Disney

[sharon...@ubs.com]

Everyone,

 

Instead of sending you a outline, I written up a draft of the case as it relates to the Core Competence Article. This is the supporting argument and I will type up the counter argument when I reach at school.  I will be concise with this piece.

 

Zara I saw your email. you guys really made head way. I will finish the counter argument and I will select from your outline which additional view point I will research. Just respond by email if anyone has picked a part as yet

 

Please give a quick scan.  I will not have email access for 2 hrs but if you need me my phone is 201-253-7999.

 

 

 

Thanks

[Venkat Kalyan]

Please find attached the financial information as in Exhibit 1.  Idid thetotal on operating income andrevenues through the spread sheet. They match the exhibit on most columns.

 

The Net Income did not match - may be since we dont know what the taxes are and maybethey left out certain expenses.  We may have to cook them up.  Maybe add a new row called other expenses and add in taxes at 40% of Net Income. I forget the formulas but Chirag can you fill themup.  You know this better.

 

So, we getsomething like  ( Revenues - Expenses Given - Other Expenses ) * 60% = Net Income.  I dont know if you guys did something similar yesterday or i am missing something.

 

Also, operating margin = NI / Revenues is also not matching up.  I am certain i am notusing the right numbers in this case.  For our analysis, I dont hink it makes sense to copy these numbers from the exhibit.  So, Chirag can you work on this further.

 

Thanks

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[chirag mehta]

yes...I wld work further on it... .

 

- there were some typo in exhbit 1... when we did y'day... we realized dt...we gonna use the excel #....

 

- I wld work on the trends in operating mrgn & sales... numbers wld prove dt...even though 'Media Network' is doing well for last 2 years ( thx to who wants to be a mili)... their core business are getting hurt... so it will justifiy our "central issue"...actually vince & I did it much of it y'day....but stupid laptops of school...deleted  it when I logged off for taking lunch...my bad....I shld have sent it as e-mail....

 

- Also, I am thinking of analyzing the problems with ROE... I will use 5 factor DuPont formula for analyzing it..if I find all the inputs...great..or I wld do some assumptions to get it...it is vry popular in W St... and I am sure Prof. wld love it as he like numbers...

 

- and if enough information is available I will use EVA...Economic value added...it will be a strong point in favor of our "central issue"...but lots of assumption goes there...as we don kno the cost of capital for firm....i wld try to derive it for Pre ABC...then check it whether any EV is added or destroyed...I am sure Michael Eisner destroyed it... ha ha ha ;-)

 

Let us see...hw much I can find n work....I will send it by late evening...as I am studying for CFA L 2 rite now...

 

Also, I can work on alternatives...if any one is working on itt..great....I will add my thoughts in it....

 

Thanks,

chirag

[Zara Massey]

sounds great...Chirag I was wondering if it might be possible for you (based on any ratios maybe) to find out the weakest part of Disney's business and the strongest part..maybe some of our arguments could hinge on that. Just an idea...you dont have to do it.

Thanks

Zara

[chirag mehta]

Yess.... Dupont analysis is exactly... a combination of 5 ratios..which affect the profitability of the firm...

 

...you can say..it is a derived ROE... so we wld know...wt they are good at n where can they improve....

 

Thanks,

Chirag

[Venkat Kalyan]

Guys,  i put together the Critical Issue and Rationale to the bestof my ability.  Please correct, change, add,massacre based on what you think best.

 

I will add theother portions and send it across.

[Venkat Kalyan]

Added some more content here,  please work onit further. I am going out and will come back and add some more for the Implementation Plan.

 

Venkat

 

 

----- Original Message -----

From: chirag mehta

To: bus92...@googlegroups.com

Sent: Sunday, April 26, 2009 11:23 AM

Subject: Re: Disney

[chirag mehta]

Venkat, I didn't find the basic data in 'excel'. Did you attach it?

 

I don't see it....please send the 'Excel' again...so I can work on it....

[Venkat Kalyan]

ok that will help

[Venkat Kalyan]

damn.i justnotice that i didnot attachthe excel sheet with this mail hope it is not too late.

[chirag mehta]

Thank you, Venkat.

 

Don't worry, its not too late.

I will take couple of hours to do some 'Financial analysis'. 

 

But, I may sleep at my ususal time of 11.30 pm. So, I will finish rest of the analysis tomorrow at job. I have couple of hours free in afternoon.

 

I studied your & Sharon's draft. Nice work. Once I derive at all the EBIT margin data & ROE synthesis, I would put add it at proper place. 

 

Also, I am planning to come early to school on Tuesday. May be by 5 pm...so we can practice....I wld not mind missing my 6 om class...if I have to...

 

Thanks,

Chirag

[sharon...@ubs.com]

I’m up as well and will do the same. I told Zara I will take a swing at alternative 1 and the disneys strongest businesses and its weakest.

 

 

 

---

ok that will help

<br

[Venkat Kalyan]

I added in the points for the Implementation section.

 

Of this first draft, financials, introduction/conclusion and alternatives 1 & 2 are left. Then, someone should polish and put it together.

 

Chirag is working on the financials.

Sharon I guess you are working on the other alternatives.

Zara/Vincent will you be able to pickup something.

 

And we need to put together the presentation.

 

Tell me if I need to pickup somethingelse. I can.

[Vincent Varghese]

Sorry for the late reply...I just added an introduction to the paper.  Please give comments or make changes you all see fit. 

[Venkat Kalyan]

Sorry. Here is the attachment.

[Zara Massey]

Im going through the paper...and am working on the rationale for alternative 3...as well as description of the other alternatives.

I was wondering if it would be better to redefine our central issue as "lack of a sustainable corporate strategy" instead of innapropriate because it did work for them up until the ABC thing. Just a thouyght.

Zara