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Michael Ovitz And The Walt Disney Co A Case Study Analysis

Michael Ovitz And The Walt Disney Co A is presently one of the most significant food cycle worldwide. It was established by Ivey in 1866, a German Pharmacist who first introduced "FarineLactee"; a combination of flour and milk to feed babies and decrease mortality rate. At the same time, the Page bros from Switzerland also found The Anglo-Swiss Condensed Milk Company. The 2 became competitors at first however later merged in 1905, leading to the birth of Michael Ovitz And The Walt Disney Co A.
Business is now a global business. Unlike other international business, it has senior executives from different countries and attempts to make choices thinking about the entire world. Michael Ovitz And The Walt Disney Co A currently has more than 500 factories around the world and a network spread across 86 countries.


The function of Business Corporation is to boost the quality of life of individuals by playing its part and providing healthy food. While making sure that the business is being successful in the long run, that's how it plays its part for a much better and healthy future


Michael Ovitz And The Walt Disney Co A's vision is to offer its consumers with food that is healthy, high in quality and safe to consume. Business envisions to establish a well-trained workforce which would help the business to grow


Michael Ovitz And The Walt Disney Co A's mission is that as presently, it is the leading company in the food industry, it believes in 'Great Food, Good Life". Its mission is to provide its customers with a range of options that are healthy and finest in taste as well. It is concentrated on providing the very best food to its consumers throughout the day and night.


Business has a vast array of items that it provides to its consumers. Its products include food for infants, cereals, dairy items, snacks, chocolates, food for pet and mineral water. It has around 4 hundred and fifty (450) factories all over the world and around 328,000 staff members. In 2011, Business was listed as the most gainful company.

Goals and Objectives

• Keeping in mind the vision and objective of the corporation, the business has actually laid down its objectives and objectives. These goals and objectives are noted below.
• One objective of the company is to reach no land fill status. (Business, aboutus, 2017).
• Another objective of Michael Ovitz And The Walt Disney Co A is to waste minimum food throughout production. Most often, the food produced is squandered even prior to it reaches the consumers.
• Another thing that Business is dealing with is to enhance its product packaging in such a way that it would help it to minimize the above-mentioned problems and would also ensure the shipment of high quality of its items to its customers.
• Meet international requirements of the environment.
• Construct a relationship based upon trust with its consumers, service partners, workers, and federal government.

Critical Issues

Recently, Business Company is focusing more towards the method of NHW and investing more of its earnings on the R&D innovation. The country is investing more on acquisitions and mergers to support its NHW technique. The target of the business is not attained as the sales were anticipated to grow higher at the rate of 10% per year and the operating margins to increase by 20%, provided in Display H.

Situational Analysis.

Analysis of Current Strategy, Vision and Goals

The existing Business method is based on the idea of Nutritious, Health and Wellness (NHW). This strategy handles the concept to bringing change in the customer preferences about food and making the food stuff healthier worrying about the health problems.
The vision of this technique is based upon the secret approach i.e. 60/40+ which just indicates that the products will have a rating of 60% on the basis of taste and 40% is based upon its dietary value. The items will be produced with additional dietary worth in contrast to all other items in market getting it a plus on its dietary content.
This strategy was embraced to bring more delicious plus healthy foods and drinks in market than ever. In competition with other business, with an objective of retaining its trust over consumers as Business Company has actually acquired more trusted by customers.

Quantitative Analysis.

R&D Spending as a portion of sales are declining with increasing actual amount of costs shows that the sales are increasing at a higher rate than its R&D costs, and enable the company to more spend on R&D.
Net Profit Margin is increasing while R&D as a percentage of sales is declining. This indicator likewise shows a green light to the R&D costs, mergers and acquisitions.
Financial obligation ratio of the business is increasing due to its spending on mergers, acquisitions and R&D development rather than payment of financial obligations. This increasing financial obligation ratio position a hazard of default of Business to its investors and might lead a declining share prices. For that reason, in regards to increasing financial obligation ratio, the company needs to not invest much on R&D and needs to pay its existing debts to decrease the threat for financiers.
The increasing threat of financiers with increasing financial obligation ratio and declining share rates can be observed by substantial decrease of EPS of Michael Ovitz And The Walt Disney Co A stocks.
The sales development of business is likewise low as compare to its mergers and acquisitions due to slow understanding building of consumers. This slow growth also prevent company to more spend on its mergers and acquisitions.( Business, Business Financial Reports, 2006-2010).
Note: All the above analysis is done on the basis of computations and Charts given up the Exhibitions D and E.

