BUS225_Project_One

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1 Project One: Executive Summary Deandre Turner Southern New Hampshire University BUS 225: Critical Business Skills for Success Evan Priesel September 18, 2023

2 Project One: Executive Summary Problem My company needs to diversify to increase business opportunities that can help the growth of our company's portfolio and increase revenue. Diversifying the company will solve revenue issues. There's a lot of quantitative data and qualitative data that will need to be researched on the old and new industry. It can start by looking into what consumer wants like car type, color, things it can do. When you look into these things, you can look for deeper research like the cost of car parts, what they're made up, manufacturing cost, and shipping costs. You can also predict and plan on parts that are replaced more frequent like tires and windshield wipers. You will also need to look at the gas prices and the new charging stations. Looking at all these things, you'll be able to see what is popular and can have revenue. Automotive Manufacturing Industry COVID did a number on a lot of companies and quarantining only increased the want to travel which was evident after vaccinations. People have slowly felt more comfortable going outside and the auto industry saw an increase in the need for vehicle repairs which increased spending on auto parts (McErlaine, 2023). The automotive industry in the U.S. is ever changing and with that comes challenges. The Federal Reserve is constantly raising interest rates due to high inflation causing slow production from manufacturers because of the imbalance of production and spending (Pantalon, 2023). There's also a low revenue growth, low outlier growth and low performance drivers (McErlaine, 2023). Even though revenue is low, the total value of the industry is high. We are looking at a $66.8bn in revenue with a $3.4bn in profit and a 5.1% in profit margin. As far as regions, the southeast region has the highest population of the other US regions which is beneficial for manufacturers needing labor and Mexico being closer makes it easier for these companies to trade (Pantalon, 2023). The Great Lakes Region is the historic home of auto manufacturing and they're still producing engines and parts while also having Canada as a trading partner due to its proximity (Pantalon, 2023). They have the highest percentage of revenue with Michigan and Ohio bringing in a combine 40% alone. The West region has a better advantage because it has Mexico and Asia as trading partners and California understands this advantage as they bring in 2% in revenue. According to MarketLine (2023), the oil and gas market grew by 62.3% in 2022 and they have forecasted a 23.9% growth by 2027. New cars (sedans, coupes, etc.) account for the auto industry's highest revenue share with a 59.9% revenue (Fine, 2023). However, hybrid and electric vehicles are increasingly becoming more and more popular with an annual 29.6% increase over the past five years, including a 24.7% rise in 2023 (Al Bari, 2023). The increase of charging stations have also made consumers shift to hybrid and electric vehicles.

3 There's been an increase in consumers going for environmentally friendly products and the government providing financial support to those companies which has led to an increase of electric vehicles (Pantalon, 2023). Manufactures have also increased in producing more efficient engines and increase in automation will make manufactures cut back on labor (Pantolon, 2023). Smaller vehicles like sedans and coupes make up a little over half of Wholesaling revenue and new light trucks and SUVs only have 20% revenue. However, with the rise of interest rates, consumers aren't active in purchasing more expensive vehicles (Fine, 2023). After the pandemic, consumers also haven't had the want to purchase a new vehicle but instead fix the one(s) they have. New Industry Walt Disney Co. has been around for year and are huge in different departments. They have part in the arts and entertainment industry and streaming services, as well as amusement parks in a global power. Disney has found great success in the movie world and in 2019, they released 6 movies that made more than $1 billion dollars (Wood, 2023). When it comes to Arts, Entertainement and Recreation, Disney is bringing in a $6.7bn revenue with a profit margin of 12.08% (Dalal, 2023). In amusement parks, Disney's revenue is $12.6bn with a profit margin of 27.12% (Le, 2023). Disney's value is trending by the companies they've acquired. The Star Wars franchise was ran by Lucasfilm and they acquired the company in 2012 which has allowed to expand their amusement park and thus growing their value. Disney is a growing industry. They not only focus on the children demographics but also adults. In 2019, they opened their Star Wars: Galaxy's Edge attraction to attract the adult fan demographic. The Walt Disney Company got 21st Century Fox in March 2019, increasing its collection of intellectual properties, and launched Disney+, in November 2019 (Rose, 2023). Walt Disney Co. has a lot of competition in a lot of different areas but they are ever growing. When it comes amusement parks, Disney's competitors are Universal Parks & Resorts, Seaworld, Six Flags and Cedar Fair (Le, 2023). Their Universal competitors are successful in the industry because they also have intellectual property rights on their brands and characters and they can use these to attract consumers (Le, 2023). What products or services are trending for this industry? Disney is trending in both the entertainment industry and parks. Diversifying with Disney can help our old industry if we focus on what can be provided for Disney's parks. Their amusement park revenue is $12.6bn with an annual growth rate of 4.7% (Le, 2023). They own and operate 7 amusement park and resort locations globally. They have acquired rights to trending products like Star Wars, Marvel and

