Info

Disney

Aracruz

Deutsche Bank

Firm Size/Market Size

Firm is one of the largest players in the entertainment and theme park businesses but the businesses are redefining themselves and expanding.

Firm has a small market share of the paper/pulp business, but the business is mature.

Firm has a significant market share of a mature business.

Current Excess Returns

Firm is earning less than its cost of capital, and has done so for last few years

Returns on capital are largely a function of paper/pulp prices but, on average, have been less than the cost of capital.

Firm has a return on equity that has lagged its cost of equity in recent years.

Competitive Advantages

Has some of the most recognized brand names in the world. Knows more about operating theme parks than any other firm in the world. Has skilled animation studio staff.

Cost advantages because of access to Brazilian rainforests. Has invested in newer, updated plants and has skilled workforce.

Has an edge in the commercial banking business in Germany but this advantage is dissipating in the EU.

Length of High Growth period

10 years, entirely because of its strong competitive advantages (which have been wasted over the last few years) but the excess returns are likely to be

5 years, largely due to access to cheap raw material.

5 years, mostly to allow firms to recover to pre-downturn levels.

4 Jack Welch at GE and Robert Goizueta at Coca Cola are good examples of CEOs who made a profound difference in the growth of their firms.

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Lessons From The Intelligent Investor

If you're like a lot of people watching the recession unfold, you have likely started to look at your finances under a microscope. Perhaps you have started saving the annual savings rate by people has started to recover a bit.

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