TWOS Analysis

TWOS analysis can be utilized to obtain various techniques based upon the SWOT Analysis provided above. A quick summary of TWOS Analysis is given in Exhibit H.

Strategies to exploit Opportunities using Strengths

Business ought to present more innovative items by large quantity of R&D Costs and mergers and acquisitions. It could increase the marketplace share of Business and increase the earnings margins for the company. It might likewise supply Business a long term competitive benefit over its competitors.
The worldwide expansion of Business need to be concentrated on market capturing of establishing countries by expansion, bring in more clients through consumer's commitment. As developing nations are more populated than industrialized countries, it might increase the client circle of Business.

Strategies to Overcome Weaknesses to Exploit Opportunities

Swot AnalysisMichael Ovitz And The Walt Disney Co A ought to do careful acquisition and merger of companies, as it could impact the client's and society's understandings about Business. It needs to acquire and combine with those companies which have a market reputation of healthy and healthy business. It would improve the perceptions of customers about Business.
Business needs to not just invest its R&D on innovation, instead of it must likewise focus on the R&D spending over assessment of cost of numerous nutritious products. This would increase expense effectiveness of its products, which will result in increasing its sales, due to decreasing prices, and margins.

Strategies to use strengths to overcome threats

Business should move to not just developing but also to developed nations. It should widen its circle to numerous countries like Unilever which runs in about 170 plus countries.

Strategies to overcome weaknesses to avoid threats

Michael Ovitz And The Walt Disney Co A needs to carefully control its acquisitions to prevent the threat of misconception from the customers about Business. It ought to acquire and merge with those countries having a goodwill of being a healthy company in the market. This would not just enhance the understanding of consumers about Business however would also increase the sales, profit margins and market share of Business. It would likewise make it possible for the company to utilize its prospective resources effectively on its other operations rather than acquisitions of those companies slowing the NHW method growth.

Segmentation Analysis

Demographic Segmentation

The group segmentation of Business is based on 4 factors; age, gender, earnings and occupation. For instance, Business produces several items related to babies i.e. Cerelac, Nido, and so on and associated to adults i.e. confectionary products. Michael Ovitz And The Walt Disney Co A items are rather economical by almost all levels, however its significant targeted consumers, in regards to earnings level are middle and upper middle level customers.

Geographical Segmentation

Geographical division of Business is composed of its existence in nearly 86 countries. Its geographical division is based upon two primary aspects i.e. average income level of the consumer along with the climate of the area. For instance, Singapore Business Company's division is done on the basis of the weather of the region i.e. hot, warm or cold.

Psychographic Segmentation

Psychographic division of Business is based upon the character and life style of the customer. Business 3 in 1 Coffee target those clients whose life style is rather hectic and do not have much time.

Behavioral Segmentation

Michael Ovitz And The Walt Disney Co A behavioral segmentation is based upon the attitude understanding and awareness of the customer. Its highly healthy products target those clients who have a health conscious attitude towards their intakes.