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4 more. Their parks are constantly growing with the opening of the Star Wars: Galaxy's Edge in august of 2019. With Disney holding rights to so many companies, customer demands have increased. One area is the Marvel franchise and the demand to continue the story line. Avenger's: Endgame was a big box office hit. Their parks and resorts are also in high demand with the Orlando resort being the most visited tourist attraction (Dalal, 2023). Disney has changed and grown. In 2012, they acquired LucasFilm which had the rights to the Star Wars franchise. In 2018 they acquired 21st Century Fox and the remaining stakes in 2019. In the winter of 2019, they released their streaming services Porter’s Five Forces Analysis of the New and Automotive Industry New Industry Automotive Manufacturing Industry Rivalry among existing competitors Depending on what aspect of the company you're looking at, the competitors vary. If you are looking at their media and streaming services, Disney has 4 competitors; Viacomcbs Inc., Nbcuniversal Media, LLC., AT&T Inc., and Sony Corporation. Viacomcbs Inc captures 15.5% of the Market Share, Nbcuniversal Media, LLC captures 11.95%, AT&T Inc capture 9.8% and Sony Corporation captures 8.35% (Le, 2023). If you are looking at the amusement park industry, Walt Disney captures 49.1% of the Market Share, Nbc Universal Media, LLC, captures 23%, Seaworld Entertainment Inc, captures 6.9%, Cedar Fair, L.P. captures 6.58% and Six Flags captures 5.02% (Le, 2023). Competition in the amusement park industry is high. Smaller regional parks have to merge in There are so many competitors in the automotive industry. Ford Motor Co captures 37.14% of the market share, Honda Motor Co 16.24%, Toyota Motor 9.93%, General Motors Company 9%, Magna International 7.59%, MAHLE international 6.1%, Altra Industrial Motion 4.9%, Stellantis 3%, Agility Fuel Solutions .45%, Michigan Motor Exchange .01%, S&J Engines .01%, Promar Precision Engine Rebuilders .01%, and Texon Motor Center .01%. The competition level is medium but it is increasing. They do engage in price competition due to customers wanting a quality engine (Pantalon, 2023).

5 order to obtain capital resources and it's harder for new parks to compete with the larger parks like Disney and Universal (Le, 2023). In the media industry, the competition is also high to get blockbuster hits. Threats of new entrants to the market In the amusement park industry, the barriers of entry are high. A high investment is needed for initial construction which will require a sizeable amount of capital or outside investment that is needed in order to succeed (Le, 2023). Not to mention that the competition is high with Disney capturing almost half of the Market Share (Le, 2023). Concentration of the amusement park industry is high. Larger parks are constantly increasing their parks either with new construction or buying out smaller parks. There are so many other industries that are more prepared. The level regulation is medium. The Consumer Product Safety Commission (CPSC) has the authority over amusement ride. However, Missouri, Utah and Washington, DC are not required to have regular inspections. Some of the barriers that the company faces when beginning to supply engines to the automotive industry is looking is the high metal prices that raise input costs (Pantalon, 2023). There are smaller facilities that have to deal with the competition that make it harder for them to enter the engine market. The level of regulation is currently medium but increasing. The United States-Mexico-Canda Agreement (USMCA) minimizes trade barriers (Pantalon, 2023). There are many agencies that play a role in regulating the industry like the Environmental Protection Agency (EPA), the National Highway and Safety Administration (NHTSA) and social environmental consciousness will influence new and old regulations. Bargaining power of suppliers There are seven 1st tier of suppliers for Disney. They are confectionery, Beer, Wine & Spirits, Surveying & Mapping Services, Soft Drink, Baked Goods & Other Grocery, Construction & Mining Equipment, and Commercial Leasing. Their There two tiers of suppliers for the Automotive industry. The second-tier suppliers are the Iron & Steel, Aluminum, and Metal Stamping & Forging. The first-tier suppliers are ball bearing, screw, nut & bolt, and metalworking (Pantalon, 2023). There

