The executives of your company met. They are organized in 3 regions: Americas (South & North), Europe, and Asia/rest of the world. This year, there is a limited amount of money that can be spent on Marketing. Pick one of the regions, and justify why your region should be funded, instead of the others.
If your strategy includes new launches, please calculate the payback and mention it on your comments.
Payback details to be included
- What is the business idea?
- Revenue & Cost: estimate the cost to make, sales price, and revenue for 3 years
- How are you going to sell it/launch it?
- Why would consumers buy it? and Where are you going to sell it?
- How much do you need to invest?
See a short video about what we learned in this session here:
For this assignment. Where would you go ahead and find the research for the Revenue & Cost: estimate the cost to make, sales price, and revenue for 3 years? Would you use a balance sheet? Also, how would we estimate how much it could or would make? Is this based on past performance, how could we get this number correctly? Finally, how could we estimate where we would need to invest?
Where would you go ahead and find the research for the Revenue & Cost: estimate the cost to make, sales price, and revenue for 3 years?
At your firm you would already have that data, but if it’s a new product/service you will do market research about it. For example, imagine you are launching a marketing consulting service, and you are proposing to do all marketing in Europe. You will research how much you can charge per hour in Europe and how much will it be the cost. Due to taxes, at least in Western Europe, your cost to hire people will be higher than in say Alabama. Then you will try to see how others are pricing those services. Your marketing claim could mention that you will have US trained resources that know how the American market works
Would you use a balance sheet? No, for this project, I wouldn’t use a Balance Sheet.
Also, how would we estimate how much it could or would make?
The example above about marketing services would be an example.
Is this based on past performance, how could we get this number correctly?
It would be an estimate.
Finally, how could we estimate where we would need to invest?
Let’s swap roles. Imagine that a client is willing to invest, to hire a marketing consulting service, but they ask you “how much would I need to invest?” How would you respond? In general, it makes sense to give the client 3 options, with different levels of investment.
I think IBM should prioritize the Americas. Due to the pandemic, the revenue for all the regions fell, but this chart shows the Americas region is
IBM’s greatest source of revenue with over $34 billion generated in the region. Americas’ revenue is still maintaining the highest amongst other
geography and when assuming the annual report for 2022 it is $68,228. • The usage of IBM’s cloud & data platforms (consulting, application management, global process services), global services (infrastructure & cloud, technology support services), and technology services (systems hardware & software) is in high demand for Americas, and the separation of Kyndryl is one of many activities that IBM is taking to focus on hybrid cloud and AI as well as leverage a portfolio focused on consulting and technology.
For Netflix, perhaps the most obvious would be to invest in the Asian market. Netflix wants to gain a foothold in this market to stay in the top positions, plus they need an influx of new users. But I would go the non-obvious way and start investing in the marketing of the America-Canada region. There are two main ideas for this solution. First, the US-Canada region consistently generates the most considerable income for Netflix. In this region, the highest rates for service packages are, and it is in this region that entertainment services are more critical than ever. Investing all available money into marketing in a region like Asia it’s unlogic when not all users have free access to high-speed Internet. Yes, Asia is developing rapidly, but the UN demographic reports say that many people in Asian countries do not have enough income to feed their families. For Asia, the cost of the service is, first of all, crucial, and if Netflix can keep low prices for some period, then this will help to capture the market.
Secondly, for the USA-Canada region, marketing (if, of course, the service itself is of high quality) plays an important role. There is vast competition here, and new streaming services emerge every day. In addition, Netflix’s competitors in this market are games, podcasts, and a vast number of events. If Netflix does not keep users’ attention on its service, people will quickly look for alternatives.
Netflix spent 2.2-2.5 billion annually on marketing in all regions. Well, I would suggest investing 1.5 billion in the US-Canada region.
For Disney, I would suggest investing in Europe. Statista shows us that as of 2020, Disney merged the US, Canada, and Latin America as a single category – Americas, which in 2021 54,157 million dollars, compared to Asia (6,571) and Europe (6,690). The author of the article on variety.com claims that Disney Plus will be launched in more European countries in 2022 than in Asia, this is one of the reasons why I would invest more, at this time, in the European market. We have to gain a great market share in the newly launched European countries and this is why I consider it crucial to focus on the European market, now. Furthermore, Parisian Disneyland will be getting new attractions in 2024, according to Forbes author Sylt. Consequently, it would not be such a bad idea to slowly introduce the expansion to our customers, which could be done through the Disney Plus platform. In the Asian market, the Disney Plus business model differs from more developed markets, that would require more time to conduct more studies in order to create the best marketing plan possible to start gaining more in Asia. Meanwhile, we can focus on Europe.
Statista shows that Disney spent 3.18 billion US dollars on promoting their products in 2020 in the United States and 4.7 billion U.S. dollars on advertising worldwide. I believe that Disney should consider investing at least 2.2 billion US dollars in the European market.
https://www.forbes.com/sites/csylt/2017/11/22/euro-disney-planning-blockbuster-new-attraction-for-2024/?sh=1cc0e04313c1
https://variety.com/2022/tv/global/disney-plus-42-country-launch-europe-africa-west-asia-1235163724/
https://www.statista.com/statistics/193263/revenue-of-the-walt-disney-company-in-different-regions/#:~:text=In%202021%2C%20the%20Walt%20Disney,to%2065.39%20billion%20U.S.%20dollars.
Hi Anastasia,
I am also in the Disney group and agree with you that investing in Europe would be very beneficial for the company.
I’m working with 3M and I believe we should invest more in the Americas region because is where the majority of their products are produce, and there is a big demand in the Americas for products manufacture in this region. Furthermore, there is an ongoing internal investigation regarding “marketing efforts by certain business groups based in China.” Based on this information, I believe it’s best for 3M to focus on their American (North and South) region in terms of marketing. I wouldn’t include any new launches because 3M already manufactures over 60,000 products (as of 2019) and any new products wouldn’t have major impact on their net sales.
According to Statista, 3M increased their marketing spending from $278M in 2020 to $327M in 2021. Their average spend is $352M, I would recommend a budget of $350M for 2022.
Resources:
https://www.statista.com/statistics/733566/3m-spending-on-merchandising-and-advertising/
https://s24.q4cdn.com/834031268/files/doc_financials/2021/ar/3M_2021_Annual_Report_Web-(3).pdf
For Netflix, I would invest in the Americas region. The reason for this being that during the past 2 years, in the Americas, there was a 15% increase in subscribers, even when we increased prices by 8% in average. This market is our largest, constituting 52% of our global subscribers. So for this, if we follow the trend, the best way to gain market would be investing money in this region as we saw there are not many churners and they are joining our service.
Last year we invested $2.5 Billion in marketing, and gained a little over 18 million new subscribers. This meaning that we spent around $137.5 USD on marketing per new subscriber. Our anual revenue per subscriber in this region is $143.7 USD. Meaning that our marketing cost is recovered within the first year of every new customer, with a $6 USD income per subscriber, compared to Europe where there is only a $2 USD income or Asia with -$22.78 USD, that it would take us more than a year to recover. That said, Americas sounds like our best option to invest given that the LATAM market is growing and the UCAN region is slower but it gives us much more profit.
Considering our $137.5 USD of acquisition value per new client, and the size of the market compared with our previous year investment on marketing, I would invest around $1.75 Billion dollars of marketing in the America’s region.
My company is Disney. To answer the question, I will suggest that the company spend that limited marketing budget on the Americas. First of all, by looking at Disney’s 2021 annual report, the total revenue is slightly increased from 2020. That bare growth is caused by the development of Disney’s streaming segment, and the revenue of the DPEP segment is decreased by 3%. The Statista provides us with Disney’s revenue by region, and the Americas is the primary region where Disney’s revenue comes from (Americas-54,157 million, Europe-6,690 million, and Asia Pacific-6,571 million). The revenue that earns from the Americas is eight times more than the revenue that earns from Europe and the Asia Pacific. As a result, since we have a limited marketing budget, I think it is important to retain the primary consumers in the Americas and try to attract more potential customers. According to Statista, Disney’s advertising expenses in 2020 is 4.7 billion dollars, and there are 3.18 billion dollars spent on the US market. Therefore, even though Disney will expand itself to Europe and Aisa Pacific, I still suggest Disney focus on the Americas. I would recommend a marketing budget of 3 million at least.
https://www.statista.com/statistics/193263/revenue-of-the-walt-disney-company-in-different-regions/
https://www.statista.com/statistics/685554/walt-disney-ad-expense/
https://www.statista.com/statistics/192122/us-ad-spending-of-the-walt-disney-company/
For L’Oreal, I would suggest to invest more in North Asia, especially the region of China. From the annual report in 2021, there was a strong double-digit growth in 2021 in mainland China. During the Double 11 festival on Tmall, L’Oréal broke all records and reported further market share gains, confirming its brands’ appeal to Chinese consumers. Comparing with a more mature market in North America and Europe. We could see the potential in North Asia market.
For NIKE, when I am considering which region I should fund, I firstly look up Nike’s global revenue by region on the website of Statista. Based on the data, before the Covid pandemic, the global revenue was increased every year from 2017 to 2019, and the region with the greatest increasing rate is the area of Greater China, with a sales growth rate of around 20% every year, and interestingly, for the North America region, even though it accounts for around 35% of the global revenue of Nike, it did not increase in revenue, and between the year of 2017 to 2018, the revenue even decreased. From that, I believe I should fund for the Asian area, especially the region of Greater China. For the money I fund, I want it to be utilized specifically for the digital marketing at the Greater China area. The main reason for that is based on the success of the online retailing APP launched in the North America area during the past few years, and I believe that it will also generate a considerate growth in sales in the Greater China area.
Disney should use their 2022 marketing budget for the Americas. Over the past years, Disney Americas has brought Disney a min of 5X the revenue generated in Europe and Asia. Asia is currently significantly affected by the pandemic, so going deep in marketing for this market is not worth it. Europe, is still recovering, and Disney is not as famous as it is in the Americas. Statistas show that the Americas generated 54,157M in 2021 compared to 6,690M in Europe and 6,571M in Asia. Looking at the numbers, the demand is coming from the Americas, and that is where the primary revenue is coming from. Disney has incorporated new attractions to their Orlando Parks, has opened the Star Wars cruise experience resort, brought new content to Disneyplus, and is continuing to bringing new experiences to their customers. For Disney to get a good ROI, Disney needs to put their marketing efforts toward the Americas as this is their primary source of business and revenue.
Source: https://www.statista.com/statistics/193263/revenue-of-the-walt-disney-company-in-different-regions/
For L’Oréal, I suggest the company invests on the Europe region. Even though the beauty market recovered across Europe in 2021, it remained below 2019 levels. Continuing to invest on e-commerce will strengthen its online sales and digital leadership. In 2021 the company strengthened its position, particularly in the United Kingdom, Germany, France, Russia and the Scandinavian countries. It also gained market share in all its strategic categories, such as skincare, haircare, makeup and fragrances. Continuing to invest in this region will position brand leadership and show significant growth for the upcoming years.
Reference: https://www.loreal-finance.com/eng/news-release/2021-annual-results
Netflix should spend the marketing budget in Asia/region rather than the Americas and Europe, where the markets are mostly saturated and the competition is very high.
1. Unlike other regions, in Asia and many countries, Netflix is one of the first companies that offer quality streaming services. There are opportunities for acquiring new customers and building customer loyalty before competitors step into the market.
2. Asia-Pacific region has the fastest revenue growth of 27.2% in Q4 2021. While EMEA has 18.1% and UCAN has only 11%. Netflix should continue business expansion in those high-growth regions.
3. Even though UCAN and EMEA contributed the largest share of the company’s total revenue, in this Q4 2021 UCAN was Netflix’s slowest growing region. So, the market is quite saturated and Netflix should spend money on CRM and product development rather than marketing for this region.
4. The market size of online live streaming is growing fast in Asia, for example, there are 560 million users in China who can become Netflix customers.
5. Right now, Netflix, YouTube, Disney+, and Spotify are continuing to gain popularity. It’s important for Netflix to invest in marketing to win the market share of this profitable region before the opportunity is gone.
For Coca-Cola, I would suggest the company invest in Europe, Middle East, and Africa, specifically in Africa. According to Coca-Cola’s 2020 to 2021 annual report, there was a total of 17% increase in its sales growth. North America showed the highest revenue, followed by Europe, Middle East, and Africa (EMEA), Asia Pacific, and Latin America. Although North America shows an increase in its growth and has the largest market, the African market has plenty of room for growth because Americans drink less soda. According to an article, the rate of growth in Africa is higher than that of Western markets and other parts of the world, and it will continue to become a larger part of the revenue. Thus, it could be a great opportunity to invest in the EMEA market.
