According to Kaplan and Norton (2000), the financial perspective aspect of the Balanced Scorecard seeks to respond to need of the company’s appearance to the share holders and how the company should act with respect to the shareholders in order to achieve financial success acceptable by the shareholders for their investment. Shareholders are the key stakeholders of every business since they provide the company with funding as a way of ensuring that the undertakings of the business are achieved. On the other end, shareholders have their expectations from the business; their investment the business is made with the intention of a return and in such maximization of their wealth is the most important goal. Communication of all business decisions made will also go a long way in ensuring that all shareholders remain focused on achieving the strategic targets of the business. Thus, it is important to protect this goal of maximization of shareholder wealth at all times Kaplan &Norton, 2000).
Drawing from their annual financial report for the year ended 31st December 2011, Disney Company is mainly determined to achieve three main strategic priorities designed to enhance long-term shareholder value by increasing diversified international family entertainment and media enterprise and per unit profitability which, which will merge with the market share growth to lay the foundation for earnings per share growth and improvement in return on capital employed. In this regard, the company has been involved in number of acquisitions, divestitures and joint ventures which have influenced its profit and financial profile over the past couple of financial years (Walt Disney Annual Report, 2011).
The Financial Strategic priorities:
According to the management of the company (Walt Disney Annual report, 2011), the company has over the years, focused on three strategic priorities:
creating high-quality family content,
making experiences more memorable and accessible through innovative technology,
Working towards ensuring a global reach. In the financial year 2011, the net income for that year for Disney was a high of $4.8 billion, representing a substantial increase over the previous financial year and revenues were at a high of a $40.9 billion. Diluted earnings per share increased to $2.52. This was a very good performance in the financial year 2011, considering the tough economic times that the business world was experiencing (Walt Disney Annual Report, 2011).
Over the past six years, the company has recorded an incredible advancement and improvement in creativity and technological innovation as well as creating more beneficial business franchises globally. There has also been a significant long-term investment in parks and resorts which enhances and expands the experiences of the guests (Walt Disney Annual Report, 2011).
Technology seems to be the core driver of the Disney Company’s business because over the years it has seen great developments especially the use of digital technology for movies. The company also focuses particularly on populous, developing countries where the middle class is growing rapidly, has more discretionary income and is looking for quality family entertainment and this is sure to have a positive impact on the financial performance of the company (Walt Disney Annual Report, 2011).
The directors of the company also keep a close eye watch on the general respect for human rights in the process of service delivery to the clients: If at whatever instance the service delivery of any company violates the human rights, it is tantamount to a downfall of the entire enterprise and could have grievous effects on the image of the company and thus by extension its financial performance. It could be punitive to the state of the company and could even displace it in the market, thus negatively impacting the financial performance of the company (Walt Disney Annual Report, 2011).
The aspect of countering competition and other market related challenges is also not left unattended by the directors and the energized employees of the company who work tirelessly to steer the company to great heights. The company through its management should be on the watch to maintain the current reputation in the eyes of the shareholders or even make it better. This calls for precautionary measures to cushion the company against any impeding economic storm or competition which may have adverse effect on the financial performance of the company (Walt Disney Annual Report, 2011).
Paul Niven. The balanced score card step by step: Maximizing performance and maintaining results. John Willey and Sons, 2002.
Robert Kaplan&David Norton: The Strategy-Focused Organization: How Balanced Scorecard Companies Thrive in the New Business Environment. Harvard business press, 2000.
The Walt Disney Annual Report, 2011.