6 second-tier suppliers are construction, hotels & motels, food service contractors, advertising agencies, and musical group & artists. The construction industry is closer to what our current industry matches with. Companies like Komatsu, Volvo, Liebher, Vermeer, Tigercat industries, and Ponsse are part of the construction industry for amusement parks as well as trucks and bus manufacturing, and manchinery, like Liebherr Group (Besdousis, 2023). Competition in this industry is low and steady. However, there can be some barriers with obtaining contracts. Also, wholesalers are the ones that have exclusive rights when it comes to the distribution of brand equipment in specific areas and that can increase competition. A good thing is that most of the regional wholesalers are owned and operated by the US (Berdousis, 2023). Due to all of these, some companies might have better supplies and can have a bargaining chip for who they sell to. Disney's Orlando location is located in Florida, which is the state with the largest host of industry operators in the southeast region (Berdousis, 2023). are many manufactures within the suppliers. Aluminum is becoming more popular due to it being lightweight, making it more efficient in container and automotive manufacturing which is hurting other producers, like steel. The barganing power will depend on the contract that is drawn but longer-term contracts help maintain steel prices and avoid fluctuations (Zambrano, 2023). At the moment, the increase in popularity for electric vehicles is creating a challenge for the suppliers (Torres, 2020). Threat of substitute products There are a lot of products emerging in the new industry, especially when it comes to technology. There is a low level of rate of new patents and concentration of patents which Electric vehicles are increasing becoming popular. General Motors saw the change and invested $7.7 billion for electric pickup trucks, and they have plan to invest more into electric vehicles (Garnsey, 2019).

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7 makes the disruption of new technologies low (Le, 2023). Other products are similar across the industry and the competitors like food and beverages and similar rides. However, Disney has intellectual property rights of its film and entertainment which allows them to use the characters and plots of their films as part of the park experiences (Le, 2023). For example, they have Mickey shaped Pretzels, ice cream, waffle and beignets that are suggested to try while visiting the park (Rhodes, 2022). While you can find these foods at other amusement parks, it is the fact that it's shape like Mickey that attracts consumers and why it is recommended in travel sites. They also had issues with other competitors having substitute products with equal utilization for less (Torres, 2020). The products aren't better but they are of equal quality for a lesser price. The competing products could force the company out of the market if we don't adapt. General Motors was struggling but they adapted to the changes in the industry. Bargaining power of buyers Disney parks. When it comes to their films, Disney launching of their Disney plus streaming platform was a big hit in displaying many of their films. They still do have competition with other streaming services as Viacomcbs Inc., Nbcuniversal Media, LLC., AT&T Inc., and Sony Corporation are their competitors and use other streaming services, like Netflix and Peacock, for their film and hold a good amount of market share (Le, 2023). Disney's intellectual Buyers have a lot of influence in the automotive industry. The rise of social environmental consciousness has led to an increase of fuel efficient and electric vehicles (Pantalon, 2023). The are other factors, like financial factors of the majority of the population, fuel prices and the new change in remote work has shifted the industry. Consumers are buying parts that are the lowest amount and they are more picky in choosing a vehicle since it is one of their most expense purchases. This is why electric vehicles are

8 property rights of their characters, plots, etc., does give them control over who they choose to let buy their products, but the power to negotiate the contracts can shift to the buyers (Hivelr Business Review, 2022). becoming popular, the investment in one always seems to catch the eye of buyers. Comparison of the Industries Based on the Porter's Five Forces, the two industries have a few similarities. They both have a high level of bargaining power of buyers. Established companies will have the same level of low rivalry and threats because of their establishment in the industry and what they provide. However, Disney has more bargaining power of suppliers because of how big and popular their company is. Summary of Findings Diversifying into a Disney can provide the opportunity to increase revenue. Disney has a big following and they have a big market share in different industry. They are also known on a global level with parks in other countries. Our products can be used of their parks and can be used for the cars they use around the parks and resorts to all the way to the roller-coaster rides. Disney has a strong market share which can open doors for other opportunities.

