power of suppliers is high. The bargaining power of buyers is high in service and in entertainment industry because entertainment is not necessary part of life. If entertainment industry charge too much, customers are likely to refuse spending the money. Disney’s exit barriers is very high and expanded in very large investment. . Disney’s product is highly differentiated and thus the switching costs are quite high. The external forces like opportunities and threats are not easily to control, but Disney has to adopt it and learn to take advantage of those opportunities.

Disney’s strategic group has low-cost-corporate-strategy that can effectively control the cost and produce high qualities goods and service. From the text, we can tell Disney has many different businesses. Since 2014, Disney has been broadly diversified. Disney owned theme park, hotels and resorts, cruise ships, cable networks, broadcast television networks, television production, television station operations, animated motion picture production and distribution, music publishing,living theatrical productions, children’s book publishing, interactive media, and consumer products retailing. Moreover, Disney acquired many excellent company, such as Pixar, Playdom and UTV to expanded its company’s business areas. Even though Disney’s business is very diversified, all of its business share its resource and help each other to grow bigger. Corporate-level strategy can create value through diversification. However, if a firm desires to benefit from diversification, different business in the diversified corporation must be similar in at least one important way related to the core competence.The core competence can create value and lay the foundation for synergy among the business in a corporation. As a result, a related diversification can let a company benefit from horizontal relationships across businesses by sharing activities, intangible or tangible resources. Disney definitely is a perfect example of diversification. The theme park, hotels and resorts are popular because people love its television production, children’s book publishing, music publishing living theatrical production. People love Disney’s fairy tale and love story of princess and prince. Disney use its broadcast television networks and television station operations to reach more people and let more people love its television products, which is an example of a revenue increasing due to the differentiation strategy. Therefore, all of Disney business together build a healthy business cycle.

In the SWOT analysis, Walt Disney’s strength is its resources, experience in the business, and its low cost strategies. Moreover, Disney also spent many years to build its well-know brand name. Employees in Disney is very innovative and they create stable finance and economy for Disney. Disney has several external opportunities and those opportunities need to recognized. Those opportunities includes government’s positive attitude toward Disney’s operation, high barriers of entry. It is very hard for other company to imitate Disney because Disney has established many years and its movies and fairy tales are many people’s childrenhood, so Disney has many loyal customers. Furthermore, Disney is a gigant company with huge asset and effective business operation, therefore, other company has high barriers of entry and it is too costly to imitate Disney. The threats for Walt Disney company’s global operations. Even though Disney has a lot of experience, global operations still has high level of risk and only most powerful companies can survive in the end. The Walt Disney’s corporate level strategy is based on horizontal management approach. The management for Disney focus on teamwork and group creativity. The most creative and talented employees can meet the target by creating new ideas. On the other hand, it can be very costly to attract the best human capital.

3. How are they likely to affect industry conditions?

a. What are the immediate and long-term growth, product, and pricing trends in your industry?

b. Is market demand for your industry’s offerings growing, shrinking, or holding steady?

c. Is it easy or difficult for new competitors to enter your industry?

d. How fast are technologies, regulations, or other fundamentals of your industry changing?

e. Has your business adapted to changes in your industry, and how well are you prepared to adapt to the changes you see on the horizon?

f. How serious a competitive threat do you face?

g. Who really drives your industry: customers, distributors, or suppliers?

h. Will you be able to ride the rising tide of an expanding industry, or will you have to find ways to succeed in spite of a general industry slowdown?

i. Do you anticipate major transformations –– in technology, production processes, global influences, or customer buying patterns –– that could affect your competitive position and profitability?

B. Internal analysis: ( Chapter 3 and 4)

1. The company’s strengths and weaknesses SW (OT):

a. Perform a value chain analysis and conclude with a statement on how the company’s various components of its value chain are adding value to the firm?