For Disney, I believe Disney should invest its limited budget in the Asian market and Americas market at a ratio of 1:1.5. According to the article on the Santa Clarita website, Disney Plus hit 100 million subscribers since it opened to the public, and 29% of customers are from India. As the digital market and the video streaming market explode worldwide, the Asian market doubled its revenue in the most recent 5 years while the Americas has 1.3 times increased and Europe has 1.5 times revenue. And statists expect the Asian market will keep expanding and reach a 4 times increase in 2026. Disney 2021 Fiscal year report consist they have been generated their major DMED income from the Americas Market, however Asian market growing faster than the Europe market. As the result, I recommend Disney should dig deeper into the growing Asian market than other regions.
https://www-statista-com.proxy.library.nyu.edu/outlook/dmo/digital-media/video-on-demand/video-streaming-svod/asia?comparison%5B%5D=americas&comparison%5B%5D=central-western-europe#revenue
https://santaclara.org/7oemn/disney%2B-subscribers-by-country
https://www.statista.com/statistics/193263/revenue-of-the-walt-disney-company-in-different-regions/#:~:text=In%20Europe%2C%20the%20company's%20revenue,U.S.%20dollars%2C%20respectively%20in%202021.
For Netflix, I would suggest to invest more into the Asian Pacific region. With the United States/Canada region experiencing its slowest growth yet due to emerging competition and exponential growth in the Europe, Middle East and Africa region, I believe our new focus should be Asia.
Though many still lack access to fast internet or mobile data, Asia is developing fast and progressively people everyday are gaining access. The increase in broadband penetration and smartphones use, is driving significant growth. In countries such as India, Netflix has partnered with a big telecommunications company to offer streaming subscriptions to members of certain phone plans. Additionally, is Q4 of 2021, APAC had the fastest revenue growth of all regions (27%). It is a great opportunity for Netflix to affirm its place in the market, and gain market shares in the region.
Furthermore, there is a great potential in Asian content. Since the release of Squid games, a global appeal was created. Especially for South Korean content. With our recent purchase of three Korean films (originally for theatres), I believe we will not only attract subscription growth in the region, but also everywhere else.
Thus, I believe we should invest half a billion (1/2 bn) in marketing for the Asian Pacific region.
Pfizer should prioritize sales in the United States. From the annual report, sales in the United States are higher than other geographic areas. Based on revenue in 2019, 2020, and 2021, the U.S. contributed most. In 2021, the U.S. contributed 37%. Areas of emerging marketing has the second highest revenue. Developed Europe comes in third while developed rest of the world where Pfizer’s products are sold come in last. All geographic areas showed a great change when looking at 2020 and 2021. Even though the difference in the United States is not greater than some other geographic areas, they are still the leader in sales and revenue. The primary reason for the increase in Europe is also due to an agreement to supply pre-specified doses of Comirnaty in November 2020 and February and May 2021. Based on data over the years, it would be important to continue investing more of the marketing budget for the United States compared to other geographical areas.
For L’Oreal, I would suggest investing in Latin America. The annual report for L’Oreal in 2020 and 2021 had the lowest profit compared to Asia, North America, and Europe. As of right now, L’Oreal has already traction in Brazil, Mexico, and Chile, which is in the right direction. In addition, Brazil and Mexico have the largest population in Latin America, which means there is a higher percentage of potential consumers. If the same growth efforts that have been applied in Asia, Europe, and North America are tailored for Latin America then the results will also improve similar to those other markets.
Source: https://www.loreal-finance.com/en/annual-report-2019/loreal-worldwide-2-3-0/latin-america-2-3-4/
I am from 3M team and I will choose Asia as my primary target to spend up my marketing budget. First of all, considerably Asia is the market with the most potentials. That means their patient-per-doctor index is the lowest among these market, while the Asian economy is booming. The increasing need for more doctor and medical facility brings higher market facility for medical supply and protective gear.
Also, in the other two market, 3M’s current market share is stable and competing with a handful of existing competitors. However, in Asian region, especially China, they are new competitors for medical supplies every year. And the pandemic has also drove more corporate from other industries to join the competition. For example, BYD, a battery and car manufacturer, joined in medical supply production, became one of our major competitor and even start to eat up our America Market.
Lastly, 3M achieved over 10 billion sales in Asia in 2021. It is one of the most dynamic developing area in the world. Considerably, it could have the shortest market payback time.
I suggest Coca-Cola allocate its budget to Asia. The segment shows 9% increase in organic revenue in 2019, and one of the largest customer base and industry value. Coca-Cola’s creations innovation hub is planning to release a limited edition drinks called Zero Sugar Byte in Asia on May 23. In addition to the drink’s exiting new flavor, it can also be scanned for an augmented reality game. It also partnered with games extremely popular in Asia like Fortnite, to bring customer exclusive gaming experiences. Given the track record of popularity of such events in Asia in the past, the sales of Coca-Cola will surely increase following the release.
My suggestion for Pfizer is to allocate its marketing budget mainly to the Americas. In 2021, according to data from Statista, Pfizer’s revenue in the United States, Europe, and the rest of the world is $29,746 million, $18,336 million, and $12,506 million respectively. In 2020, the revenue in those three regions is $21,712 million, $7,788 million, and $4,036 million respectively. It is obvious that the US is the largest and most profitable market for Pfizer. Due to the launching of Covid-19 vaccines, Pfizer secured a leading position in the industry. Although the US is the greatest market for Pfizer, I will also recommend Pfizer increase the amount of investment in the Europe market. It is important to sustain a leading position, as well as expand into other areas for more potential growth.
Coca Cola is a worldwide company that is popular across different countries, with different selling points. However, if I were to decide which Region they should invest more Marketing in, I would say the Middle East as Coca Cola is less popular in this certain region compared to their competitors Pepsi Co for example. Indeed, in 2019, Coca Cola spent 4.2 Billion dollars on their global marketing, with 30% of it going to US advertising only according to Statista. The EMEA region is less of a priority since it doesn’t account for a lot of their sales, given the high competition, but taking into consideration the rise of 18% of their sales in 2021, I believe investing a bigger amount of marketing in this region will succeed in a higher sales and popularity across the globe.
As a member of the Disney team, I recommend that the company increase its investment in Greater China. If ignore the impact of the epidemic, after the opening of Shanghai Disneyland in 2016, the occupancy rate of Shanghai’s star-rated hotels has remained above 70% for six consecutive quarters. Previously, industry insiders analyzed that the secondary consumption of Disneyland (including souvenirs, restaurants, hotels) is very strong , accounting for about 60%-65% globally. According to data from the China Tourism Academy, the average spending of Shanghai Disneyland visitors is between 150-300USD
I’m working with 3M and I believe we should invest more in Asia. Our other areas in the market are very stable and have the ability to market themselves. In the Americas, there is no true competition for most of our products, however, in Asia, specifically China, with their constant advancement in technology, there is a higher competition there. Lastly, 3M achieved over 10 billion sales in Asia in 2021. It is an area that has the opportunity to grow!
This is my third day became a digital marketer at a company that produce souvenir and acrylic product. I have learned so much than before i am became a digital marketer.
We are making a custom acrylic product
Please immediately remove this comment and refrain from adding any commercial comments.
I chose Lululemon, a world-famous sportswear company, as a sports brand. According to Statista, Lululemon’s main revenue in 2021 will come from the North American market, with 4345.69million dollars from the US, 954.22million dollars from Canada, and only 956million from other countries. Asia is a big market.Asia’s overall GDP grew by 3% per year even during the pandemic. At the same time, China’s consumption levels are among the one of highest country in the world. After the pandemic, people are becoming more health conscious, and many are starting to exercise regularly every week. Lululemon can promote its brand in all the major international cities in Asia and open more chain stores. For example, Beijing, Shanghai, Guangzhou, Tokyo, and Seoul have launched some activities related to exercise and health because many young people in big cities are always more aware of health. It is also better for the brand and the promotion of Lululemon’s unique yoga wear and other sports products. Lululemon spends about a 600millions dollars per quarter on SG&A. In the next three years, the annual marketing and advertising spend in Asia will be around a 1200million dollars. This will double the profit of Lululemon in Asia.
https://ycharts.com/companies/LULU/sga_expense
https://www.statista.com/statistics/422587/net-revenue-of-lululemon-worldwide-by-region/
Apple is one of the most influential and recognizable brands in the world, responsible for the rise of the smartphone with the iPhone. Valued at over $2 trillion in 2021, it is also the most valuable technology company in the world. Apple has always been most successful in the US, its home country. While revenues have increased in all regions, Americas is responsible for 45% of all revenue generation and approximately 40% of that is from the United States alone. In 2021, Apple’s revenue in the US was 153.3 billion, which is more than sum of the revenue in Europe(89.3 billion) and China(68.3 billion). iPhone continues to be the main revenue generator, and it saw a massive increase in sales in 2021, increasing revenues by 39%. Sales have steadily fallen in China since 2015, although it received a slight bump in 2021. All other regions have been steady in terms of sales. Sales for IPhone in the US was 84 million, which is also higher than iPhone sales in Europe and China. Apple’s digital advertising strategy in 2019 was decreasing their ad spend by a drastic 68%, down to $76.3M from $243M in 2018. However, it can be seen that the investment in the US should be increased back to hundreds of millions with the decreasing affect by the pandemic.
L’Oreal is the number one cosmetic company in the world. According to me, L’Oreal should invest in Asia. In 2021, the highest sales came from Asia. 30.5% of the total sales came from there which shows that the region has a strong potential and indicates the customer’s willingness to purchase. Last year, in Asia, L’Oreal as a group produced less but sold more than how much they produced in Asia. This factor indicates that a budget should be given to this region. L’Oreal is already investing in Chinese brands and acquiring them to appeal to that market. There are several initiatives that have been made in China by L’Oreal such as supporting women and youth through campaigns from Lancome and YSL. Additionally, L’Oreal has established its North Asia office in China which has training facilities and a hairdresser academy. Investing in marketing through social and e-commerce has already proved successful for L’Oreal in the past in the north Asia region through TikTok. In mainland China, L’Oréal reported strong double-digit growth in 2021, twice that of the beauty market. Therefore, I believe investing our marketing budgets in Asia, specially Northern Asia will be profitable for the company.
For Disney, I will choose the American market to invest more in marketing next year. Generally, the Americas are the markets that account for the largest percentage of Disney’s total revenue. In 2021, the revenue generated by the Americas market was about 80% of the total sales, and the Europe and Asia markets took only about 10% each. Under the condition that Disney has generally recovered from the negative impact of COVID and is earning more compared to the year before, the American is the market that has the biggest potential to contribute the most to Disney’s total sales growth. For this reason, the American market may be the worthiest one to be funded as it is the most crucial market for Disney. According to Statista, Disney has spent 5.5 billion USD on marketing worldwide and about 3.8 billion in Americas. If it is the case that there is a limited amount of budget that can be allocated to marketing, funding more in Americas as usual can guarantee more sales.
As a member of the Pfizer team, I decided to invest our limited marketing funds with the Americas (South & North) for the following three reasons. First, according to Statista’s “Pfizer’s revenues in global submarkets from 2010 to 2021”, the North American (United States) market always ranked first for Pfizer’s revenue from 2010 to 2021. In 2021, United States itself generated nearly 3 billion in revenue which is almost equivalent to the sum of developed Europe and developed rest of the world’s revenue. My suggestion is to invest money in the market that made the most profits and hopefully get the best ROI. Secondly, it’s easier to market medical related products in the Americas (specifically United States) because other countries such as European countries, Japan, Korea, Taiwan and China all have rigorous rules on marketing medical products. For example, in the United States Pfizer can target patient groups and market their products directly to them. This kind of marketing strategy would not be possible in many other countries. Lastly, with prices on the rise and global inflation, it’s the best to earn revenue in US dollars compared to other currencies. Because of the dollar’s strong exchange rate, it will be most efficient to earn the currency directly. In conclusion, investing in the highest revenue market, regulations of marketing medical products in foreign countries and the exchange rate concerns are my main reasons to support using the marketing funds for the Americas.
Statista – “Pfizer’s revenues in global submarkets from 2010 to 2021” article:
https://www.statista.com/statistics/267877/revenues-of-pfizer-in-submarkets-worldwide/
As a member of Disney team, I think the largest amount of the 2022 marketing budget should assign to Asia especially to China and Japan. The Asian market have greater opportunities. They have the largest population market, fast middle class growth rate and younger demographic. More importantly, Disney product is more likely to get buzzed in Asian Culture. For example, the debut of Lena bell generate great attention in Shanghai and Tokyo Disneyland. Lena bell become a traffic idol in Shanghai Disney and Tokyo. This enthusiasm directly increase the revenue of Disney Park merchandise even during the pandemic. The debut of Lena Bell in Shanghai Disneyland also greatly increase the attendance of the Park However, the image of Lena Bell seems too childish in western culture, which did not generate any buzz.
