Case Study: Chase’s Strategy for Syndicating the Hong Kong Disneyland Loan (a)

According to Carl Hiaasen, “The secret weapon is trust. Disney is the most trusted brand name in the history of marketing. It hooks us when we’re little and never lets go; this unshakeable faith that Disney is the best at knowing what’s best.”(13) It is time that this myth be shattered.

JPMorgan Chase is one of the oldest financial services company dating back over 200 years. It has $2 trillion in assets and operations in more than 60 countries. JPMC’s corporate strategy is it provides services and products in major capital markets. JPMorgan Chase, well known nationally and globally, is leading in investment banking, financial services for consumers, small business and commercial banking, financial transaction processing, asset management, and private equity.

Lower inflation makes the market more stable, enabling JPMorgan Chase customers to get credit at a lower interest rate. “Government green drive also opens an opportunity for procurement of J.P. Morgan Chase products by the state as well as federal government contractors.”, which means new tax policies may have a significant impact on the way they operate and provide new opportunities for more profitable capabilities for existing participants such as JPMorgan Chase. The new technology provides opportunities for JPMorgan Chase to implement a differentiated pricing strategy in new markets. This will enable the company to maintain its loyal customers with good service and attract new customers

Hightower brings broad career experience for this assignment for change. He has a professional background as a strategic manager. This position for Hightower came as a surprise. Hightower will face the challenge of being accepted as the leader to a very diverse market entrenched with managers. He cannot afford to fail in this initial stage. It will surely take away any opportunity of having any creditability. Hightower must be consistent in his actions.

NOW, THEREFORE, in consideration of the mutual promises herein set forth and subject to the terms and conditions hereof, the parties agree as follows:

To answer the main question of the case, we must think of the main problems that it faces. We need to find the solution for Bob Iger. What to do with Disney: to make some improvements in the existed company to compete better with Pixar, or to make a deal with another studio? Or should he work more with Pixar, or maybe just buy the whole company?

Disney’s tentpole strategy has been fairly successful throughout the Disney Studios lifetime. Even though this strategy worked in the past it may not be the best strategy moving forward, as there are advantages and disadvantages to this strategy. One advantage of this strategy is that the tentpole films attract movie going customers that think of the movies more as an event rather than just a film they want to see.“A $200 million movie is more likely than a $20 million movie to have elements that appeal to moviegoers--to have special value for them.”, said Horn. Just as with any bet, there could also be a risk and disadvantage. If the film fails, they would both have to take the fall instead of just Disney Studios. “When our

Introduction: The Walt Disney Company is on the threshold of a new era. Michael Eisner has stepped down from his position as CEO and turned over the reigns to Robert Iger. A lot of turmoil has been brewing through the company over the last four years; many people are hoping that this change in leadership will put Disney back on the road to success. Issues began around mid-2002; when declining earnings, fleeing shareholders, and

Disney’s acquisition of Pixar had both benefits and implications for both parties involved. By acquiring Pixar, Disney was given access to Pixar’s proprietary technology, which was an important factor, as well as access to new characters. These characters provided a new source of income for Disney, not just for movies, but also to use in theme parks, merchandise stores, etc., meaning new characters would supply immense revenue streams for Disney in several forms. Disney also gained strengthened market power, as acquiring one of their rivals would give them a competitive advantage and would simultaneously make them more powerful in the market. Additionally, Disney was never very successful with their animated movies, and acquiring Pixar would

5. Does Disney’s portfolio exhibit good strategic fit? What value chain match-ups do you see? What opportunities for skills transfer, cost sharing, or brand sharing do you see? Please be specific and explain why.

In addition, by having access to the Pixar brand and its characters, they would help to supplement Disney’s existing characters across its different businesses like theme parks, merchandise, and television, which provide more sales opportunities. Despite the dilution of Disney’s earnings per share, it is for the short-term. The acquisition fills a crucial strategic gap for Disney and can create long-term value for its shareholders. As such, Pixar is a “near perfect strategic fit” for Disney and hence should be acquired by Disney to remain competitive.

Disney has major competition from the media industry, competition is high for viewers with other television networks. This competition is also with satellite providers and several media networks to maintain a target audience.

Disney would increase the probability of a successful closure of the project. If the situation changes adversely for Chase, the bank has the possibility of renegotiating some aspects of the contract instead of pulling-out and ruin the execution of the project.

With the first opening of Tokyo Disneyland operated by an independent Japanese company and the inflow of Yen royalty receipts, the foreign exchange rate risk began to emerge. As the Yen depreciated, the revenues from the royalties were shrinking from 1980 to 1985. Therefore, the weak Yen had a negative influence on Disney’s total net income. We also know the goal of the firm’s management is to make the firm as valuable as possible, and then the firm should pick the debt-equity ratio that makes the pie as big as possible. Usually, the total value of the firm equals the sum of the total debt and total equity. (V=D+E). As shown in the right chart, we can clearly get a conclusion that an increase in total value of debt will increase the total value of Disney from 1983 to 1984. We can maximize Disney’s value by creating more value of the debt. If we expose the Yen debt to the risk of the fluctuation in Yen-dollar exchange rates, it would also have great impact on the total value of our debt and

After successfully acquiring sponsors for his Autopia attraction, a board member approached Disney, shook his hand and said “I have a question, what did we just buy?” (Bradt, 2015). The board member was more entranced by Disney’s charisma and enthusiasm than the idea he was actually pitching.