Primary Activities:

Inbound Logistics:

Inbound logistics are associated with the receiving, storing, and distributing of inputs to the product. It includes material handling, warehousing, inventory control, vehicle scheduling, and returns to suppliers. When looking at this component of the value chain, Disney has many different methods involving inbound logistics due to its wide variation in products and services. However, it can be assumed that after many years of success, the general conclusion that Disney is prosperous partially due to their efficient and effective inbound logistics. One aspect of inbound logistics that is important to Disney is the consolidation of their suppliers. In the 10K, it is mentioned that:

Competition in each area of business may increase as a result of technological

developments and changes in market structure, including consolidation of suppliers of resources and distribution channels.

Operations:

Operations include all activities associated with transforming the final product form, such as machining, assembly, equipment, testing, printing, and facility operations. This is a difficult to assess because Disney’s operations involve many different processes among multiple industries. In the 10K, the major operations costs were described as follows:

The Company recorded $156 million, $53 million and $140 million of restructuring and impairment charges

in fiscal years 2016, 2015 and 2014, respectively. Charges in fiscal 2016 were primarily due to an investment impairment, asset impairments associated with shutting down certain international film production operations and severance and contract termination costs. Charges in fiscal 2015 were primarily due to a contract termination and severance. Charges in fiscal 2014 were primarily due to severance and radio FCC license impairments.

Outbound Logistics:

The activities of outbound logistics are associated with the collecting, storing, and distributing the product or service to buyers. They include finished goods warehousing, material handling, delivery vehicle operations, order processing, and scheduling. Delivery is probably the most complex component of outbound logistics that Disney must worry about. As technology progresses, means of distribution have changed immensely. Take their consumer products and interactive media for example. The 10K lists sources of revenue which can be looked at as ways Disney is distributing its products:

· licensing characters and content from our film, television and other properties to third parties for use on consumer merchandise, published materials and in multi-platform games

· selling merchandise through our retail stores, internet shopping sites and wholesale business

· sales of games through app distributors and online and through consumers’ in-game purchases

· charging tuition at English language learning centers in China

· advertising through the distribution of online video content

Marketing and Sales:

Marketing and sales activities are associated with purchases of products and services by end users and the inducements to get them to make purchases. They include advertising, promotion, salesforce, quoting, channel selection, channel relations, and pricing. Disney is fortunate enough to have made a name for itself over the years. The brand recognition and amount of exposure that the company has is astronomical. This component of the value chain is definitely one of Disney’s highest in value.

Support Activities:

Procurement:

Procurement refers to the function of purchasing inputs such as raw materials, supplies, machinery, laboratory equipment, and buildings. The means by which Disney accumulates these inputs are very important when it comes to being efficient and effective. One way that Disney has added value in this area is by acquisitions. Disney has had a number of beneficial acquisitions, and rather than starting these projects from scratch, they simply acquired them. This means they did not have to buy raw materials in order to make a building since they just bought what was already established.

Technology Development:

Every value activity embodies technology. Technology that is related to the product and its features supports the entire value chain, while other technology development is associated with particular primary or support activities. Disney’s approach to embrace technological change rather than keep its original tactics has proved beneficial to its overall company health. Not only have they been able to utilize technology in their product and service offerings, but also in their means of transportation, delivery, manufacturing, and other aspects of the value chain.

Human Resource Management:

Human resource management consists of activities involved in the recruiting, hiring, training, development, and compensation of all types of personnel. It supports both individual primary and support activities and the entire value chain. Being a company essentially revolving around the creations of many different artists and contributors, successful human resource management is crucial. The human resources of the company are directly correlated to their profits. Essentially, Disney cannot be successful if they do not invest in their strategies of attracting the right types of employees. For example, without CEO Robert Iger, Disney would have not acquired Pixar and Marvel- two brands that benefited the Disney brand globally.