For Pfizer, I suggest that it should continuously invest in Hospital Segments in the international market. For the year 2021, the revenue generated from Hospital Segments is $4,613 million, which is twice of the U.S. market. This growth is primarily driven by the anti-infectives portfolio in international markets. With the recovery from COVID impact, we forecast that there is an increasing demand for Hospital services in the international market, especially in Asian countries such as China. The expected revenues for 2022, 2023, and 2024 are $4844 million, $5085 million, and $5340 million respectively. The cost should be constrained to about 30% of the revenue for each year. We will partner with hospitals and medical institutions in the international market to distribute our service. We are a leading pharmaceutical company, and our Hospital business sector offers one of the industry’s largest and most diverse portfolios of anti-infectives. In order to achieve this growth goal, 20% of sales, which is about $950 million, should be invested in this section.
For Disney, I think it should focus its investment in America. Because America is recovering from the pandemic, and Disney should seize this great opportunity to boost its sales in Park Admissions. Actually, Disney could also bring some of its practices in China to the U.S, such as the successful marketing of Lina Bell. This is a classical case of brand marketing.
I’m from Asia and I think Apple should fund Asia compared to the other two regions. The first is the population size. According to Worldmeter data, Asia’s total population of 4.7 billion people is more than half of the world’s total population. A large population brings a large potential market, so funding marketing in Asia will bring good earnings and market share for Apple. The second reason is that Apple’s operating income-to-net sales ratio in Asia is the best of the three regions. Operating income is the amount left over after expenses are deducted from net sales. Therefore, the higher the ratio of operating income to net sales, the higher the profit margin of Apple. According to Apple’s 10-K data, net sales in the Americas, Europe and Asia in 2022 will be approximately 169.7 billion, 95.1 billion and 129.6 billion, respectively. The operating income was 62.7 billion, 35.2 billion and 55 billion respectively. Through these two sets of data, it can be calculated that the ratio of operating income to net sales is 31.88% in the Americas, 37.01% in Europe and 42.44% in Asia. The best performance in Asia means that funding marketing in Asia will maximize Apple’s earnings. The third reason is that sales growth in Asia is doing well. Although sales growth in Asia in 2022 is the lowest of the three regions at 5%, the Americas are 11% and Europe is 7%. This is mainly due to the decline in sales in 2022 due to the depreciation of the yen and the poor economic environment in Japan. At the same time, the Fed put a lot of new currency into the international market to cause international inflation is also a key factor. Sales growth in Asia in 2021 is 52%, far outpacing the Americas’ 23% and Europe’s 30%. Therefore, the sales growth rate in Asia is still optimistic in the future.
Apple’s business primarily runs around its flagship iPhone. However, the Services portfolio that includes cloud services, App store, Apple Music, AppleCare, Apple Pay & licensing and other services which become the cash cow. Moreover, non-iPhone devices like Apple Watch and AirPod have gained significant traction. In fact, Apple dominates the Wearables and Hearables markets due to the growing adoption of Watch and AirPods. The solid uptake of Apple Watch also helps Apple strengthen its presence in the personal health monitoring space.
Apple’s investing activities other for the September 30, 2022 quarter were $-1.780B, a 405.68% increase year-over-year.
Apple investing activities – other for the twelve months ending September 30, 2022, was $-3.905B, a 1561.7% increase year-over-year. Apple’s annual investing activities – other for 2022 was $-1.78B, a 405.68% increase from 2021.
I think Apple should invest in marketing its Apple Home line of products in North America. On the one hand, as technology advances people are more and more interested in smart homes, especially young people who are renovating their new homes are willing to use technology to help make their houses more convenient. At the same time, more and more people are willing to use smart home to improve their living standard. On the other hand, the Apple Home series belongs to a very promising and unexplored area. I think Apple users are willing to add Apple Home series products to their “Apple Family Bucket”. Apple’s largest market is currently in North America. What’s more, the index of North American users using multiple Apple series products at the same time is higher because it is more convenient for them. Since Apple Home is a series that needs to be used with other Apple products, I think it’s a good idea to promote the Home series in North America first and then globally.
I believe Pfizer should target Asia due to its larger population and hence easier spread of Covid. However, within this region I’d suggest China be the primary target and other Asian countries secondary. I believe that China is focusing on a “Zero Covid Cases” policy and hence, still has restrictions in place. As lesser people are taking the vaccine in other countries due to them not seeing Covid as a threat anymore and with governments easing restrictions, targeting specific countries within the region would be a smart move.
The operational impact of the Covid vaccine on Pfizer was $36.1 billion in revenue for 2021. Assume investment to be close to $10 million, and revenue from vaccine sales each year forward to be closer to $20 billion with a net margin of 20% it would still take Pfizer close to 3 years to recover this cost.
I believe consumers would purchase it as having zero covid cases would result in a lifting of strict covid restrictions in the country.
I think Apple should invest more on services, especially services after purchasing. The most recent iPhone14 model has much lower sales than predicted according to the news, and people are complaining about Apple innovating new products too soon with little technological improvements. it is not convincing to change phones every year with high price and little change in camera and battery. If apple started to focus on the post-purchase services, it will improve consumers’ satisfaction about products and create stronger brand loyalty. Also, the cost of services provided is much lower than the profit it generated compare to other categories of Apple products. So, I think it is a good area to invest more.
I personally think that L’Oreal’s limited budget should be used for the Asian region. First of all, L’Oreal China is developing very well now, and it is growing significantly every year. 2021 was yet another year full of innovations in Mainland China, particularly in haircare. The Genesis fortifying range by Kérastase helps prevent hair fall due to breakage from brushing and was created based on keen consumer insight, including in depth knowledge and understanding of the needs and habits of Chinese consumers. They have strong double-digit growth for L’Oréal China in 2021, twice that of the beauty market.
Because I worked for L’Oreal China, I know that our company’s growth in the North Asian market is significantly greater than in other regions. Moreover, China’s population base is also much larger than other countries, so it is worthwhile to increase marketing investment in the Asian region. And in China, live shopping is very popular now. L’Oreal’s brand Taobao has a very good sales performance. I think increasing marketing investment will let more people realize that L’Oreal’s brand will bring more income.
Team：Disney
Along with the instability of the global epidemic, I still recommend Disney to focus its own investment in the digital media business (Disney+) in 2022. On the one hand, Disney should firmly seize this opportunity to continue to enhance Disney’s strengths in the digital media business. Secondly, employees in the theme park business have already been partially laid off, and it would be unwise to rehire and manage them. Therefore, for Disney’s investment, I suggest that managers can increase their investment in production by 10%. Past financial reports show that 10% of production consumption can produce approximately 10-20 valuable sections. These feature sections will not only increase existing member satisfaction, but more importantly, the new generated content will attract more consumers to purchase membership and make up for the would-be churn due to price increases.
Along with the instability of the global epidemic, I still recommend Disney to focus its own investment in the digital media business (Disney+) in 2022. On the one hand, Disney should firmly seize this opportunity to continue to enhance Disney’s strengths in the digital media business. Secondly, employees in the theme park business have already been partially laid off, and it would be unwise to rehire and manage them. Therefore, for Disney’s investment, I suggest that managers can increase their investment in production by 10%. Past financial reports show that 10% of production consumption can produce approximately 10-20 valuable sections. These feature sections will not only increase existing member satisfaction, but more importantly, the new generated content will attract more consumers to purchase membership and make up for the would-be churn due to price increases.
As one of members of team NIKE, after analyzing the concrete business data in recent years,I think it is a reasonable and logical decision to pay more attention into Americas (South & North). From the perspective of actual operating performance, revenues were $4.8 billion, which saw a 7 percent increase compared to last year, in details, the revenue growth was12% and 9% respectively in North America and EMEA, over the past quarter of this fiscal year, also the online sales showed a increase of 11% and the field of North America accounted for 40% of the sales growth. On the contrary, the fiscal performance was not that positive in Great China and APLA, because the revenues saw the decline of 20% and 6% compared to the same period of past year. Based on the reality that Great China had been the most competitive field of NIKE’s business landscape, to some degree, the Chinese market determines Nike’s performance in the Asian market. There are two main reasons why sales in Great China have been falling for several years. Firstly, before 2018, Great China contributed most of its growth in sales and market shares, while with the development of Chinese domestic brands like Lining and Anta, foreign brands had been challenged a lot. The second is that the Xinjiang cotton controversy happened in 2021, because of the outcry, the domestic market shifted more to Chinese self-owned sports brands, the data showed that at the beginning of 2022, domestic Chinese brands saw sales growth by 17% while foreign brands saw sales decline by 24%. Moreover, because of the Covid-19 and changing international trade policy, Nike’s Chinese sales were down 20% while sales got an increase of 12% in its largest market-North America. Thus, I think we should focus on the shift of consumer preferences and invest more in the field of Americas.
As a member of the Nike team, we should invest in the Americas region, specifically digitally. The reason for this is because this is where Nike makes the most profit, so it is important to continue to focus on them, since they are the bigger sales drivers. Last year, there was a $5.1 billion dollar revenue, and North America was 40% of the sales growth, which is significant. Europe had a $3.2 billion revenue, which is much less than North America, making America’s very important to focus on. Digital sales represented 24% of the brand’s revenue in fiscal year 2022, which translated to a 23% increase in digital sales. This is why it is important to focus on digital sales in North America. In the other regions, there was a decrease in revenues. More money needs to be invested in Nike’s apps, due to the impact it has on their overall sales. Nike has many apps that build communities, create convenience when shopping and also build brand loyalty, which is why Nike is so successful in the digital landscape.
We, at Apple, believe that out of 3 regions: the Americas (South & North), Europe, and Asia/rest of the world, Europe should be our target market. My rationale is that since the demise of the competitors such as Xiaomi and Huawei, Apple has already infiltrated the Americas (South & North) market, thus there’s no need to further increase our marketing spending. As for the Asia market, though we have not yet infiltrated the market, most of the Asian population does not have the financial ability to comfortably afford Apple Products. Thus, they are more likely to choose from one of the lower-priced competitors. How about these developed countries such as South Korea and Japan you may ask? Samsung thoroughly infiltrates the electronic market in South Korea. Koreans are more likely to choose their own brand due to better localization. As of Japan, the top four Best Selling Smartphones in Japan are all iPhones. There’s no need to further increase our marketing spending in this saturated market. This leaves our only choice which is the European market. Most of the citizens in Europe can comfortably afford an iPhone and their phone market has fierce competition such as Xiaomi, Samsung, Oneplus, and Huawei.
I think Coca-Cola should invest more in the Asia market than in other regions. Based on the annual report, we can see that the unit case volume in Asia grew 10% compared to the year 2020, which is a huge growth rate compared to the other regions Coca-Cola covers.
Coca-Cola will launch new products during every Chinese festival and celebration, and these advertisements will also incorporate cultural values. Customers who are loyal to Coca-Cola will purchase new products immediately. However, China has several other local beverage brands that offer tasty beverages suited to local tastes, which is Coca-Cola’s main competitor. A significant increase in unit case volume means Coca-Cola’s Asian customer base is strong. My suggestion would be that Coca-Cola hold more events or creative ads throughout the year to keep attracting younger customers who are interested in Coca-Cola’s culture and background, making them feel really involved. Investment in the Asian market will allow Coca-Cola to boost sales of its products more effectively.
My company is Apple, so on behalf of it I recommend focusing more on Asia particularly India and China as they are huge market opportunities to explore. The North Americas and Europe markets are already dominant for apple and so focusing more on it or spending more will not affect that much. Instead focusing on Asia where there is huge population of around 4.7 billion. I recommend focusing on selling here iPhone Mini and iPhone normal versions as the consumers here are very price sensitive as observed in China. Even producing smaller versions of MacBook like MacBook Lite or so could help to drive sales and create customers in this region. I first propose promoting our existing iPhone Mini and having Mini versions in the new 14 model and soon come out with the same concept for laptops. In Asia, except Japan where apple is on top and South Korea, which is dominated by Samsung, this strategy should be applied in all Asian countries.
For Disney, I think America (North&South) should be the funded region. As the 100th anniversary is coming, theme parks, retailers, and also streaming services in America all have a chance to bump up the revenue. The covid-19 pandemic is still somehow influencing the park business in Asia, and there are too many streaming service competitors, so it would be better to build on the region where we already gained the market share.
The business idea is investing $1 billion to produce more new streaming contents, exploring VR service and also expanding to the game branch to build a Disney game world. Since there will be much more content on the Disney streaming services, the price of Disney streaming memberships and bundles will have a price increase. According to Polygon, “Disney Plus’ Premium ad-free subscription is $7.99 a month with a full year available for $79.99, but on Dec. 8 that price will go up to $10.99 a month and $109.99 for a full year”. We can increase the price to $14.99 with all the VR and game access and keep it at $10.99 without all the new services.
