How This Initiative Will Affect the Organization’s Financial Planning

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New initiatives or the expansion of existing ones will always have an affect on the bottom line and will help to improve sales. When Disney focuses on planning, part of their planning strategy is to focus on projected future sales and the assets and financing needed to support those sales. “Disney strives to accomplish upcoming earnings growth to improve the company’s long-term competitive position. Strategic initiative can sometimes persuade upcoming returns; Disney assesses trends in financial metrics over time instead of looking only at short-term results” (Disney Strategic Initiative, 2011).

If our entertainment offerings and products do not achieve sufficient consumer acceptance, our revenue from advertising sales (which are based in part on ratings for the programs in which advertisements air) or subscription fees for broadcast and cable programming and online services, from theatrical film receipts or home video or electronic game sales, from theme park admissions, hotel room charges and merchandise, food and beverage sales, from sales of licensed consumer products or from sales of our other consumer products and services may decline and adversely affect the profitability of one or more of our businesses” (Walt Disney Company 10K, 2012). To gain advantage over competitors, Disney must have a strong and effective strategic plan that meets medium and long term objectives.

According to Clements (2013), the success of strategic planning is largely dependent on the success of financial planning. Without access to capital, plans cannot be put into action. So, if a company is relying on credit to finance an expansion, and suddenly credit is unavailable due to adverse market conditions, strategic planning will suffer. Likewise, if a company is depending on equity capital to fund its strategic objectives, it may be disappointed if cash is misappropriated, or if due to an emergency the capital must be allocated to more urgent matters. Furthermore, assumptions about profitability may be overly optimistic, thus there may be insufficient retained earnings available for re-investment in strategic objectives.

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