General Administration:

General Administration consists of a number of activities, including general management, planning, finance, accounting, legal, government affairs, quality management, and information systems. One of the most influential factors in this area of activity is the licensing that goes on within Disney. From selling licenses to sell products with Disney’s creations, to licensing intellectual property to a third party to operate the Tokyo Disney Resort in Japan, a huge amount of revenue can be recognized from licensing. Apart from that, normal company general administration activities such as finance and legal also add value to Disney simply by keeping the company running.

Conclusion:

In conclusion, Disney adds unmeasurable value to itself by optimizing its strategies of all the primary activities. They also add value by improving their secondary activities and constantly evolving them. That is the key. Disney easily could have taken the approach to maintain its original strategies with the argument that it is a classic. However, it is their technology friendly approach and desire for growth that has allowed them to sustain their success.

b. What are the firm’s unique resources and capabilities?

Disney’s most unique resource is its brand recognition and reputation. According to the 10K, some revenues are generated from sponsorships and co-branding opportunities. The synergy among the varying subsidiaries is also a unique resource for Disney. For example, having over 100 Disney branded television channels, which are broadcast in 34 languages and 163 countries/territories can be very beneficial for them if they release a new movie. Another example would be how they use their theme parks to enhance the success of some of their movies.

Being such well-known and reputable company also makes them capable of opportunities that many other companies are not. For example, the acquisition of large companies such as Pixar would not even be a possibility for most. However, with the size of the company and their reputation, they are able to do so.

c. Perform a VRIN analysis

Valuable:

Resources are valuable when they enable a firm to formulate and implement strategies that improve its efficiency or effectiveness. Disney has many valuable resources. From products, to services, to intellectual property, to brand recognition, etc. Disney is no doubt a valuable company.

Rare:

If competitors or potential competitors also possess the same valuable resource, it is not a source of competitive advantage because all of these firms have the capability to exploit the resource in the same way. Common strategies based on such a resource would give no one firm an advantage. For a resource to provide a competitive advantage, it must be uncommon, that is, rare relative to other competitors. Depending on which resource of Disney’s is being analyzed,

Inimitability:

This is a key to value creation because it constrains competition. If a resource is inimitable, then any profits generated are more likely to be sustainable. The inimitable component of Disney that has sustained profits is its brand. This was something that Disney had to create, maintain, and enhance over a long period of time. It is too complex to be imitated. There is not another company that creates movies, has theme parks, cruises etc. Universal Studios can be seen as a close competitor, but there are so many differences between the two that saying there is a way to copy Disney is not very likely.

Substitutes:

The final requirement for a firm to be a source of sustainable competitive advantage is that there must be no strategically equivalent valuable resources that are themselves not rare or inimitable. The analysis of Disney being substitutable is difficult to analyze. With it being in the entertainment industry, it is unknown what the next big thing will be that could be a substitute. Disney has strived to diversify itself in order to compete with other industry competitors such as when Netflix got big or when online or on the go television was introduced.

d. Can they be imitated? What are the barriers to their imitation?

Imitation is a major contributor to the decline in success of a company. If everyone can do it and in some cases do it better, the original business may get overthrown by its competition. However, there are some barriers these copiers must overcome in order to imitate. Special laws and regulations have been created to help a company from being copied. Disney has utilized copyrights, trademarks, and intellectual property right laws to help in keeping their success within their hands.

Another way in which Disney has tailored to this world of copying and competition is by selling licenses to their products and brands. By doing this, they accept that others are going to try to make money off of their ideas. This way, they at least get licensing fees and a cut of the profits so to speak. The physical uniqueness, path dependency causal ambiguity, and social complexity that Disney has implemented in their efforts has also made it a very difficult company to be imitated.

e. Provide financial ratios if financial information is provided in your case

f. Does the firm have a competitive advantage?

Because Disney has such a variety of offerings across multiple industries and is so different than most companies, it is difficult to summarize whether or not they have a competitive advantage. However, it can be concluded that they have a competitive advantage in some areas, and in others not as much. For example, their theme parks are valuable, rare, inimitable, and arguably unsubstitutable. On the other hand, their television channels are valuable, not rare at all, very imitable, and now substitutable. Therefore, Disney is successful in obtaining competitive advantages in numerous areas, but there is always room for improvement in others.

g. If so, what is the firm’s competitive advantage and how can it sustain it? Is it durable?

