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Strategic Initiative for Disney

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Submitted By annieb123
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Strategic Initiative Paper
Fin/370
March 6, 2013 Strategic Initiative Paper
Disney is always looking for opportunities to complement their operations in theme parks as well as movie production. This article will discuss Disney’s acquisition of Lucasfilm, a strategic planning initiative released in Disney’s 2012 annual report. The article will delve into how this acquisition affects the Disney’s financial planning; that is, how this initiative affects costs, how will the initiative affect sales, and the risks associated with the initiative and financial effects they may have.
What was the strategic and financial rationale for Disney’s purchase of Lucasfilm for $4 billion? As noted by Robert A. Iger, Chairman and Chief Executive Officer of the Walt Disney Company, the strategic acquisition of Lucasfilm provides tremendous new opportunities and creative potential across the entire company (The Walt Disney Company, 2012). The cornerstone of the purchase is Stars Wars franchise, which Disney has already announced plans to release a new feature film to continue the epic saga. Star Wars Episode 7 will be in theaters in 2015, with more feature films planned – along with television programming, games and merchandise, and an expanded Star Wars presence in our parks around the world (The Walt Disney Company, 2012). Disney CEO Robert Iger: "This is one of the great entertainment properties of all time, one of the best branded and one of the most valuable, and it's just fantastic for us to have the opportunity to both buy it, run it and grow it" (Krantz, 2012).
Disney’s purchase of Lucasfilm is their fourth largest deal ever. It's behind the $19.7 billion, $7.6 billion and $5.2 billion buyouts of Capital Cities/ABC in 1995, Pixar in 2006 and Fox Family in 2001, respectively, says S&P Capital IQ. It tops the $3.96 billion Disney paid for Marvel in August 2009 (Krantz,

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