I recommend that Coca-Cola allocate its budget to Asia. We know from Coca-Cola’s Q2 2021 earnings report: Coca-Cola’s global unit case sales grew 18% year-over-year and Asia Pacific unit case sales grew 16% year-over-year. Meanwhile, in Asia Pacific, the market continues to recover as the epidemic stabilizes.
Business philosophy: I believe that Coca-Cola should continue to develop its long-term goal of becoming a “full-service beverage company”. We will continue to strengthen the competitiveness of our classic brands while bringing new categories and beverage choices to consumers.
How would you sell it/launch it: For the China market, I think Coca-Cola should launch a new marketing campaign. For example, innovate with China’s unique “Chinese zodiac” and incorporate more Chinese culture to attract customers.
Why should consumers buy it? Where are you going to sell it? Due to its localized image, the campaign is designed to reinforce Coca-Cola as a symbol of joy and positive energy. To deeply connect with local consumers and enhance their emotional resonance, thus attracting them to buy.
How much do you need to invest? : Since China is a market that the whole world is currently competing for, I think Coca-Cola should invest as much as possible in marketing. I believe this investment will be proportional to the return.
According to the 2022 annual report of Nike, the biggest market is North America, followed by Europe, Middle East & Africa Market. These two markets both show sales growth while the Greater China Market has a lower revenue with a 6% decrease. From that, I will recommend having a fund for the North American market. Referring to the news that Nike’s biggest rival Adidas stopped cooperation with Kanye West, which means Adidas lost its most profitable product category Yeezy, it’s a good chance for Nike to grab the market share of Adidas, through increasing the brand influence and extend product profile. Nike could invest their money in product design, e-commerce distribution, and social media advertising. It’s critical for Nike to launch stylish and fashionable sneakers to attract and retain customers. At the same time, if Nike supposes to have a new product category, a strategy for digital marketing is a must.
Reference:https://sec.report/Document/0000320187-22-000038/
I think Coca-Cola should invest in the Asian market. The Asian market is an important part of Coca-Cola’s sales. For example, in the Chinese market, Coca-Cola can develop innovative products to enhance business resilience while consolidating its market position as a classic brand. At the same time, the company can expand its supply chain to meet the growing needs of the market. In addition, China has more sales channels, and it can also increase the linkage activities between more products and other IPs, making it easier to expand consumer groups. According to the financial report of Coca-Cola China in the first quarter of 2022, Coca-Cola’s revenue in the first quarter was US$10.491 billion, a year-on-year increase of 16%, exceeding market expectations of US$9.83 billion; operating profit was US$3.405 billion, an increase of 25% year-on-year; net profit It was US$2.793 billion, a year-on-year increase of 24%. In terms of sales volume, the global single-box sales increased by 8% year-on-year; the single-box sales in the Asia-Pacific market increased by 4% year-on-year. Global unit-case sales in the nutritional beverages, juices, dairy and plant-based beverage categories increased 12 percent.
From Disney’s recent annual report, all areas’ revenues has dropped in the great amount from 2019 to 2020. Disney should spend the limited investment on Americas since the report show this area is recovering from the pandemic in a faster speed, and revenue made in Americas has been increased from 51 billion to 54 billion, comparing to smaller growth or decline happing in the rest of the world. I think disney should focusing on streaming services such as Disney +. There is an article reporting “Disney Now Has More Total Streaming Subscriptions Than Netflix — but Disney Generates Much Lower Per-Sub Revenue”. When Disney+ debuted in November 2019, it quickly gained market share by pricing the streamer at the ridiculously cheap price of $6.99 per month. That amounted to roughly half of Netflix’s regular plan at the time. To deeply analyze the characteristics of Dsiney+, we know that its product diversity, and no geographical/device restrictions, be able to awake the user’s sense of identity and even Inspire creativities to contribute to its uniqueness. By putting 2 billion into the Disney+ by advertising, make more collaboration with other streaming channels, producing more movies, as well as buying more copyrights of release of films that fit Disney’s core values, the company would able to gain more profits through executing a reasonably increased in the price. And price increase would be 9.18, which is an extra 15% increase of the original price, and the payback time would larger than five years.
I suggest Coca-Cola should prioritize and invest in Asia market especially in China and India. Till now, the Coca-Cola Company’s Asia Pacific segment features 37 markets, approximately 3.3 billion consumers, and an industry retail value of ~$308 billion. The Asia market accounts for the largest share and is one of the important region segment of Coca-Cola. Suffering from the long-term quarantine period at home or hotel, Asia customers have a larger demand for Coca-Cola sparkling or still beverage, to bring them happiness. According to the 2021 financial report, there was a 10% increase in unit case volume compared to the year 2020, which is a huge growth compared to the other regions Coca-Cola covers.
Nike INC.
Nike should continue to invest more in the Americas.
North America is the number one region from which Nike makes most of its revenue with EMEA being second. From 2021, they have increased revenue by 7% in North America. Meanwhile Greater China has seen a decrease in revenue. Recently we heard that Adidas, Nike’s number 1 competitor, terminated its partnership with Ye (also known as Kanye West). This means that Adidas dropped the Yeezy Brand, which is estimated to cost them 250 million euros. This was one of Adidas best selling footwear. This would be a great opportunity to gain Adidas lost market share from this partnership in North America. Nike should invest more specifically in its product design and digital categories like its digital advertisement and e-commerce. This will increase brand influence, helps build brand loyalty, and capture some of Adidas’ lost market share.
I recommend Coca-Cola invest more in Asia/the rest of the world. North and South America regions account for 45% of Coca-Cola’s annual global sales, and Europe’s revenues stand as the second highest revenue region for Coca-Cola. It is essential to discover more opportunities in developing markets like Asia and the rest of the world. For now, more and more people start to care about their body health due to the pandemic. Consumers start to pay attention to more health-based products, and Coca-Cola has the ability to develop new health-based products and then launch them into the market. Even though there are some companies in Asia that have great products like teas and 0-calories drinks, Coca-Cola has original strong supply chains and brand awareness. The company could have sales activities in most retailers and e-commerce platforms for these new products, and associate with health organizations to attract consumers who pay attention to their health conditions.
My company is McDonald’s Co.. If only one region can investment in marketing, I would suggest to invest in America region. There are serval reasons. First, U.S. is our biggest and most profitable market. From our annual report we can see that U.S. market stands for 44% of our total operating income in 2021, and this number is 40% in 2020 and 48% in 2019. The second reason is that in term of total revenue, our U.S. market grow more stable than markets. Our revenue from U.S. region grown 14% from 2020 to 2021. And during the 2019 pandemic our revenue from international markets dropped 17% and the decrease rate was only 2% for U.S. market. Last but not least, unlike the necessary of high frequent new product launches in International markets to meet the costumers’ l localized need, our classic menu has been the most poplar and profitable in U.S. market. So I think we should put the marketing investment in America region to maintain the growth and avoid risk. I will invest 220 million in America region marketing spending, it is 44% of our average annual marketing spending for last 3 years. if the operating income increases the same rate as 2020, we would expect an incasement of 1200 million in our America region’s operating income and the payback will be 220/1200=0.2 yr.
I think Disney can invest in Europe. Euro Disney has long been a headache for Walt, with countless theme park “latecomers” citing it as an example of what not to do. Faced with such difficulties, Walt Disney announced in 2014 that it would inject another 1 billion euros into Euro Disney to ease its debt of more than $2 billion. This year, Walt’s 1.5 billion euro recapitalisation plan is likely to put an end to Euro Disney’s two decades of accumulated debt. Billions of dollars in capital investment, almost as much as it would cost to build a brand new Disneyland. The $5.5 billion Shanghai resort has been so successful that it has almost been the saviour of Disney’s earnings, according to the company’s recent earnings report. Euro Disney reported a 5% increase in operating income to 354 million euros, including a 3 percent increase in amusement park revenue and a 4 percent increase in revenue at related hotels and villages.
I want to spend the budget in Asia region, and Greater China region specifically. The business idea is to boost sales by advertising and promotion. According to Nike’s annual report, in 2020-2021 their sales growth in Greater China has increased 1.6 billion, which implies highly potential in this area. Besides, due to the lockdown in mainland China, the sales growth was somehow limited and could be increased a lot after the pandemic. Due to the large population in this region, although there’s a severe competition in this area led by other domestic sports brand such as Lining and ANTA, there still contains great potential for Nike to occupy more market share and boost their sales growth.
For Nike, we should pay more attention to North America segment and EMEA segment that contribute 41% and 28% of revenue respectively in FY2022 and both enjoy 15%+ increase in NIKE Direct. Due to the recent negative impact Kanye West (who contributed about 8% of the total revenue of Adidas last year, according to WSJ) has brought to Adidas, we believe there is now an opportunity to attract more customers who were part of Adidas to Nike. That’s why we want to increase our marketing spending by 20% on top of FY 2022, or $770 million in demand creation expense, a major part of which should be invested in North America and EMEA.
Revenue and cost related data from NIKE 10-K Annual Report FY2022:
https://sec.report/Document/0000320187-22-000038/#i46e4e3c717064a3ca53a7fe9eaaaeca4_76
Our company is Coca-Cola. According to the financial statements for 2021, although Coca-Cola’s growth in Asia is not very high, the Asian market is one of the most stable growth regions. So the opportunity in Asia is very big. I would recommend Coca-Cola to do a campaign on Coke Zero in Asia because there is a huge market for Coke Zero as the public is becoming more aware of the importance of health and controlling sugar intake. And the payback of this campaign I think can be controlled to 2 to 3 years.
I think Nike should still put its emphasis on Americas in next year. First of all, North America is Nike’s largest geographic segment, so Nike can get highest payback with limited fund. Second, South America has great potential in digital sales growth since its sales growth was 51% last year. What’s more, Nike app was launched in Mexico last year, so I think Nike can improve their online shopping experience in South America next year. I suggest Nike invest 60 million in this section in Americas and I predict Nike can get payback in the following 3 years.
I would like to suggest Disney invest in America. Due to the 100 years anniversary, we have to invest in the original place, Walt Disney World in Orlando USA. This will have more beneficial to invest in other places because Disney in Orlando has 4 Theme Parks which can increase the budget that customers spend on Disney. In 2021, Disney also gains the highest revenue about 54.15 billion dollars from Americans which is 80% of the company’s revenue. Also, Disney spends a marketing budget of 3.18 billion dollars on the US market.
In my opinion, Coca-Cola should invest in Asia Pacific first. The drinks segment in Asia-Pacific reached a value of $694 billion in 2021, witnessing a significant increase of 11% from the previous year. This was on account of growth in the retail product categories following a recovery in demand in the post COVID-19 pandemic period as brick and mortar stores and online stores resumed their operations after being under restrictions for almost two years. Asia Pacific segment reaches approximately 3.3 billion consumers across 37 markets and holds approximately $308 billion in industry retail value, which means it is the biggest segment for Coca-Cola company.
In the Asia Pacific market, we can invest in new product development. Our new products such as tea and milk tea are more popular in the Asian market than in other markets. Innovation can also be extended beyond product and packaging, by adapting to the method in which our consumers are shopping in a digital world and meeting them with the products, packages and brands they know and love. With the right packaging options, we can solve consumer needs while driving incremental revenue. This is evidenced in China by our launch of 300ML/2L for affordability and sleek cans & mini cans for premiumization, with both strategies gaining at least 3pp of mix during the year.
For Disney, as the annual report have dropped from 2019 to 2021.
I will recommend Disney to invest more on Media and entertainment such as Disney +.
As we know Disney plus have gain lot of subscribers since they launched in 2019 due to the cheap price $6.99 per month. Nowadays, Disney plus have more subscribers than Netflix, however, their revenue has much lower.
To enhance the revenue of Disney plus, we can advertise more on the diversity of Disney+. Disney+ could collaborate with other companies and purchased more film as well.
https://www.latimes.com/entertainment-arts/business/story/2022-11-08/disney-earnings-fourth-quarter-streaming-loses-1-5-billion-hulu-espn-chapek#:~:text=Full-year%20revenue%20surged%2023,58%25%20from%20the%20year%20before.
For Apple, in order to drive future growth, I believe the company should invest in the Asia market, especially in China and India. As the market shows high potential with rising purchasing power and the middle class. As the wearables market shows positive sign of growth, Apple should invest its capital in AR/VR hardware. The market size is approximately 461.25 Billion USD with a CAGR of 41.5%. Meanwhile, iPhone as a cash cow, could continue to grow, especially the higher end product segment. The company could invest in manufacturing the product with more premium material to grow their margin.
