Managerial Finance Background Information About Company

Question :

Provide short background information on your favourite company. 

A description of its products, customer base, major suppliers.

Major events during the past three years.

Answer :

As comes to its products Disney had created a hub “Disney Parks, Experiences and Products” which is the globally accepted hub which work on the Disney’s stories, characters and franchises which has various theme parks, resorts and cruise and other products starting from toys to apparel and books to video games. As talking to its products and services Disney offers a one stop shop for Disney licensees, offering news and other at DisneyLicensing.com and when comes to its retail sector “The Disney store” is now worldwide available which operates at more than 300 stores in North America, Europe and Asia and one more is the world’s largest publisher of books, magazines related to children named “Disney Publishing Worldwide” which had licensing structure in approx.. 70 countries and about 50 languages. Now comes to its supplier which is major software companies, communication and mass media companies, advertising companies and e-commerce companies like Microsoft Corporation, Cisco systems, Dish Network Corporation and Amazon com Inc. After this comes to its major events like what was the acquisitions and divestments structure in past three years so the acquisitions were BAMtech in 2017 which Disney bought its 75% values of shares to support their future streaming platforms and the valuation was approximately more than $2.58 billion and recently the acquisition was 21st century fox in 2019 to increase its film and television library (Krafczyk, 2019). When comes to its divestment recently it acquired 21st century fox for which it has to divest approx. its 21 Regional Sports Network to Sinclair Broadcast Group. Now we need to know about what strategy the company is following and what strategies is its tool to success so strategies are ‘Product differentiation – known as Porter’s model which involves unique and new product offered to market, Product Development – which involves offering new products to company’s existing markets, Market Penetration strategy – which involves increment in the sales of existing product in current market of the company, Market Development – which requires introduction of existing products to newly markets, Diversification – which involves acquiring new business across world, SWOT analysis -  which involves bifurcation into areas of company like what are the strengths, weakness, opportunities and threats and last which comes recently is strategic reorganisation of business into 4 segments like D2C; international; parks; consumer products; media networks; studio entertainments (Terry, 2016).

4.4 Comparison from comparable: 

The rivals of The Walt Disney is Warner Bros because both of them have same concept like animation themes, comics and games. When comes to comic books warner bros has publisher DC and Disney has Marvel and when talk about superhero movies and normal movies we knew Marvel of Disney is taking a lead but we can say that DC has no good movies they gave us greatest superhero movie till yet ‘The Dark Knight”, Superman. So when talk to both of them everyone knew both came in 1923 and rivalry began in 1930. From start Disney always took a step ahead like in starting they create Mickey Mouse family characters which is hit in current also among the children’s then and warner bros came late in the game so they were demolished in front of Disney because they took Looney Tunes character that was not hit then after this they came with mass hit Bugs Bunny which became so popular that it was saying that it is equal to Disney’s Mickey Mouse (Marazi, 2019). Then comes to superhero movies Marvel has Black panther, Thor, Doctor strange, Spiderman, Iron Man and DC has batman and superman and now come with wonder woman and Aqua man which was biggest hit. Today MCU which was owned by Disney is the biggest superhero franchise and suture also looks bright but DC created their own DC Extended universe with man of steel then Justice League which received negative reviews only Wonder Woman can call biggest hit both commercially and critically. And reason behind this disappointment is Warner Bros tried the same things with DCEU which they already tried with Looney Tunes and they made their characters with dark tones to achieve success in audience which did not work except 2 or 3 movies because big bunny were original characters but superman and batman had previous adaptions for example superman was optimistic superhero and this was great with Richard Donner’s film but Henry Cavil’s superman in DCEU was hardly difference between Ben Affleck’s Batman so superhero fans hated this so except wonder woman everything else is a ruin for Warner Bros. 

We can conclude that from above that Disney is moving a step ahead always from starting so Warner Bros is not a fear for Disney

4.5 Difference between your estimated stock price and its actual stock price:

Intrinsic method is the estimate of actual true value of the entity which was reflected by company’s stock price and Market value method is the current value of the company which was reflected by company’s stock price so market value can be lower or higher from intrinsic value as market value is actual stock price but intrinsic value is estimated stock price (Wibowo, Putra, Dewi, & Radianto, 2019).

Market value is commonly used in public traded company

Intrinsic and market value are two different methods to value a company 

Market value is simply a measure of how market values the company or how much it require to purchase it and it is easy to determine for publicly traded companies but more complex for private companies

Intrinsic value is an estimate of the actual price of a company which is separate or different from the market value

Intrinsic Value

It is the core value which is used for investors to analyse the company’s value and if it is higher than it is good for the company to invest in if it is higher than market for this we have to consider

Tangible and intangible factors for determining values and market analysis.

Market Value

It is the value calculated from its existing stock price and rarely reflects the actual current value of the company it is more of public sentiments then actual figure it all depends on supply and demand chain in the market and how eagerly investors are going to participate in the company’s future. One of the difficult factor is how to value illiquid assets such as real estate assets

The market value is generally higher than intrinsic value if there is strong investment demand which lead to overvaluation.

In the Walt Disney case market stock price is more than intrinsic stock price so it means is overvalues and we should invest in to get profit.

References

Carlsrud, S. (2018). The Walt Disney Company: A Financial Analysis. Carlsrud, S. .

do Patrocínio, R. F., de Almeida Souza, J. L., Santos, C. T., & Martins, K. S. (2018). The vision of the Disney World: an experience marketing study at The Walt Disney Company. Archives of Business Research, 6(9).

Forster-Smith, C. A. (2018). The Color of Creditworthiness: Debt, Race, and Democracy in the 21st Century . Doctoral dissertation, Johns Hopkins University.

García, F. J. (2017). The WACC. In Financial risk management. Palgrave Macmillan, Cham.

Kochnev, M. (2016). Companies ‘mergers and acquisitions in example of The Walt Disney Company and Pixar (Doctoral dissertation, Masaryk University, Faculty of Economics and Administration. Faculty of Economics and Administration.

Krafczyk, M. P. (2019). A media and entertainment colossus: the acquisition of 21st Century Fox by The Walt Disney Company. Krafczyk, M. P.

c Value With Stock Market Prices Using The Price Earning Ratio (Per) Approach As An Investment Decision Making Indicator (Case Study Of Manufacturing Companies In Indonesia Period 2016-2017). Aptisi Transactions On Technopreneurship (ATT), 1(1), 82-92.

Wojewodzki, M., Poon, W. P., & Shen, J. (2018). The role of credit ratings on capital structure and its speed of adjustment. An international study. The European Journal of Finance, 24(9), 735-760.

Zativita, F. I., & Chumaidiyah, E. (2019). Feasibility analysis of Rumah Tempe Zanada establishment in Bandung using net present value, internal rate of return, and payback period. In IOP Conference Series: Materials Science and Engineering. In F. I. Zativita, Materials Science and Engineering (pp. Vol. 505, No. 1, p. 012007). IOP Publishing.