Strategic Initiative Paper

1084 words - 5 pages

Strategic Initiative Paper
In this paper, the relationship will describe strategic planning and financial planning for Disney. The first section will cover Disney’s strategic planning initiative and identify a strategic initiative discussed in the organization’s annual report. This will be followed up with a description on how this initiative affects Disney’s financial planning. The next section will address how Disney’s initiative will affect the costs. The third section will discuss how Disney’s initiative will impact sales. The fourth section will describe the risks associated with the initiative and the financial impact that these risks have. This will be followed up with a conclusion. ...view middle of the document...

This strategy has netted additional big profit over operational revenues in addition to helping finance expansion into markets such as China. Finding and employing new sources of revenue is always difficult at best; however the Disney management team has done well by authoring a new revenue stream called “accumulated other comprehensive income” or (AOCI), which has provided further gains for the shareholder equity within the company.
Financial Planning
The Disney Corporation has a team of specialized accountants to deal with the risks
attached to foreign currency exchange. When Disney was considering its first theme park out of
the country this group was formed. Disney had distributed its films globally but nothing of the
magnitude of a theme park. Analyzes are run and foreign exchange rates are monitored daily for
any changes.
Risk management is an iatrical part of the foreign exchange rates and these figures can
change hourly in some cases. The accountants in this division of Disney are specialist in the field
of international financial management and a bachelor’s in this subject is required to work within
the accountant division of Disney.
When Paris Disney, Formerly Euro Disney, was first opened, the foreign exchange rate
risks were higher than today. During those first years Disney dealt with the exchange of other
European currencies to the Franc and then the equilivant to the dollar. The creation of the Euro
currency has made the process a little easier, because you only have to evaluate the Euro to the
dollar.
The Disney Corporation has always strategyly planned the financial areas of the company
for any contingency. The risk management steps for the foreign exchange risks has been
successful, and will continue to update the information to improve the transition of currencies

Cost Impact
Disney's management system to allocate hedges in dealing with risk of foreign currency exchange can help the company to avoid major losses and affects to the balance sheet. The strategy can create profit for the company and help them to expand into more foreign market areas. Hedging reduces the interest rate risk. Without hedging, earnings are affected by each interest rate fluctuation, and several hedging techniques available. Some choices will...

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