The firm’s biggest competitive advantage is its branding. A company’s brand can be shot to the ground in one instant. One bad publicity moment or wrongdoing can discredit the entire company. So, their competitive advantage is definitely not durable. However, in order to sustain it, many things need to be done besides preventative negative branding. The one thing the company must to to sustain this advantage is work to evolve it and keep it going. There have been many obstacles that have hit Disney. The reason for their continued success has ridden in their ability to see these obstacles as challenges and opportunities to not just continue efforts but to grow and become even more successful.

h. If it does not have one, how can it build a competitive advantage in its industry?

Being that Disney does have a competitive advantage, it can build a competitive advantage in other areas in which they are not as successful. However, it is unlikely that they will be the best at everything, so this is not something that they should be too worried about.

i. Human capital: does the organization effectively attract, develop, and retain talent? Does the organization value diversity? Does the company have underutilized human capital?

Human capital is a heavy contributor to the success of a company. This is exemplified by the replacement of Walt Disney’s son-in-law with Michael Eisner due to ineffectiveness. Eisner was also later removed due to micromanaging and skirting board approval for numerous initiatives. In order to attract human capital, Disney has strived to “hire for attitude, train for skill”. They develop their human capital by encouraging widespread involvement, implementing mentoring and sponsoring programs (such as selling their intellectual property to the Japan Disney park), monitoring progress and tracking development, and evaluating their human capital. Having Walt Disney himself start the company from the ground up was probably the most valuable human capital that Disney can attribute its success to.

j. Social capital: does the organization have positive personal and professional relationships among employees and alliance partners? Is the company missing opportunities to forge strategic alliances?

The idea that “teamwork makes the dream work” really is true. Having other companies on Disney’s side and alliances with other companies opens up many opportunities for both parties. In the 10K, many efforts to have good relationships with employees by providing benefits are explained. For it is true, success in the business world depends on how well one can “combine and leverage resources” or “create unique bundles”—not just the output from one’s individual efforts.

Having social networks that involve closure and bridging relationships are also beneficial to the company as a whole. These types of relationships can sometimes overcome barriers of collaboration. Effective collaboration involves overcoming four barriers: the not-invented-here barrier, the hoarding barrier, the search barrier, and the transfer barrier. One of the best ways to get over these barriers is by the unification lever. This is the method of making people more willing to collaborate by crafting compelling common goals, articulating a strong value of cross-company teamwork, and encouraging collaboration in order to send strong signals to lift people’s sights beyond their narrow interests toward a common goal. Disney clearly has company-wide common goals that can be achieved when everyone comes together. Other ways that Disney continues to overcome collaboration barriers is by implementing the people lever, network lever, and by cultivating T-Shape Management.

k. Technology: does the organization effectively use technology to transfer best practices across the organization, codify knowledge, and develop dynamic capabilities for competitive advantage?

When it comes to technology, Disney is very effective when it comes to using technology to transfer best practices across the organization, codify knowledge, and develop dynamic capabilities for competitive advantage. This is in part due to their strategy of embracing the change that comes with technology rather than seeing it as a threat or and end. In codifying knowledge, there are two different types of knowledge: tacit (embedded in personal experience) and codified (knowledge that can be documented, widely distributed, and easily replicated). A challenge of knowledge-intensive organizations is to capture and codify the knowledge and experience that, in effect, resides in the heads of their employees. This is a difficult task but with the company being so tacit knowledge driven due to the creativity that is what Disney is, it must be done and done well. Being dynamic when it comes to technology is also crucial. The 10K reads:

