Case Study Chase’s Strategy for Syndicating the Hong Kong Disneyland Loan

Disney’s long-run success is mainly due to creating value through diversification. Their corporate strategies (primarily under CEO Eisner) include three dimensions: horizontal and geographic expansion as well as vertical integration. Disney is a prime example of how to achieve long-run success through the choices of business, the choice of how many activities to undertake, the choice of how many businesses to be in, the choice of how to manage a portfolio of businesses and the choice of how to create synergies between those businesses (3, p.191-221). All these choices and decisions are

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.

Capital One was founded on the vision Richard Fairbank and Nigel Morris had regarding the potential profitability that could be made from customizing credit card products based. “Capital One now is one of the largest issuers of master card and visa credits in the world.” Recently, due to a new marketing campaign, Capital One predicts an increase in demand for fund loan approval. Based on the current levels of capacity, the loan department will not be able to accomplish their targeted goal of 700 applications per month. Our proposed plan is aimed at accomplishing a higher level of utilization and capacity through modifications on the current loan approval process. Since

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

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

On the other hand, from Chase's point of view, they should not alter any more of the covenants of the commitment letter. They have already been flexible enough with Disney in giving them most of their demands. However, they

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.

The case is related with a decision regarding The walt Disney Company’s relation with Pixar. Though, history defined their collaboration and success. Pixar’s CEO Mr. Steve Jobs has tried to negotiate the contract but with no success because The Walt Disney Company wants to stay with previous terms. This pushed Steve Jobs to find for partnership with others. This search is a big threat for The Walt Disney Company and it has to decide whether to acquire Pixar or not.

Disney continuously has to adapt to demographix changes in order to deliver products and services that match consumer preferences across countries, this is major in regards to the internet, which is a threat for Disney.

Another concern for Disney should be the fact that if the company sign the market flex terms, Chase would be over-charging underwriting fees which aim is usually to cover

Tokyo Disneyland was opened to the public on April 15, 1983. This amusement park was owned and operated by an unrelated Japanese corporation. The Walt Disney Company received royalties, paid in Yen, on certain revenues generated by Tokyo Disneyland. This new overseas business venture was bringing some concern about the foreign exchange risk to Disney. The management team at the Disney has been considering hedging future Yen inflows from Disney Tokyo since 1985. Mr. Anderson, the director of finance at The Walt Disney Company, focused his attention on a possible 15 billion ten-year term loan with an interest rate of 7.5% paid semiannually. On the other hand, Goldman Sachs, who had been working with

Overall Disney is in a better financial position than its competitors Time Warner and Fox. Disney’s financial ratios have been rising at a pretty consistent rate which shows Disney’s stability and

Wendy Beaumont, the company’s president is looking to further expand and has asked the advice of friend and financial consultant, Amy McConville to review a potential acquisition or partnership. The prospects will elevate some of the president’s concerns for financing. In her own words, Ms. Beaumont expressed that the cost of financing growth right now was high and Friendly Card's projects 20% growth over the next year and even more in subsequent years. Further stating, the company had never been without financing problems and had always been capital intensive relying on strong relations with its banks and suppliers in realizing success. Still, Friendly’s bankers have begun to feel uneasy regarding the company’s heavy reliance on debt capital to finance operations. The bank reminded the company they agreed to provide financing in 1986 with the expectations of Friendly Cards’ sales would decrease substantially in the future. The firm's liabilities/equity ratio had peaked to 5.2 in 1986, and was still a couple of years away from returning to historically lower ratios. As a result, the bank strongly suggested the company obtain alternative financing to support its forthcoming peak production season.

Initially Chase decided to Bid to lose because Disney had been their important client however the deal