I think Coca-Cola should continue to invest in the North American market. First of all, the North American market is the largest part of Coca-Cola’s revenue, with approximately 320 million consumers and approximately $22.8 billion in industry value, contributing 34% of Coca-Cola’s revenue. With such a large consumer base, Coca-Cola should continue to invest in this market to maintain profitability. At the same time, Coke completed the acquisition of BodyArmor and should use the brand to develop and promote new healthy drinks to respond to the demand for healthy drinks. Coke’s investment in North America also includes marketing, including the existing coke studio and web 3.0 which can be combined, to continue to attract potential customers and build brand awareness.
For this payback assignment, the company our team will present is Apple. Personally, I think Apple should invest/fund the money in North/ South America region. By looking at Apple’s 2021 financial report, it showed that Apple generated $153 thousand million sales in Americas region, and that’s almost 42% of Apple’s total net sales. Therefore, investing money in North/South America will have less risk. Moreover, Apple doesn’t seem to have many competitors in the Americas region, the biggest competitor for Apple in this region will be Samsung. However, China, for example, Apple has many competitors other than Samsung such as Huawei, Xiaomi, Oppo etc. It’s more risky if Apple adding fund in China compare to the Americas region, and it will also take longer time to receive paybacks. Hence, I believe Apple should’ve invest/fund money in North/South America.
In my opinion, McDonald’s should invest on marketing in the United States. There are 13,682 stores in the U.S. which constitutes around one-third of the total number of stores it owns. The U.S. sales account for 41% of the total revenue. Since 2013, the company’s revenue has kept declining except for 2021 due to rebound from Covid-19. In order to drive sales growth, I think it should begin with U.S. which is its biggest market. McDonald’s is currently focusing on improving digital channels to increase efficiency as well as customer engagement. They should spend marketing budget to promote their digital system including mobile ordering, payment, delivery, etc. Meanwhile, McDonald’s has also made commitments to produce healthier food. It has been updating food ingredients to ensure that they come from safe sources and no preservatives are added. It has also added salad to the menu. The idea of eating healthy will continue to grow as a trend. I think McDonald’s can invest on creating more options on its menu, and promote the idea that eating healthy can be affordable.
Apple is one of the most influential and valuable companies in the world, especially with the iPhone leading the global smartphone brand. Apple is very successful in the Americas market, its 2022 revenue accounted for 43% of the total global hours, more than Europe and Greater China combined, so I think the U.S. market is more saturated, too much money to invest is not very meaningful. In this era, Asia, especially China and India, is the most promising market. Although there are many cell phone brands in the region, such as Huawei, OPPO and Xiaomi, most of them are positioned in the low to mid-range market, and Apple will occupy the leading position in the local high-end market. Therefore, Apple can actively invest in advertising and promotion to inspire more people to buy Apple and join the Apple ecosystem, thus cultivating their consumption habits, especially in the young. In addition to the regular iPhone products, wearable devices and smart home will be the space for future development, which will bring consumers the experience for the complete ecosystem of Apple products.
For Disney, I think we should invest money in the North America in the next year for the following reasons. First, Asia generally has more strict COVID-19 policies than other areas. For example, Shanghai Disney Resort was closed in March and October, 2021. COVID-19 could be an unstable factor for holding any offline marketing activities. Second, North America is the area we generated most net sales. According to the 2021 annual report, 80% of revenue generated from North America. Third, next year will be Disney’s 100th Anniversary. Disney started its journey in North America. Consumers from North America also have the deepest emotional connection with Disney. Doing marketing in North America is more easily resonated with consumers than in Asia or Europe. For marketing, we can start a new 100th anniversary cruise line or produce limited edition Disney collections. We can also hold a performance with all Disney classic character to attract customers and boost sales of Disney parks and resorts.
My company is Nike. Thus, I think Nike should choose Asia/ rest of the world as the target to spend budget on marketing after I collect the data., Even though the United States has the highest revenue and sales, Nike should invest in some potential markets, such as Asia/ rest of the world, for its long-term development. In the last year, sales in Greater China fell by 9%. Although sales in Greater China are not as good as those in the United States, Greater China is still a market with development potential. The reason is that there are more customers in Greater China and have a certain purchasing power. Therefore, my business idea is to strengthen the service in the stores and continue to launch co-branded styles with various brands. I estimate that the manufacturing cost for 3 years is about 90 million US dollars, and the sales volume is 30,000 million. Nike should continue to release new sneaker styles through cooperation with other brands. And nike needs to increase the amount of sales in stores so that more young people can participate. By doing this, I think nike can fully pay off in 3 years.
I like Disney, and I know Disney well. Between America, Asia and Europe I would choose South America.
• Business idea
Building a new Disney theme park in the South America, the target city is Brazil, and the
annual revenue of the parks, experiences, and products segment is increased by 6 percent.
• Revenue & Cost
As a well-known company in the entertainment and leisure industry, Disney is mainly
composed of two parts: parks, experiences, and products, as well as media and entertainment.
The company’s most profitable area as of Nov. 30, 2022, is its media and entertainment segment,
which generated $55 billion in revenue in 2022. And the parks, experiences, and products
segment, as the second-largest revenue source, generated nearly $29 billion in total revenue,
about $12 billion more than last year. Regarding regional distribution, the company’s largest
region is the Americas, which has a total of 68.22 billion; the second one is Europe, which has a
total of 8.68 billion.
• Strategic Plan
According to an analysis of the existing Disney parks, building a new Disneyland would
cost around $400 million, take 18 months, and require more than 9,000 workers (Building
Disney World, 2021). The cost is enormous, but the profit for each Disney park should be
noticeable. According to the data statistics of the first quarter of 2022 (90 days), the revenue of
the whole Disney parks is as high as $7.234 billion, and the revenue is as high as $80.38 million
per day (Pixie Dust and Passports). In other words, the daily revenue of each Disney park is
about 7 million. Hence, this investment is profitable.
($80.38/12 parks) = 6.69 ~7 million per day per park
• Reasons for Strategic Plan
1. Why invest in the second-largest revenue source, the parks, experiences, and products
segment?
Theme parks and their products are not Disney’s most significant revenue source as of
2022, but their prospects are promising. Since the pandemic in 2020, all entertainment-related
industries have been hit hard. For all of 2021, only 51 million people visited Disney’s seven most
famous parks, far fewer than the 89 million reported two years ago, according to the data
(Blooloop, n.d.). With the gradual opening up of various countries to the epidemic, Disney’s
theme park industry is also gradually recovering. Compared with the Year 2021, the revenue
increased by around 12 million. Therefore, although this sector is not the most significant source
of revenue, it is still worth developing and investing in.
2. Why choose the new Disney park in South America?
According to the above revenue statistics, Americas has the top revenue and operating
income in 2022. So we chose to make the market investment in Brazil. As one of the tourist
centres in the world, Brazil is one of the tourist attractions that many tourists must check out. It
would be a great place to build a Disney park because the crowds peak during special holidays,
like the Olympics or the World Cup.
3.Why set the goal to increase by 5% in the parks, experiences, and products segment?
According to the data, the parks, experiences, and products segment in 2022 will bring a
total of 29 billion. The Walt Disney Company has 12 theme parks, so the average revenue of
each theme park is $2.4 billion. After establishing a new theme park, the annual revenue forecast
should be around $31 billion, an increase of about 6 percent.
4. Why will the customer “buy” it?
When people talk about Disney, many people’s first idea is the theme park. Its decoration
and entertainment immensely attract consumers, and it is one of the best places for leisure and
recreation. Therefore, after a new theme park is built, it is bound to attract many tourists to punch
in and sightsee. Secondly, due to the epidemic outbreak, people can not travel as usual, and the
tourism industry of various countries has been dramatically affected. Therefore in the next few
years, tourism will be a way to promote economic prosperity, and Disney will be a trendy place.
• Payback Calculation
We invest $400 million to build a new Disney Park. Based on the 2022 annual report
data, there is $29 billion in the segment of parks, experiences, and products. There are 12 Disney
parks in the world across six different resorts (Mouse Hacking, 2022). So by calculation, for each
Disney part, the annual revenue should be around $2.4 billion. The forecast revenue for the new
park per year is still $2.4 billion, and we do not assume the revenue for the new park will keep
increasing. Also, based on Yahoo Finance, the net margin in the 2021 annual report is 3.9%, and
we choose to maintain it. Hence, the payback time will be five years.
Investing in Asia could be a strategic move. Asia is home to some of the largest and fastest growing economies in the world, including China, India, Japan and South Korea. The region is expected to continue to grow at a faster rate than the rest of the world, providing ample opportunities for companies seeking to expand their market share. In addition, Asia has a growing middle class with increasing purchasing power, which makes it an attractive target market for the banking industry.
If a company decides to launch a new product or service, they need to consider development and marketing costs, sales price, revenue potential, and payback period. For example, let’s say the company plans to launch a new digital banking platform targeting the Chinese middle class at an estimated cost of $5 million and users paying $2 per month. In this case, if they are able to acquire 100,000 new customers, the payback period would be 5M/(12*2*30000)=2.1 year.
JP Morgan could apply this tactic to obtain a deeper comprehension of the local market and access to local knowledge by forming partnerships with local businesses. This can entail collaborating with regionally established technology firms, banks, and other financial organizations. By forming these alliances, JP Morgan could gain access to local market knowledge, cultural understanding, and regulatory insights that could enable the bank customize its goods and services to meet the needs of regional clients. Additionally, JP Morgan might be able to manage the complicated regulatory regimes that exist in many Asian nations with the use of relationships with regional businesses. As a way to establish a strong local presence, acquire access to local knowledge, and gain a thorough grasp of the local market dynamics, developing alliances with local businesses is a valuable approach for JP Morgan.
Launch a new student JP Morgan-Chase credit card with the lower annual rate and some support benefits for students. JP Morgan will choose the first region to launch and promote this card is North American. This region has a lot of schools and universities. The main customers of JP Morgan also in this area. The new card issuance fee will be $7.5 million. Annual fee is $75. First year revenue will be $10 million with a growth rate of 15%. So, the revenue in 3 years is $34.73 million. Use a variety of marketing tactics to promote new credit cards such as print and broadcast advertising, social media campaigns, public relations, and targeted direct mail. There are also attractive bonus programs for students. Customer services before, during and after card opening will be applied. Students can go to JP Morgan bank or open a credit card via the online app. The marketing expense is $2 million. Therefore the total investment will be $9.5 million (card launching fee + marketing expense), and the revenue for a year is $10 million. So, the payback time is 0.95 (more than 11 months).
McDonald’s should still consider investing in marketing for the Americas region (North and South). Based on the fourth-quarter financial performance, McDonald’s has experienced strong comparable sales across all components, with the U.S. having a substantial increase of 10.3%. Further, the U.S. market contributed the highest fraction of the company’s revenue, demonstrating the region’s importance to its financial success.
Continually investing in U.S. marketing will benefit McDonald’s to maintain its market dominance and drive sales growth in the Americas region even further. Successful planning of the strategic menu price increase with the exponential growth in customers and bringing back menu items like McRib and marketing campaigns such as Cactus Plant Flea Market promotion or launching collaborations with celebrities and pop culture icons. In addition, the contribution to the strong sales results in McDonald’s leveraging growth of digital and delivery channels to enhance its marketing strategies, which indicates the importance of continued investing to maintain also increase brand recognition and loyalty. These actions have proven the significance of the company’s marketing efforts.
I think investing in Asia is a good strategic choice. JPMorgan Chase’s revenues are primarily generated in the Americas, accounting for 71% of total revenues, so continuing to invest in the Americas will not generate high enough returns.Economic conditions in Asia have rebounded tremendously after the epidemic and there is huge room for growth. For example, the nft trading platform, which is more mature in North America, is still in a relatively chaotic stage in Asia. If JPMorgan Chase chooses to invest $5 million, it will be able to harvest over 500,000 new customers. The reason I inferred is that the nft trading platform in Asia now does not have such a strong financial background as JP Morgan. If JP Morgan gets $1 per trade and each client trades once a month, the payback period would be 10 months.
First it is important to recognize, that all three regions are important for Starbucks as a company. America because it generates the highest amount of revenue, Asia because it is a growing market and Europe because of their strung coffee culture and huge potential. With that being said , I think we should still focus our expansion plans on America since it produces the largest amount of revenue. Also, coffee culture in America has been growing with more specialty coffee shops appearing all around the country. As well other kinds of beverages like boba have transitioned into American culture and are rising in popularity. With that being said I think Starbucks should release a new type of store during its current expansion that will attract that attract people who are looking for more sophisticated/elaborate drinks. In other words, it would be a similar concept to the reserve but on a smaller scale. I believe this is not only a good idea but something necessary as many Starbucks customers are switching to the more elaborate coffee culture. In order to launch this new prototype of store, I think it would be best to do a soft scale launch in bigger cities like New York and Chicago. As well promotion will play a very important part for this to be successful, which will consist of digital media ads and some TV advertising. With that being said if we invested initially 73 million dollars, cost of 36.4 (13%) million and incremental sales of 280 million, it would take us around 4 years to break even.
