Week six critics – Urgent
1. Completeness of Portfolium profile
2. Correctness (absence of errors such as typos or spelling errors)
3. Incorporation of quality artifacts
4. Research on the basics of e-portfolios and importance today of networking sites
Instructions:
Create a PowerPoint presentation to relay findings to your classmates. Your presentation should be 8-10 slides in length.
In your presentation you must include the following:
· Title slide
· Agenda slide
· At least four content slides
· Reference slide with a minimum of 5 sources
· Questions slide
Detailed speaker notes should be provided in the speaker notes section of the slide
Portfolio Project: The Walt Disney Company
Kenya N. Shiloh
American Military University
Nov. 17, 2019
Author Note
This paper was prepared for BUSN601: Global Management Perspective, taught by Dr. Bob Barrett.
The Walt Disney Company has fascinated people young and old for many years. e because of their high-quality entertainment and commitment to family. Given one of the Walt Disney Company’s goals is to provide quality entertainment to families to bring them closer together, it is no question why this company was chosen for this project. For example, Forbes (2016) ranked The Walt Disney Company the company as the number eight company on the World’s Most Valuable Brands list and number 58 as one of America’s Best Employers. Also, because of its diverse business portfolio, the company is a solid investment at $114.44 per share for anyone looking to invest in a multimedia entertainment company, according to the New York Stock Exchange website (2017).
This paper will touch on several topics regarding The Walt Disney Company. Subjects include the company’s global business foundation and environment, its business strategy and organizational structure, as well as how it manages its business interests worldwide.
Foundations of Global Business
The Walt Disney Company, originally founded as The Disney Brothers Studio in 1923, has parks and resorts, a cruise line, retail stores and product manufacturing facilities all over the world. Three of the major countries the company operates out of include the United States, Japan and France. The company also opened resorts in Hong Kong and Shanghai, China. However, for the purpose of this paper, the focus will be on the United States, Japan and France.
All three countries are members of the International Monetary Fund (IMF), the World Bank and the World Trade Organization (WTO), according to the IMF (2017), World Bank (2017) and WTO (2017) websites. The United States joined these organizations in 1945, 1944, and 1995, respectively; while Japan joined the IMF and the World Bank in 1952, and the WTO
in 1995. France also joined these organizations in 1945, and 1995. These countries strive to follow the guidelines appointed by the three international institutions, in addition to promoting globalization while maintaining a transparent political and judiciary system, according to the State Department Bureau of Economic and Business Affairs Investment Climate Statement (2016). The climate statement (2016) also noted that France, which is part of the European Union, promotes free trade. The country recently reduced some business taxes businesses, and encouraged international startups in the country by offering benefits such as residency permits. Additionally, French companies work with Transparency International to discourage/avoid corruption in foreign investment. Japan, on the other hand, is focused on internal Foreign Direct Investment and has more restrictions on foreign companies engaging in transactions on a continuous basis. Also, there are some restrictions on foreign ownership of Japanese companies.
The Walt Disney Company owns parks and resorts in Japan and France, and encompasses a wide variety of products and services to include: film, digital, entertainment and learning products, published materials, and cruise line, according to The Walt Disney Company website (2017). With such a diverse portfolio of products and services that are distributed and sold throughout the world, The Walt Disney Company may face trade barriers such as import/export tariffs in the certain markets. For instance, a Global Trade Website Market research report (2010) states that France puts a 5-17 percent tariff on goods and services, while Japan has low-tariff to non-tariff barriers. The United States also puts a 4.7 percent tariff on imported toys. However, since The Walt Disney Company is based in the United States, this
may not affect its profits. In addition to tariffs, there are regional trading blocs the company faces to include the Trans-Atlantic Trade and Investment Partnership (TTIP), and the Trans Pacific Partnership Agreement as stated in the Global Trade website Japan Trade Barriers Report (2010). However, the U.S. officially withdrew from the Agreement in January 2017. France is also a member of the European Union (EU) trading bloc, the EU promotes the free flow of goods and services within its 25-member countries as stated by a Trade Policies and Regulations in France report (2011). Given the vast amount of goods and services the Walt Disney Company provides, it would thrive under the World Trade Organization’s policies and regulations.
