Return on Assets, Gross Profit Margin, Net Margin, Sales Growth and Operating Cash Flow for Disney

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Question

Explain changes in return on assets, gross profit margin, net margin, sales growth and operating cash flow for Disney FROM YEAR TO YEAR using any of the concepts/theories listed below (choose concepts/theories from list below, use at least one concept/theory). Make sure you consider the mergers and acquisitions that Disney made and alliances that Disney entered. How did they affect Disney’s performance from year to year? Bullet points are preferred.
You must explain the changes year by year. Please use format below:
2012- explain changes in ROA using concepts/theories AND mention mergers/acquisitions (Lucasfilm)
2013- explain changes in ROA using concepts/theories
2014- explain changes in ROA using concepts/theories AND mention mergers/acquisitions (Maker Studios)
2015- explain changes in ROA using concepts/theories
2016- explain changes in ROA using concepts/theories
Mergers and Acquisitions
2012- Lucasfilm (film and television production company) in the amount of $4.05 billion
2014- Maker Studios (global digital media brand and the original creator network) in the amount of $500 million
Concepts/Theories
Competitive Attack
First-mover
Late-Mover
Horizontal Merger and Acquisition
Vertical Integration Strategies
Outsourcing
Porter's Diamond of National Competitive Advantage
Exchange rate shifts
Impact of Government Policies and Economic Conditions in Host Countries
Cross-country cultural or market conditions
Entering and Competing in International Markets
International Multi-domestic strategy
International Global Strategy
International Transnational Strategy
Using location to build competitive advantage
Profit Sanctuaries and Cross-Border strategic moves
Business Diversification
Building Shareholder
Business Diversification
Ethical Universalism
Ethical Relativism
Ethical standards for strategy
Corporate Social Responsibility
Environmental Sustainability
Strategic Vision
Competitive Weapons
Competitive Pressure
Company's competitively important resources and capabilities
Competitive deficiencies
Company internal strengths
Value chain activities/competitiveness
Low cost provider competitive strategy
Broad differentiation competitive strategy
Focused low cost competitive strategy
Focused differentiation competitive strategy
Best cost provider competitive strategy

Solution Preview

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The Return on Assets (ROA) was 7.37% for Walt Disney in 2012 and this increased to 8.10% in 2013. This can be explained by the acquisition of Lucasfilm which was the owner of the popular Star Wars franchise. This strategy was a type of horizontal merger that helped Disney to use its existing asset base for enhancing sales from Star Wars franchise which led to increase in Return on Assets. The ROA continued to increase to 9.32% and 10.36% in 2014 and 2015 respectively due to development of innovative marketing strategies by the company. Disney had been using the strategy of differentiation to offer unique products to the consumers and gain competitive edge over the competitors. Over the period, it was also able to successfully integrate the operations of Lucasfilm with the parent company which further provided boost to the ROA since it strengthened the position of the company in the competitive market. The operating effectiveness of the assets kept increasing over 2012 – 2015 as it invested in unique differentiating strategies to digitalize its marketing mix for the targeted consumers....

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