Looking at the operating result by segment, 44% of this is attributable to the internationally operated stores. In addition, the internationally operated stores generated 53% of total sales.
The increase in operating earnings is attributable to a strong sales performance, particularly in the UK and France. The increase in sales in international stores was reflected in strong sales performance across all segments and was driven by the UK, France and Russia.
Compared to the U.S., the international markets have higher sales and operating results, particularly in the U.K. and France.
So my first recommendation would be to focus on Europe as a region, specifically we will focus on the product launch in the UK.
My suggestion would be to increase sales by 5% in the UK and therefore in the international markets. To this end, we will double the advertising budget in the UK.
McDonalds spent $89.74 million on advertising in the UK in 2021. So we will increase the advertising spend to 179.48 million USD.
According to McDonalds annual report of 2021, sales revenue in international markets was 120.9 million USD and the comparable sales increase in internationally operated markets was 21.6%. We expect our increase in advertising to increase sales by an additional 5%, or to 26.6%. Our incremental net sales thus amount to USD 153 million in the first year.
With this strategy, our cumulative cash flow in the third year is positive at USD 69 million.
The 2022 Annual report (Form 10-k) shows that the most profitable region for Starbucks and its largest consumer market is the United States. Its 2022 Net Sales (in millions $) were 23,366, compared to China with 3,008 and the rest of the world (including Europe and the rest of Asia) with 5,876. The Beverage segment is also the most profitable, with $19,555 million in 2022 sales, compared to Food with 5,804 and Other with 6,891. Therefore I would like to focus the marketing investment on the United States Beverage market. The Beverage segment grew 6.7% from 2021 to 2022, but it dropped from 63% to 61% of overall revenue. If the percentage of revenue was to be maintained, it should have grown by 10.9%, therefore this is the level of growth they should aim for the next fiscal year – a 4.2% increase (for simplification, I will round to 4%) In 2022, Starbucks spent $416.7 million in advertising, which is about 1.6% of its total global revenue. This is extremely low, and can be temporarily increased by 10x to 16% of incremental net sales. Given these changes, payback will take approximately 1 year and 72 months, with an excess of $31 million at the end of the second year.
In my opinion, McDonald’s should choose to invest in Asia. In the investment, McDonald’s can choose to cooperate with Asian cultural brands, introduce new product flavors and packaging, and combine hamburgers with Asian popular culture. In McDonald’s annual report, sales in Asia increased by 13% in 2021, proving there are still potential sales opportunities in Asia.
For example, CLOT, McDonald’s and CLOT have collaborated to launch packaging with Chinese silk prints. This unique package will be sold at McDonald’s restaurants in China and promoted on social media. Each box will include CLOT silk cards as a collection. This package will sell for $15, with 10000 units sold each month, and a year’s sales will be $1.8 million. McDonald’s needs to invest $2 million to produce CLOT packages. Therefore, McDonald’s payback period is 1.1 years. Through brand cooperation strategies, McDonald‘s can attract fans from different brands and improve the visibility of its products. McDonald’s hamburgers will not just be basic food, but a popular cultural sign. In other words, proper brand marketing can improve McDonald‘s brand image and sales possibilities.
From my opinion, McDonald’s is supposed to mainly invest in Asia. According to the data, it shows that McDonald’s are going to open about 1900 stores, mostly in China. China is the second largest market for the company, and focus on adjust the flavor in order to fulfill the taste of local people that is the key reason why McDonald’s can make revenue success in China. Even though markets in US still dominates, the potential of Asia markets can achieve more development. McDonald’s can consider to collaborate with Asian brand, such as cartoon characters or classic elements. For instance, the collaboration with Sanrio makes a huge profit, because the ability of purchase of female in Asian market is quite powerful. In order to make more opportunities, McDonald’s could continue doing this kind of collaborations to attract more younger generation customers.
According to LVMH’s annual financial report from 2020 to 2022, the Asian region has always accounted for the most significant total revenue in the past three years, accounting for 34%, 35%, and 30%, respectively. The second-ranked region by revenue is the United States, which has maintained a steady growth in revenue from 2020 to 2022. Although the total income of the Asian region is still higher than that of the United States, from 2021 to 2022, the proportion of the Asian region to LVMH’s total annual revenue will decrease by 5%. The decrease in revenue proves that neither the weakening of the impact of Covid 19 on the global economy nor the reopening of China has played a positive role in the growth of LVMH’s sales in Asia. The sharp slowdown in the growth rate of the total revenue in the Asian market makes its development in the coming year unpredictable. Due to the limited funds available for marketing in 2023, the Asian region cannot be the primary funding target for LVMH. Therefore, LVMH should concentrate its marketing investment in the United States and focus on marketing the Fashion and Leather Goods business unit. According to LVMH’s financial report, the revenue of the Fashion and Leather Goods department will account for 49% of LVMH’s total revenue in 2022. In addition, the Selective retailing department has also become the second business unit with the accelerated growth of Sephora’s sales. The luxury industry has rebounded strongly from the coronavirus crisis. In this case, we should increase the marketing budget in its region to accelerate sales growth.
LVMH has also made Louis Vuitton the favorite luxury brand of millennials and Generation Z through celebrity effects. The appearance of Louis Vuitton’s products on young and promising celebrities such as Billie Eilish or Jaden Smith is an excellent way to promote the brand. In 2022, LVMH’s global advertising and promotion expenditure will be 9502 million euros, an increase of 2211 million euros compared with 2021. With increased marketing expenditure, LVMH’s profit in 2022 will hit a historical record. In 2022, Louis Vuitton had a collab with Nike to broaden the audience of its brand further, and it is also a very successful joint activity. The collaboration activities have further enhanced the product awareness of Louis Vuitton and created more possibilities for its future development. Therefore, this year, spending LVMH’s marketing money on the US region will help the company generate more revenue.
For LVMH, I would recommend investing in Europe.
LVMH recorded revenue of €79.2 billion in 2022 and profit from recurring operations of €21.1 billion, both up 23%. We saw revenue growth in Europe, the US, and Japan. However, a looming recession is clouding luxury’s outlook in the US. Growth in the US luxury market is also slowing. In Q4 2022, LVMH’s Americas sales slowed to 7% growth, compared to high growth rates in Europe (22%). Asia is still impacted in Q4 by health situation in China. Therefore, focusing on Europe would be a safe option due to its solid domestic demand, alongside a boost from tourist shoppers.
Our marketing and selling expenses totaled 28,151 million euros in 2022, a 35.6% of revenue, up 0.8 points from the previous fiscal year. This increase in marketing and selling expenses was mainly due to higher communications investments as well as the development of retail networks. Among these marketing and selling expenses, advertising and promotion costs amounted to 12% of revenue, increasing by 25% on a constant consolidation scope and currency basis.
Europe delivered an excellent performance in 2022, overall sales in Europe rose 35% on an organic basis versus 2021. According to Technavio, Europe is estimated to account for 35% of the personal luxury goods market’s growth from 2022 to 2027. We aim to maintain the remarkable pace of growth in Europe. To this end, LVMH will continue to invest in the constant reinvention of its iconic product lines, advertise and promote its designs by featuring fashion shows, openings and events in France, further develop its retail network and its manufacturing sites in Europe. I suggest an investment of 19.8 billion euros in the European market.
Sources:
https://r.lvmh-static.com/uploads/2023/01/document-financier-2022-en-final.pdf
https://www.voguebusiness.com/consumers/luxurys-us-outlook-darkens-after-growth-surge
https://www.prnewswire.com/news-releases/personal-luxury-goods-market-europe-is-estimated-to-account-for-35-of-the-markets-growth-from-2022-to-2027—technavio-301722180.html
The business idea is to promote Dolby Atmos due to how many users in Apple Music use it. The reason is to simultaneously promote a feature that will allow us to attract consumers from competitor’s and then also retrieve lost costumers. Around 80% of Apple Users used Spatial Audio with support for Dolby Atmos, which is a large amount. I feel we can take advantage of this by implementing the new feature to attract consumers!
The cost should not be too high due to Apple Music already funding and developing Dolby Atmos. Spotify just needs to convert it for their platform. The estimate would be around $25.56 million in licensing (as seen below) so that would be the cost. For the sales price, Spotify premium plan won’t change in terms of price. We are trying to focus on the gaining new customers or have lost ones return.
We will sell it by adding it to Spotify Premium only, not the free version of Spotify which gives an incentive for free users to upgrade to Premium and for users for left to come back.
Consumers will buy it since Spotify’s main focus is on music. If there is a feature that allows music to be listened to in a different way, consumers will be intrigued. This is showcased by Apple Music’s audience and the magnitude they utilize Dolby Atmos. We will sell it in the U.S because although Europe has the highest share, Spotify is the most popular in the U.S (has the highest average daily usage in minutes compared to everywhere else). They will be more likely to want to use a feature that allows them to listen to music differently.
Since Dolby Atmos has already been completed, the main issue is licensing fees. The cost of licensing (profit for Dolby Atmos) was $61,597 in 2022. In 2016, Dolby received around $20 million from Apple for licensing Dolby Digital Plus audio so we can assume that Spotify would probably need to pay more (due to inflation). Since there was around a 3.36% inflation per year since 2016, we can assume that the amount to license now would be around $25.56 million (due to inflation calculator).
Sources:
https://www.musicbusinessworldwide.com/over-80-of-apple-music-subscribers-listened-to-spatial-audio-in-2022/#:~:text=Over%2080%25%20of%20Apple%20Music%20subscribers%20listened%20to%20Spatial%20Audio%20in%202022,-January%2012%2C%202023&text=2022%20was%20the%20first%20full,worldwide%20subscribers%20enjoyed%20the%20feature.
https://www.businessofapps.com/data/spotify-statistics/
https://www.investors.com/news/technology/dolby-laboratories-gets-lift-from-apple-amazon-netflix/#:~:text=In%20Q3%2C%20Dolby%20also%20received,software%20for%20iPhones%20and%20iPads.
https://www.officialdata.org/us/inflation/2016?amount=20
We plan to expand the Indian market and increase marketing investment for iPhones. We expect that through our investment, the proportion of iPhone sales in the Indian market will increase from 4% to 10% in 2027.
In 2022, Apple’s sales in the Rest of Asia Pacific region increased by 11% compared with 2021. In the second quarter of 2023, India’s iPhone sales not only surpassed Germany and France, but fell behind only the four major markets of the United Kingdom, Japan, China, and the United States. It proved its worth and entered the top five markets for Apple’s iPhone sales for the first time. At the same time, the purchasing power of Indians has increased in the past decade, and India’s middle class is growing. Apple has huge potential in India.
Apple’s marketing expenses have always accounted for a small proportion of the company’s total revenue. In 2022, Apple’s marketing and administrative expenses will be 25,094 million, accounting for only 6% of Apple’s total revenue. We expect to invest approximately 150 million to expand our retail business and provide consumers with an immersive product experience.
We estimate Incremental Net Sales to be 500 million per year. Apple’s net profit margin in 2022 will be 26%, and our payback time will be 150/128=1.2 years.
Reference:
https://www.wsj.com/market-data/quotes/AAPL/financials/annual/income-statement
I believe when considering investments in different regions like Asia (and rest of the world), Europe, and the Americas, CEOs should typically evaluate all factors such as market size, growth potential, competition, regulatory environment, and infrastructure.
For example, Asia has a rapidly growing consumer market, with countries like China and India experiencing substantial economic growth and an expanding middle class where has the potential customers for us. Meanwhile, there is also be increasing trend of e-commerce in Asia, making it an attractive market for Amazon. However, expanding Amazon’s business in Asia can be challenging due to regulatory complexities and differences in consumer behavior and preferences. In fact, Amazon’s Asian market share is relatively small, and having many competitors like Alibaba is one reason why.
Europe，on the other hand, represents a significant consumer market with relatively stable economic conditions and high purchasing power. But Amazon also have to faces competition from well-established e-commerce players like Zalando, and local players in various European countries as well.
Therefore, considering the international sector of Amazon’s financial report is declining even when the e-commerce demands are increasing, I would strongly recommend the senior decision makers of Amazon continuously invest in American Markets. Americas. Firstly, the Americas, particularly the United States, is a mature e-commerce market with high levels of consumer spending online while Amazon has a strong presence in the U.S., and the regulatory environment is well understood. Meanwhile, the U.S. has a well-developed logistics network, which can be advantageous for Amazon’s operations. And finally, Amazon has a strong market share in the Americas, especially North America, which laid a solid foundation for Amazon’s leadership in the e-commerce industry.