Global Business Environment
Previously, the only country that could be a political and/or economic risk to operate in was France. However, the United Kingdom’s decision to exit the EU may have caused some turmoil with the other member countries. Many people believe there will be a domino effect and other countries will attempt to leave the EU. Since France is one of the founders of the European Union and is a staunch supporter of the Euro, it is unlikely France will follow in the United Kingdom’s footsteps. France is also a civil law country that follows the Code Napoleon, adapted from principles of Roman Law, according to About France (2019). Syam (2013) noted that Japan also operates as a civil law country. Knowing that each country’s legal system operates under codified law can work to the company’s advantage because it has a good chance protecting its intellectual property from fraud and copyright infringement.
Although The Walt Disney Company is a multi-billion-dollar company with foreign direct investment in China and France, and a licensing agreement in Japan, there is no evidence that the company purchased U.S. Overseas Private Investment Corporation (OPIC) insurance according to the OPIC website (2016).
The website (2016) states that corporation offers political risk insurance to companies who have an interest in emerging markets and want to protect their assets. Even if The Walt Disney Company did not purchase OPIC insurance, it does have intellectual property protection and merchandise licensing on all of its products, as stated on the company’s 2016 Annual Financial Report. Additionally, The Walt Disney Company does not provide any expiration dates on its properties, but discusses risk factors that could affect the company’s profit margins (pp. 15-20).
Because the company operates in the foreign market, it made its entry via two direct methods. First, the company has a licensing agreement with Japan for the Tokyo Disney Resort and earns royalties and revenue from Oriental Land Co., Ltd. who owns and operates the resort (p. 11). Disney also has a direct investment in the Hong Kong Disney Resort with a 47 percent stake, a 43 percent interest in the Shanghai Disney Resort, and an 81 percent interest in Disney Land Paris as stated in the 2016 Annual Financial Report (pp. 10-11). Given the Walt Disney Company’s foreign direct investment and licensing agreements, the company does not seem to have an exit strategy in place. The Annual Financial Report makes no reference to a possible exit strategy, but focuses more on increasing the company’s foreign investments (2016, pp. 10).
Because of its investment in these foreign countries, the company has a strict policy on how it will conduct business on the foreign market. In its Code of Business Conduct and Ethics for Directors (2017), directors must not accept bribes, kickbacks or improper payments related to the business dealings of the Walt Disney Company and is at low risk of facing any corruption issues. This is especially important in Japan where the country has some severe laws against corruption, and has been known to fine and/or imprison company directors who take bribes according to the according to the State Department Bureau of Economic and Business Affairs Investment Climate Statement (2016).
In addition to fighting against corruption, the company is highly involved in helping to preserve the environment. It publishes an annual Corporate Citizenship Report (2016) that covers its philanthropic and environmental programs it is involved in throughout the world. The report describes the company’s continued efforts to combat childhood obesity and encourage healthier lifestyles, reduce its footprint on the environment by promoting and using alternative energy, and improving the work conditions in facilities that produce Disney products around the globe (pp. 2-4).
Global Strategy and Organizational Structure
The Walt Disney Company is based out of Buena Vista, California, and fits the definition of a stateless corporation due to its global interests. The company has more than 6,000 facilities that manufacture, distribute or sell Disney-branded products, according to The Walt Disney Company Facility List (2016).