Michael Ovitz And The Walt Disney Co A Alternatives

In order to sustain the brand in the market and keep the client intact with the brand name, there are two alternatives:
Option: 1
The Business needs to invest more on acquisitions than on the R&D.
1. Acquisitions would increase total possessions of the company, increasing the wealth of the business. Nevertheless, spending on R&D would be sunk cost.
2. The company can resell the obtained systems in the market, if it stops working to execute its method. Nevertheless, quantity invest in the R&D could not be restored, and it will be thought about completely sunk expense, if it do not offer prospective results.
3. Spending on R&D offer sluggish development in sales, as it takes long time to introduce a product. Acquisitions offer quick outcomes, as it supply the company currently developed item, which can be marketed soon after the acquisition.
1. Acquisition of business's which do not fit with the company's worths like Kraftz foods can lead the company to face misunderstanding of consumers about Business core values of healthy and healthy products.
2 Large spending on acquisitions than R&D would send a signal of business's inadequacy of establishing ingenious products, and would results in consumer's frustration too.
3. Large acquisitions than R&D would extend the line of product of the company by the products which are already present in the market, making company not able to present new ingenious products.
Alternative: 2.
The Company should spend more on its R&D instead of acquisitions.
1. It would enable the company to produce more ingenious items.
2. It would provide the company a strong competitive position in the market.
3. It would enable the company to increase its targeted clients by introducing those items which can be provided to an entirely new market segment.
4. Ingenious products will supply long term benefits and high market share in long run.
1. It would reduce the profit margins of the business.
2. In case of failure, the entire spending on R&D would be considered as sunk cost, and would affect the business at big. The threat is not when it comes to acquisitions.
3. It would not increase the wealth of business, which might supply a negative signal to the investors, and might result I declining stock prices.
Alternative 3:
Continue its acquisitions and mergers with substantial costs on in R&D Program.
Vrio AnalysisPros:
1. It would permit the business to introduce new innovative products with less risk of converting the spending on R&D into sunk cost.
2. It would supply a favorable signal to the financiers, as the overall properties of the company would increase with its considerable R&D spending.
3. It would not affect the earnings margins of the business at a large rate as compare to alternative 2.
4. It would offer the company a strong long term market position in terms of the business's total wealth as well as in regards to innovative products.
1. Danger of conversion of R&D costs into sunk cost, greater than alternative 1 lower than alternative 2.
2. Danger of misunderstanding about the acquisitions, higher than alternative 2 and lesser than option 1.
3. Introduction of less number of innovative items than alternative 2 and high number of innovative items than alternative 1.

Michael Ovitz And The Walt Disney Co A Conclusion

RecommendationsBusiness has stayed the top market player for more than a decade. It has institutionalized its methods and culture to align itself with the market changes and consumer behavior, which has ultimately permitted it to sustain its market share. Though, Business has actually established significant market share and brand name identity in the urban markets, it is recommended that the company needs to concentrate on the rural areas in terms of establishing brand loyalty, awareness, and equity, such can be done by producing a specific brand allocation strategy through trade marketing tactics, that draw clear distinction in between Michael Ovitz And The Walt Disney Co A products and other competitor products. Michael Ovitz And The Walt Disney Co A needs to leverage its brand image of safe and healthy food in catering the rural markets and likewise to upscale the offerings in other classifications such as nutrition. This will allow the company to develop brand name equity for newly introduced and already produced items on a greater platform, making the efficient usage of resources and brand name image in the market.

Michael Ovitz And The Walt Disney Co A Exhibits

PESTEL Analysis
Governmental support

Altering standards of global food.
Boosted market share. Changing perception towards healthier products Improvements in R&D and QA departments.

Introduction of E-marketing.
No such effect as it is favourable. Concerns over recycling.

Use of sources.

Competitor Analysis
Business Unilever PLC Kraft Foods Incorporation DANONE
Sales Growth Greatest because 9000 Highest possible after Organisation with much less development than Business 5th Least expensive
R&D Spending Highest possible considering that 2008 Highest after Organisation 3rd Lowest
Net Profit Margin Highest possible given that 2004 with rapid growth from 2004 to 2015 As a result of sale of Alcon in 2013. Practically equal to Kraft Foods Unification Nearly equal to Unilever N/A
Competitive Advantage Food with Nutrition and health variable Highest number of brand names with sustainable practices Biggest confectionary as well as processed foods brand name on the planet Largest dairy items and mineral water brand name worldwide
Segmentation Center and also top center level customers worldwide Individual clients together with household team Any age and Income Client Groups Center and top middle level customers worldwide
Number of Brands 4th 2nd 9th 2nd

Quantitative Analysis​
Analysis of Financial Statements (In Millions of CHF)
2006 2007 2008 2009 2010
Sales Revenue 59869 275162 643597 123839 247211
Net Profit Margin 2.41% 7.91% 93.18% 7.85% 28.62%
EPS (Earning Per Share) 32.69 7.35 8.71 1.97 76.58
Total Asset 951357 635375 363836 556551 39653
Total Debt 15216 23233 18891 18841 31388
Debt Ratio 98% 91% 35% 99% 18%
R&D Spending 9459 9539 1189 4121 6963
R&D Spending as % of Sales 1.49% 3.67% 7.27% 4.54% 4.48%

Executive Summary Swot Analysis Vrio Analysis Pestel Analysis
Porters Analysis Recommendations