Btw, when considering the reason why investing American Market would give Amazon a good payback, we need to understand that the United States is one of the largest and most mature e-commerce markets in the world. It has a high level of internet penetration, a tech-savvy consumer base, and a culture of online shopping. This presents a substantial revenue opportunity for Amazon. At the same time, Amazon is already a well-entrenched player in the U.S. market. It has built a strong brand and customer loyalty over these years, with a vast customer. Leveraging its existing infrastructure and reputation can provide a competitive advantage. Another thing is, Amazon’s cloud computing department, AWS, has a significant presence in the U.S. and is a major revenue generator. By investing in the U.S. market, Amazon can continue to capitalize on AWS’ growth and profitability.
· What is the business idea?
Invested in Direct-to-Consumer and reached a new cooperation with Mattel Entertainment to create a new DTC sector streaming Barbie live-action TV series/movies.
The reason for making this choice is that DTC will have stable growth as long as it has relatively outstanding content revenue. DMED’s losses are mainly in linear networks. But this growth is insignificant, so we decided to have some innovative measures to motivate consumers.
Revenue & Cost: estimate the cost to make, sales price, and revenue for 3 years
Cost: Referring to other similar adapted movies or IP movies, we will invest 5-10 million per episode for the production, and 30 million for advertising.
Price: The Barbie series will also be included in the content available for any purchase of plans/ bundles
Revenue: We are expecting to earn at least twice the budget invested, and be able to start the production of subsequent gatherings after the first series. Calculated based on one series per year, and each series will earn at least 460 million.
· How are you going to sell it/launch it?
First, produce and release a 5-10 episode series, then adjust the format (films or series), production rate, and promotion decisions of this section based on the consumer response.
· Why would consumers buy it? And where are you going to sell it?
Barbie film achieved a sensational success
The series will be available for all regions. But based on the box office results in regions other than the United States, most of the advertising and promotional works will focus on Europe and countries with larger markets in Asia and Latin America (like China and Brazil) to explore more potential markets
· How much do you need to invest?
Referring to other similar adapted movies or IP movies, we will invest 5-10 million per episode for the production, and 30 million for advertising. The plan is to make at least 1 reproduction of the real-life Barbie series per year.
For Disney, the company needs to focus its marketing efforts on the Americas. The first reason is that Americas is still Disney’s largest market, accounting for an estimated 53.9% of total industry revenue. Disney has shown more substantial market share, profit, and revenue growth than its peers.
The European market revenue is 8.68 billion, Asia is 6.8 billion, and the American revenue is approximately 68.22 billion US dollars. Therefore, Disney continues to focus on the American market. With the end of COVID-19 and the effects of Disney’s 100th anniversary, newly opened projects, and rising ticket prices, Disneyland’s revenue will continue to grow.
I recommend a marketing investment budget of at least $5 million. I think the money put into the Americas guarantees more sales. The payback period is expected to be between one and two years.
Starting from 2023, I believe Disney should further increase its investment in the Disney Parks, Experiences, and Products (DPEP) segment. According to Statista’s data, the Americas region shows tremendous potential in Disney’s revenue. In 2022, the Americas region generated $68.218 billion in revenue, nearly ten times that of the Asia-Pacific region ($6.847 billion) and Europe ($8.68 billion). This trend has been ongoing for over a decade, indicating significant growth potential for Disney in the Americas. Therefore, I recommend allocating limited funds to the Americas region to achieve greater returns.
Our business idea involves expanding Disney theme parks in the Americas, innovating park themes, and collaborating with more films to attract visitors. At the same time, we plan to expand Disney cruise routes in the Americas, providing more travel options. Over the next three years, we plan to invest approximately $40 billion to expand and innovate existing Disney parks in the United States and launch new cruise routes. Due to the substantial investment, we anticipate ticket prices for parks and cruises will increase. Currently, park ticket prices are categorized as Tier 0 and Tier 1, at $104 and $119, respectively. We estimate that ticket prices may increase by 10% over the next three years. As for cruises, the average price for a five-night Western Caribbean cruise is $3,700 currently, and we also expect a 10% increase over the next three years. Based on 2022 data, Disney’s global revenue reached $83 billion. With the planned investment over the next three years, we project total revenue to reach $90 billion three years from now.
We plan to sell tickets at existing Disney theme park locations, online, and through major travel agencies. Cruise tickets will be sold through various channels, including online platforms and collaborative travel agencies. To inform consumers about our changes, we will invite well-known social media influencers for promotion and organize various marketing events targeting Disney enthusiasts, families, and tourists. The Americas region has a large consumer base, especially in the United States. The U.S. has numerous loyal Disney fans with a deep emotional connection to Disney characters and stories, making them likely to be attracted to the new version of Disney. Additionally, the expanded Disney parks will feature major collaborations with well-known IP projects, potentially attracting more visitors.
This strategy will leverage the strong appeal of the Disney brand in the Americas region by expanding theme parks and cruise services, leading to significant revenue growth.
Source:
https://www.statista.com/statistics/273555/global-revenue-of-the-walt-disney-company/
https://www.statista.com/statistics/193263/revenue-of-the-walt-disney-company-in-different-regions/#:~:text=In%202021%2C%20the%20Walt%20Disney,to%2065.39%20billion%20U.S.%20dollars
https://thewaltdisneycompany.com/disney-plans-to-expand-investment-in-parks-business/
Asia is a market with huge potential and Apple’s sales are rising in Asia in the last two years. Apple’s business idea is based on innovative and consumer-centered devices that innovate all convenient features for the consumer. the actual cost of an iPhone phone is around $500, and the selling price is usually around $1,000, so the net profit of each iPhone reaches $500. Based on Apple’s iPhone sales performance over the past 3 years, the average number of iPhones sold per year is about 220 million units. Therefore we can estimate that the revenue for the next 3 years can reach 660 million dollars. We can highlight the difference between Apple’s cell phone and its competitors through differentiation, such as hardware innovation, exclusive features, and design. Depending on the cost over the next 3 years, we may need to invest approximately $1 billion to expand into the Asian market and increase sales.
Source：https://www.investopedia.com/financial-edge/0912/the-cost-of-making-an-iphone.aspx
https://www.businessofapps.com/data/apple-statistics/
I think Apple should increase investment in retail stores in the Chinese mainland market in the Asian market. Apple has 46 retail stores in China, which is less than one-fifth of the number of retail stores in the United States. We expect to invest 8 billion dollars in opening Apple retail stores in China.
The Chinese market currently accounts for about 20% of Apple’s global sales, and there is still huge room for development. In addition, among all factories in Apple’s supply chain, the number of factories in China accounts for about 48%, nearly half, with 297 factories. In China, Jiangsu, Guangdong, and Shanghai account for 61% of Apple’s total factories in China and one-third of Apple’s total factories worldwide. It can be seen that China is a major manufacturing center for Apple, so it is more convenient for Apple products to be sold in China.
In addition, opening retail stores in China will greatly expand the coverage of Apple Stores, making it more convenient for users. It will also help Apple better communicate and educate users.
Source: https://www.statista.com/study/80555/consumer-electronics-ce-in-the-us/
Walmart’s advertising costs were $4.1 billion, $3.9 billion and $3.2 billion for fiscal 2023, 2022 and 2021, respectively. Gross profit rate decreased 85 basis points for fiscal 2023 and increased 51 basis points for fiscal 2022, when compared to the respective previous fiscal year. With limited marketing expense, I suggest Walmart to invest on the area that generates highest return. As Walmart’s annual report indicates, the North America market has historically had the highest gross profit as a percentage of net sales. I propose to launch an innovative general merchandise products line in the America region. First, this business idea aligns with Walmart’s strategy. Walmart is planning to enhance its performance on general merchandise category as it has higher profit margin. As inflation went down for grocery, consumers have more money to spend on general merchandise products. Second, this business idea enhance Walmart’s financial performance. The net sales of general merchandise in U.S. is $118,597 million with a growth rate of -5.78% in 2023 and $125,876 million with a growth rate of 5.42% in 2022. Our advertising investment of $500 million aims to boost the sales to $124,527 millions with a growth rate at 5%, matching with the growth rate of the previous fiscal year.
SOURCE:
https://s201.q4cdn.com/262069030/files/doc_financials/2023/ar/Walmart-10K-Reports-Optimized.pdf
https://www.retaildive.com/news/walmart-cautious-guidance-inflation/643161/
https://www.pymnts.com/walmart/2023/walmart-predicts-shift-away-from-grocery-as-food-inflation-slows/
Unilever should focus its marketing investments on Asia/rest of the world. According to the data in 2022, nearly 60% of Unilever’s turnover came from emerging markets. Especially, the market led by China and India has grown by 11.2% in 2022, because of the increasing disposable incomes and changing consumer preferences, emerging markets may offer significant opportunities.
Moreover, the 2022 annual report data shows that sales in Asia and the Pacific are 27,504 million euros, sales in the Americas are 20,905 million euros, and sales in Europe are 11,664 million euros. Therefore, Unilever should continue to focus its marketing investments on Asia/rest of the world to maintain strong sales growth. Based on Unilever spending a total of €7,821 million on brand and marketing investments in 2022, I recommend a marketing investment of €2 billion in Asia/rest of the world to drive continued sales growth in the region. The payback period should be one year.
Source: https://www.unilever.com/files/92ui5egz/production/257f12db9c95ffa2ed12d6f2e2b3ff67db49fd60.pdf
In terms of Disney DMED department, I strongly recommend Disney prioritize the European market for its international streaming strategy.
In 2022, despite its vital role and possession of 40% of the total subscribers of Americas in streaming services, revenue growth was more modest in US and Canada vs other markets. Like Disney subscription in Asia-Pacific region has added up to 68.8 million, while in Europe, a significant growth of 4 million paid subscribes have been observed, which has marked a rate of 23.6% year over year. Over the course of the year, Disney+ has ranked third in subscribers in Europe following Netflix and Amazon with a market share of over 11%.
Especially in German and UK, the early introduction of Prime Video and Netflix make it challenging for new entrants like Disney+ to enter the market. However, Disney did expand their reach with their family-oriented strategy and exclusive series to attract the Disney fans. According to CEO Bob lger, over 60 million originals will be released by 2024 in Europe exclusively on Disney+. The high percentage of an English-speaking population, the positive attitude towards streaming services, and the high levels of SVOD penetration would be their key to success. A gradual shift towards co-productions and third-party licensing could also be taken into consideration for Disney to save budgets in a two-year period facing the high inflation in the western economics. So personally, its good time to reduce the reliance on US market and expand its European businesses.
https://www.spglobal.com/marketintelligence/en/news-insights/research/disney-plus-global-subscriber-estimates-year-end-2022
In 2022, Disney generated a total revenue of $8.68 billion in Europe with DMED accounting for nearly 66%, and Disney spent $5.05 billion on advertising in total last year, thus I recommend a investment of at least $1 billion on European market, which will lead to an estimated payback of 1.5 years.
https://www.statista.com/statistics/192122/us-ad-spending-of-the-walt-disney-company/
Our company is Disney, we recommend investing in the American region in 2022. According to Disney 2022 revenues by regions, Disney Americas has pulled in at least 7 times the money earned in Europe and Asia. Because Asia is now heavily hit by COVID-19, delving further into marketing for this market is not worthwhile. Europe is still recovering, and Disney is not as well-known as it is in the United States. The Americas will create 68M in 2021, compared to 9M in Europe and 7M in Asia. The demand is coming from the Americas, which is also where the majority of the money is coming from. Disney has added new attractions to their Orlando parks, created the Star Wars cruise experience resort, added new material to Disneyplus, and continues to provide new experiences to their fans. Disney has to focus their marketing efforts on the Americas because this is their key source of business and income.
https://www.statista.com/statistics/193263/revenue-of-the-walt-disney-company-in-different-regions/
I tend to invest that money in the Asia Pacific area of Disney. Since there still a large chance to increase the revenues from that area. According to the 2022 annual report on geographical base, Americas market generated $68,218 million, Europe gained $8,680 million while the number of Asia Pacific area only had $6,874 million. And in the past three years, the revenue from Asian area kept in the level of $6000m, which exists a large gap compared with the other two markets, thus making Asia to be a great potential area to gain more revenues and realize the growth. From statements in annual report, the DMED revenue in Asia area is less than that of other two markets, which is also the reason why it had quiet large gap in total revenue, so more marketing funds should be invested in Asia Pacific market. Also, Disney+ had gained 100,000 subscribers in North America, where it launched first and has little room left to grow.
For the marketing plan, Disney should invest Local content and make subscriber-based distribution partnerships with telcos and third parties as the cultures and languages is critical to the success on the content or product in Asia market and it is necessary to make promotions.