The Company’s businesses throughout the world are affected by its ability to exploit and protect against

infringement of its intellectual property, including trademarks, trade names, copyrights, patents and trade

secrets. Important intellectual property includes rights in the content of motion pictures, television programs,

electronic games, sound recordings, character likenesses, theme park attractions, books and magazines. Risks

related to the protection and exploitation of intellectual property

Developing dynamic capabilities is the only avenue providing firms with the ability to reconfigure their knowledge and activities to achieve a sustainable competitive advantage, so it is obvious that Disney is doing this well. Dynamic capabilities include the ability to challenge the conventional wisdom within a firm’s industry and market, learning and innovating, adapting to a changing world, and adopting new ways to serve the evolving needs of the market. If one were to look at the evolution of Disney and its capability to innovate and evolve and embrace technological change, one could say that Disney is very dynamic.

l. Does the firm have intellectual assets it can legally protect?

According to the 10K:

Important intellectual property includes rights in the content of motion pictures, television programs, electronic games, sound recordings, character likenesses, theme park attractions, books and magazines. The Company also licenses our intellectual property to a third party to operate the Tokyo Disney Resort in Japan, as well as recognizes revenue associated with the licensing of intellectual property. The businesses in the Studio Entertainment segment generate revenue from distribution of films in the theatrical, home entertainment and television markets, stage play ticket sales, distribution of recorded music and licensing of Company intellectual property for use in live entertainment productions.

As can be seen, Disney is highly reliant on their intellectual property for success, so there are many steps in place to protect these assets legally. In fact, without that ability, Disney would more than likely have not succeeded.

m. Has the company developed knowledge-management systems to capture what it learns?

Disney has data systems that maintain information not only on what it learns, but also personal information on employees. It is actually one of their risks discussed on their 10K:

Data maintained in digital form is subject to the risk of intrusion, tampering and theft. We develop and maintain systems in an effort to prevent intrusion, tampering and theft, but the development and maintenance of these systems is costly and requires ongoing monitoring and updating as technologies change and efforts to overcome security measures become more sophisticated. Accordingly, despite our efforts, the possibility of intrusion, tampering and theft cannot be eliminated entirely, and risks associated with each of these remain.

Although they are at a large risk with their digital means of storing data, it is useful when they can share company information and processes in order to develop a knowledge-management systems to capture what it learns.

C. Strategy of the company:

1. Business-level strategy: ( Chapter 5)

a. What is the firm’s generic business-level strategy?

b. How do the functional-level decisions and strategies contribute to its business-level strategy?

c. How do its resources and competencies contribute to its generic business strategy?

2. Corporate-level strategy: ( Chapter 6)

a. What is the firm’s corporate-level strategy? Related vs. Unrelated

Disney’s corporate strategies are (1) creating high-quality family content (2) exploiting technological innovations to make entertainment experience more memorable (3) expanding internationally. In the related corporate-level strategy, Disney acquired Pixar in 2006 and finished acquisition of Marvel in 2009 in order to enhance its resources and capabilities of its core animation business with additional of new animational skills. The acquisitions of Marvel and Pixar is an IP acquisition. As a result, Disney can provide its customers with more innovative and attractive products. For unrelated corporate-level strategy, the acquisition of Playdom enable Disney to have capabilities to join online gaming. Social gaming is becoming an important part of today’s market and it developing its domination at a very fast pace. The acquisition of Playdom helps Disney to join a new social space. Disney acquired UTV to help it exploit international opportunities. With UTV, Disney became the largest studio and significantly develop its distribution network in market. Disney’s corporation strategy gives its investor a lot of confidence and thus it attract enough capital to allocate its theme parks and resort business to sustain its advantage in the industry. From the exhibition 2, we can see that Disney company’s stock price performed very well in the past 10 years and increase 800 %, the growth of Disney company’s stock is much higher than that of its industry, especially after 2011. Form the growth of stock price, we can tell the acquisitions that Disney made help Disney to develop in a much faster way. The Walt Disney desires a synergics between its business units and wants to exploit opportunities in emerging market. In 2012, Disney Channel was available for more than 100 countries and own around 75 % of audiences in China and Russia.

b. If it operates in more than one business, do the businesses share or trade resources?

c. What are the connections among the different businesses?