9 Porter’s Five Forces Analysis Chart—New Industry Rivalry among existing competitors High because there are other companies like Universal that are as popular as Disney. Threat of new entrants Low because Disney has been around for decades and are know globally. Threat of substitute products Medium because the products they sell can be bought somewhere else even without their use of characters. Bargaining power of buyers High because of the power shift of having to work with other companies to get the products to the public. Bargaining power of suppliers Low because of the popularity of Disney and how having the company as a partner can help supplier's portfolio.

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10 Porter’s Five Forces Analysis Chart—Automotive Manufacturing Industry Rivalry among existing competitors High because there are many manufactures that have a solid and growing foundation with customers and Threat of new entrants Low because established companies have loyal customers. Threat of substitute products High because of the increase popularity of aluminum. Bargaining power of buyers High because depending on the social and economic status it can affect their decision of buying parts and vehicles. Bargaining power of suppliers Medium because it all depends on the contract drawn that can either benefit the supplier or manufacturer more.

11 References Pantalon, M. (2023, January). Automobile Engine & Parts Manufacturing in the US. IBIS World. https://my-ibisworld-com.ezproxy.snhu.edu/us/en/industry/33631/industry-at-a- glance#key-trends McErlaine, B. (2023, September). Auto Parts Manufacturing in the US. IBIS World. https://my- ibisworld-com.ezproxy.snhu.edu/us/en/industry/33639/industry-at-a-glance Market Line. (2023, June 09). United States - Oil & Gas. https://advantage-marketline- com.ezproxy.snhu.edu/Analysis/IndustryProfile/united-states-oil-gas-180214 Al Bari, S. (2023, September). Hybrid & Electric Vehicle Manufacturing in the US. IBIS World. https://my-ibisworld-com.ezproxy.snhu.edu/us/en/industry-specialized/od4516/ industry-at-a-glance Rose, A. (2023, February). Information in the US. IBIS World. https://my-ibisworld- com.ezproxy.snhu.edu/us/en/industry/51/industry-performance#current-performance Wood, G. (2023, September). Movie & Video Production in the US. IBIS World. https://my- ibisworld-com.ezproxy.snhu.edu/us/en/industry/51211a/major-companies Le, T. (2023, January). Amusement Parks in the US. IBIS World. https://my-ibisworld- com.ezproxy.snhu.edu/us/en/industry/71311/about Dalal, M. (2023, March). Arts, Entertainment, and Recreation in the US. IBIS World. https://my- ibisworld-com.ezproxy.snhu.edu/us/en/industry/71/major-companies#

12 Berdousis, D. (2023, January). Construction & Mining Equipment wholesaling in the US. https://my-ibisworld-com.ezproxy.snhu.edu/us/en/industry/42381/major-companies Rhodes, E. (2022, December 8). 40 Disney World Food Everyone Should Try at least once. https://www.travelandleisure.com/trip-ideas/disney-vacations/best-disney-world-food Hilvelr Business Review. (2022, April). Disney: Porter's Five Forces Industry and Competition Analysis. https://www.hivelr.com/2023/04/disney-porters-five-forces-industry-and- competition-analysis/ Zambrano, A. (2023, Semptember). Iron & Steel Manufacturing in the US. https://my-ibisworld- com.ezproxy.snhu.edu/us/en/industry/33111/competitive-landscape Torres, X. (2020, March 31). The Automotive Industry and Porter's Five Forces Model in Action. https://www.linkedin.com/pulse/automotive-industry-porters-five-forces-model-action- torres-cissp Garnsey, S. (2019, October 29). GM's supply chain starts on road to recovery. https://www.automotivelogistics.media/oems/gms-supply-chain-starts-on-road-to- recovery/39495.article.

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