According to the Walt Disney Company website (2017), the company’s mission is “to be one of the world’s leading producers and providers of entertainment and information.” The
company developed a strategy to accomplish this mission by focusing its portfolio of brands to by develop the most creative, innovative and profitable entertainment experiences and related products in the world (2017, para 1). Based on The Walt Disney Company’s annual investment reports, citizenship reports, and internal policy letters, the company can be categorized as a shareholder model company which uses a hybrid structure. The reason being, the company is set up divisionally because of the myriad of products and services it provides (i.e. parks and resorts, studio entertainment and consumer products and interactive media); and functionally based on its various committees such as the audit committee and compensation committees according to the Walt Disney Company (2016) website. The Walt Disney Company has benefitted and continues to benefit from the hybrid structure according to J. Gaspar, A. Arreola-Risa, L. Bierman, R. Hise, J. Kolari, L. & Smith (2014). Based on its far reach into countries like China and its revenues from products and services sold online and worldwide in addition to its entertainment interests, the matrix structure would not support the company’s vast interests. The company claims to be committed to its stakeholders, and maintains a reputation for being a good corporate citizen. However, its primary allegiance is to its shareholders. A Walt Disney Company 2017 Proxy Statement outlines the company’s overall financial performance and shareholder proposals.
Managing Global Business
In order to keep The Walt Disney Company’s operations running smoothly and its focus on entertaining its guests at various parks and resorts throughout the world, the company hires local residents in those countries. The Walt Disney Company provides education and internships
for its foreign employees through its International Program according to the Disney Careers website (2017). There are several sub programs within the Disney International program that include academic exchange, cultural exchange, and the cultural representative program. Most exchange employees go through training at The Walt Disney World Resort in Florida. However, the Japan/Disney Vacation Club (DVC) Program offers online classes and work-integrated training opportunities, according to the Disney Careers website (2017). It is unknown whether The Walt Disney Company offers training and support during the repatriation phase.
As stated previously, the company is ranked number 58 as one of America’s Best Employers according to Forbes (2016). But it wasn’t always this way. According to Acuna (2019) in 1941, the company went through an Animators’ Union strike which shut down production for five weeks following the release of “Snow White and the Seven Dwarfs.” It is unknown whether the company still has a labor union. However, The Walt Disney Company does follow strict guidelines based on its International Labor Standards when producing apparel, toys, electronics, food, home goods, personal care and books, according to The Walt Disney Company website (2017). These products are sold worldwide at “retail stores operated under the Disney Store name and through internet sites in North America, Western Europe, Japan and China,” according to The Walt Disney Company 2016 Annual Report (p. 14).
Most, if not all of the company’s products and services are promoted on television, social media, and through the mail. Depending on the location, the company may advertise a specific park or resort in that country. The company also owns various broadcasting networks that are seen in more than 150 countries according to the Walt Disney Company 2016 Annual Financial
Report (pp. 2-3). None of this would be possible without the many distribution channels it has for its studio entertainment division, according to the 2016 Annual Report (p.12). Additionally, the company partners with more than 34,000 suppliers and manufacturing facilities and distributors in more than 100 countries throughout the world as stated by The Walt Disney Company International Labor Standards page (2016, para. 2).
Though the company does practice global procurement, and uses thousands of facilities across the globe to produce its products, The Walt Disney Company does not own these facilities, according to The Walt Disney Company International Labor Standards page (2016, para. 1). The Walt Disney Company Strategic Sourcing and Procurement section on the Supply page (2017, para. 2-3) states the company partners with suppliers to create a mutually beneficial relationship “to establish the best value for The Walt Disney Company” (2017, para. 2). The value of the product would vary depending on the location and the exchange rate for that country.
Conclusion
There are several reasons why anyone would work for and/or invest in The Walt Disney Company. The reasons range from the company’s vast enterprise that includes entertainment, parks and resorts, and interactive media to the foreign direct investment. Other reasons include partnerships and environmental and philanthropic programs established with manufacturers and suppliers throughout the world, as well as its commitment to improving international labor standards in all the facilities that produces the company’s products. Lastly, the company strives to make family its number one priority by becoming the leading producer of family entertainment and information throughout the world, according to an Annual Report (2017).
References
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