The connections among Disney’s different business is that all of those businesses are in service and entertainment industries

d. What has been the primary mode of diversification –Acquisition, joint-venture, internal growth?

e. What is your assessment of its growth mode?

f. If the firm operates in one business, could it gain value through diversification?

g. If so, which businesses would you recommend and how can it create value?

h. What mode of diversification and growth would you recommend?

3. International Strategy: ( Chapter 7)

a. What strategic approach has the firm taken towards international growth –localization, global standardization?

b. Describe the nature of any challenges to expand internationally for the company.

c. What mode of expansion has it used? Licensing, Franchising, etc.

d. If it is a U.S company, what is your assessment of its international opportunities?

e. What strategy and mode of expansion should it use?

STEP 2: ISSUE SECTION: Clear statement of issues confronting the company ( 2 slides in visual presentation as well as in your written report)

Prioritize and list issues

· Changes in U.S., global, or regional economic conditions could have an adverse effect on the profitability of some or all of our businesses.

· Changes in public and consumer tastes and preferences for entertainment and consumer products could reduce demand for our entertainment offerings and products and adversely affect the profitability of any of our businesses.

· Changes in technology and in consumer consumption patterns may affect demand for our entertainment products, the revenue we can generate from these products or the cost of producing or distributing products.

· The success of our businesses is highly dependent on the existence and maintenance of intellectual property rights in the entertainment products and services we create.

· Protection of electronically stored data is costly and if our data is compromised in spite of this protection, we may incur additional costs, lost opportunities and damage to our reputation.

· A variety of uncontrollable events may reduce demand for our products and services, impair our ability to provide our products and services or increase the cost of providing our products and services.

· Changes in our business strategy or restructuring of our businesses may increase our costs or otherwise affect the profitability of our businesses.

· Turmoil in the financial markets could increase our cost of borrowing and impede access to or increase the cost of financing our operations and investments.

· Increased competitive pressures may reduce our revenues or increase our costs.

· Sustained increases in costs of pension and postretirement medical and other employee health and welfare benefits may reduce our profitability.

· Our results may be adversely affected if long-term programming or carriage contracts are not renewed on sufficiently favorable terms.

· \Changes in regulations applicable to our businesses may impair the profitability of our businesses.

· Our operations outside the United States may be adversely affected by the operation of laws in those jurisdictions.

· Labor disputes may disrupt our operations and adversely affect the profitability of any of our businesses.

· The seasonality of certain of our businesses could exacerbate negative impacts on our operations.

STEP 3: MAKE A SET OF RECOMMENDATIONS SUPPORTED BY YOUR ANAlYSIS: ( 2 slides in visual presentation as well as your written report)

Note: the solution you propose must solve the problem you identified. These are recommendations that the team has agreed upon after reviewing individual recommendations from each team member as per the Appendix.

1. Your recommendations are considered new ” strategies” that must match up with each of the problem issues of the case. State which issue it is solving in both your powerpoint and your written section

2. Make sure your recommendations follow the guidelines as stated in the article ” What is Strategy ” in that they are not just operational changes meaning performing similar activities better than rivals. “It is performing different activities from rivals or performing similar activities in different ways.” pg 8-9 in text. Please refer back to article ” What is Strategy” by Michael Porter posted under Syllabus.

3. Your recommended strategy should lead to a Sustainable Competitive Advantage which is defined by the VRIN

4. Measured against the company’s current strategy

5. Each student will submit a minimum of one page typed single space of their recommendations for the issues agreed upon by the team. This will be your appendix for the final team project report.

Appendix to final report

Each student will submit a minimum of one page typed single space of their recommendations for the issues agreed upon by the team. This will be your appendix for the final team project report.


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