In Australia, New Zealand, Japan, Singapore, Korea, Hong Kong and Taiwan, Disney Plus can promote a new and higher plan with popular content. Take the number form Variety’s forecast in 2021, The monthly revenues is $8.50 per customer in 2021, I assume that number will be $9 per customer (including consideration of inflation rate in Asia Pacific about 3.5% in 2022 and 2023), and then Disney can achieving total subscriptions of 8 million across those seven markets (take the number in 2022 is about 7 million in Asia pacific market as example). If we invest $1 billion in Asia pacific market, as it will generate $864m in next year, the investment will be recovered in two years.
References:
https://thewaltdisneycompany.com/app/uploads/2023/02/2022-Annual-Report.pdf
https://variety.com/2021/streaming/asia/netflix-disney-plus-taking-different-tracks-in-asia-pacific-report-1234913991/
https://www.statista.com/chart/21614/disney-plus-subscribers/
To address this strategic challenge for Unilever, I’ll focus on the Americas region. The business idea is launching a line of eco-friendly, sustainable personal care products, which can cater to the demand for environmentally responsible products in Americans. Manufacturing these products using some sustainable materials and processes might be slightly higher than traditional methods, estimated cost about $2 per unit. To maintain competitiveness and appeal, the sales price is set at $5 per unit. Assuming a gradual market penetration, we estimate selling 500,000 units in first year, 1 million units in second year, and 1.5 million units in third year.
Revenue Projection:
Year 1: 500,000 units x $5 = $2.5 million
Year 2: 1,000,000 units x $5 = $5 million
Year 3: 1,500,000 units x $5 = $7.5 million
Sales & Launch Strategy:
Online & Offline Presence: Utilize both e-commerce platforms and brick-and-mortar retail stores for product distribution.
Influencer & Social Media Campaigns: Collaborate with local influencers and run targeted social media campaigns to reach a wider audience.
Campaigns: Highlight the importance of sustainable living and how these products contribute to it.
Quality and Brand Trust: Leverage Unilever’s reputation for quality to gain consumer trust.
The rising awareness and concern for the environment among consumers in Americans will buy these products. It aligns with global sustainability trends, leverages Unilever’s brand reputation, and taps into a growing, eco-conscious consumer base. The financial projections suggest a solid payback and potential for significant growth in revenue, making this region and strategy a compelling choice for Unilever’s limited marketing investment.
The goal is to extend Amazon’s market share out of North America, enhancing Amazon’s presence in emerging markets within the Asia/Rest of the World region, particularly targeting countries like India, Indonesia, and Brazil. These markets have rapidly growing middle-class populations, increasing internet penetration, and a growing appetite for e-commerce. Amazon can offer services and interfaces in local languages, and initial discount offers and bundled deals to attract customers. The sales channels will be online platform on the Amazon app to avoid additinal operating expenses such as rent. The convenience that Amazon can bring and the reputation Amazon developed over the years will attract customers. Total investment will be approximately $150 million for initial setup, including marketing, logistics, platform development, and partnership establishment.
Revenue:
Year 1: Estimated revenue of $100 million, considering initial market penetration and brand establishment.Year 2: Growth to $250 million as the market presence solidifies.Year 3: Target revenue of $500 million with expanded market share and brand loyalty.
Net Revenue Calculation:(assume the costs are 30% of the revenue each year)
Year 1: $100 million revenue – 30% = $70 million net revenue.
Year 2: $250 million revenue – 30% = $175 million net revenue.
Year 3: $500 million revenue – 30% = $350 million net revenue.
The payback period for the proposed investment in expanding Amazon’s e-commerce platform in the Asia/Rest of the World region is approximately 2 years.
Asia/rest of the world should be funded. According to the report from statista, Asia/rest of the world accounts for the largest proportion of revenue. In 2022, revenue of UK is 2498 million, US is 12,122 million and Asia/rest of the world is 45,453 million. Unilever’s brand investment worldwide increased to roughly 7.8 billion dollars in 2022. In view of the proportion of sales and marketing budget, I think the Asian market should be the main development focus in order to maintain the steady growth of sales.
We will launch new product collections, cost is 3 dollars, price is 6 dollars.Assuming a gradual market penetration, we estimate selling 500,000 units in first year, 1 million units in second year, and 1.5 million units in third year.
Revenue Projection:
Year 1: 500,000 units x $6 = $3 million
Year 2: 1,000,000 units x $6 = $6 million
Year 3: 1,500,000 units x $6 = $9 million
We will use multiple channels to inform consumers the new products, such as TV advertisement, influencer……
The investment will be 1.5 million. The payback will be 0.5 year.
https://www.statista.com/statistics/269195/revenue-of-the-unilever-group-by-region/
https://www.statista.com/statistics/600133/univelever-marketing-spend/
For LVMH, I think they should prioritize Asia (excluding Japan). In 2023, Asia (excluding Japan) generated 31% of their 86.2 billion euros revenue. So considering they already have a big foot in the door in Asia, establishing a stronger presence in Asia will help LVMH’s long-term success and brand recognition. Additionally, as the world’s fastest-growing luxury market, Asia offers immense potential for expansion. As for new launches, I wouldn’t recommend pursuing them at the moment. LVMH operates as a house of brands, encompassing multiple brands across various sectors, including fashion, cosmetics, and perfumes. Instead of introducing new products, LVMH could leverage its existing portfolio to cater to diverse consumer preferences within the Asian market. By optimizing marketing efforts for their existing brands, LVMH can capitalize on the region’s growth potential while simultaneously reinforcing its position as a leader in the luxury industry.
https://r.lvmh-static.com/uploads/2024/01/lvmh_2023-annual-results.pdf
Marketing Proposal:
I will suggest Disney to develop a new business idea in its Theme Parks for the Asia Market. To be more specific, I will suggest Disney to launch a new cartoon character IP in three Asia theme parks, and also develop a cartoon character IP interactive experiences, shows, accessories and theme hotel business.
Reasons:
1.Disney has six theme parks worldwide, and three of which are located in Asia. Therefore Asia is the largest market for Disney parks.
2.Due to the construction of new themes in Disney’s theme parks in Asia in 2023, there was a significant investment in construction costs. Therefore, setting up a new cartoon character IP for promotion in the theme parks is a relatively low-cost investment. According to the successful launching of Linabell in Shanghai Disney Resort in 2021, it shows that the cute new cartoon character will be very popular with young female consumers in Asia, so it’s likely that this promotion will also bring a high profit for Disney.
Calculation of Payback:
-Investment: Disney made it clear in 2023 that it would spend $60 billion on theme parks over the next decade. Assuming that investment costs are evenly divided, Disney will invest a total of $3 billion in theme parks across the three Asian regions in 2024. This includes investments in the cartoon IP launching and investments in related experiences and services.
-Net Income:Assuming a steady increase in market share, the net income of Disney theme parks in Asia area would be about $1.7 billion.
-Payback: According to the investment and net income, the payback will be 1.8 year.
Given the unique position of Disney as a global entertainment powerhouse, we should focus on a strategy tailored for the Asia/rest of the world region. This region offers vast growth opportunities due to its large, diverse populations, growing middle class, and increasing digital consumption trends. The business idea will center around expanding Disney’s streaming service, Disney+, with a focus on local content creation and partnership models.
Business Idea: Localized Content Expansion for Disney+ in Asia
Why Asia/rest of the world?
Rapid Digital Growth: Asia is experiencing rapid growth in digital infrastructure, making streaming services more accessible.
Cultural Diversity: There’s a rich tapestry of cultures and languages, offering the opportunity to create or license a wide variety of local content.
Growing Middle Class: The expanding middle class has more disposable income for entertainment.
Revenue & Cost Estimates
Cost to Make: Initial content creation and licensing, technology upgrades, and marketing: $200 million.
Sales Price: Continuing with Disney+’s subscription model, let’s estimate a slightly lower price to adjust for local purchasing power, say $6/month.
Revenue for 3 Years: Assuming an initial subscriber base of 5 million in the first year, with a 30% growth year-over-year.
Launch Strategy
Local Content: Develop or license local shows and movies, incorporating local cultures and languages.
Partnerships: Collaborate with local telecom providers for bundled services and better accessibility.
Marketing: Use localized marketing campaigns highlighting local content along with Disney’s global hits.
Consumer Appeal
Localized Content: Offering content that resonates with local cultures and languages.
Global Favorites: Access to Disney’s vast library of movies, series, and exclusive content.
Affordability: Competitive pricing to make it an attractive option for a wide audience.
Sales Locations
Primarily online through the Disney+ platform, with potential bundled offers through local telecom services and partnerships.
Investment Requirement
Initial Investment: $200 million focusing on content creation/licensing, technology, and market penetration efforts.
Payback Calculation
Estimating the revenue based on the initial subscriber base and growth, and compare it against the investment.
Year 1 Revenue: 5 million subscribers * $6 * 12 months = $360 million.
Year 2 Revenue: Assuming a 30% increase in subscribers: 6.5 million subscribers * $6 * 12 = $468 million.
Year 3 Revenue: Assuming a further 30% increase: 8.45 million subscribers * $6 * 12 = $608.4 million.
Total Revenue over 3 Years: $1,436.4 million.
The payback period based on these estimates.
The strategy to expand Disney+ with localized content in Asia/rest of the world is projected to generate a net profit of $1,236.4 million over 3 years, with an initial investment of $200 million. The total revenue over this period is expected to be $1,436.4 million. This substantial revenue and profit indicate a strong return on investment, making a compelling case for prioritizing marketing and investment dollars in Asia/rest of the world.
This approach capitalizes on the growing digital consumption trends, the demand for localized content, and the strength of Disney’s brand and existing content library. It addresses the unique characteristics and opportunities within the Asian market, ensuring that Disney+ becomes a dominant streaming service by catering specifically to the diverse tastes and preferences of the region’s audiences.
Microsoft New cloud Storage system:
I will choose Asian, The Asian market has the world’s fastest growing economies and strong demand for technology products and services. Asian users have a higher acceptance of new technologies, and it is easier to get a quick response to a new product or service launched by Microsoft. By providing cost-effective cloud storage solutions, it enables Small size company to take advantage of the most advanced technologies to improve operational efficiency and market competitiveness.
Manufacturing costs: Considering that the main cost of cloud services lies in infrastructure construction and maintenance, it is expected that the cost will gradually decrease in the first three years as the user base grows. Assume an initial investment of $1 billion for building data centers and software development. Using a subscription model, companies subscribe to the service on a monthly basis, with the base package priced at $1,000 per month. And suppose 10,000 businesses subscribe in the first year, 30,000 in the second, and 50,000 in the third. Revenue in its first year was $120 million. $360 million in the second year and $560 million in the third.
1. The business plan for Disney aims to increase customer loyalty in Asia within the next three years and boost brand awareness among younger generations with increased attached focus on streaming media service Disney+ and construction and promotion of the Disneyland theme parks and resorts. Expand market share in key Asian regions over the next three years.
2. The sales growth for Disney is assumed to maintain at its current level with a 11% growth in Disney+ service, and a 16% growth in experiences segment, which includes The sale of admissions to theme parks, food, beverage and merchandise at our theme parks and resorts, room nights at hotels, cruise vacations, sales and rentals of vacation club properties, royalties from licensing our IP for use on consumer goods and the sale of branded merchandise. Sponsorships and co-branding opportunities, real estate rent and sales, and royalties from Tokyo Disney Resort.
3. Strategy: Produce region-specific content, including movies, TV shows, and merchandise, featuring beloved Disney characters reimagined within Asian cultural contexts. Collaborate with local artists, filmmakers, and influencers to co-create content that resonates with diverse Asian audiences. Organize cultural events, festivals, and themed attractions that celebrate Asian heritage and traditions while showcasing Disney’s iconic storytelling. For example, the movie Turning Red was related by many Asian teenagers and gained popularity in many key Asian regions in 2022. On the other hand, invest in the expansion and enhancement of existing Disney theme parks in Shanghai, Hong Kong and Tokyo by introducing new attractions, themed lands, and immersive experiences. The new Zootopia park in Shanghai Disneyland is helping Disney gain more admissions during the past months in China.
4. According to Top Global Licensors Report 2023, the value of Disney’s licensing business reached $61.7 billion in 2022, ranking No 1 globally. This data showcases the possibility and popularity of Disney’s IP in China. It will be an opportunity for Disney to maintain and attract more loyal customers.
5. Where: Asia
6. Investment Calculation: initial investment required for advertising:
According to Disney, $60B will be allocated in theme park investment and expand in the future 10 years. Annual growth rate: 14%
Incremental Net Sales: $7,000M (based on $ 48,969M total revenue in 2023 (Experiences segments).
Annual Net Cash Flow = $7,000 million – $60 billion = $700 million – $60 billion = -$53,000 million
Y1: 53000-7000*1.14=45020
Y2: 45020-7000*1.14*1.14=35923
Y3: 25552
Y4: 15181
Y5: 3358
The payback period for the investment in advertising and theme park expansion is 6 years.
With Disney trying really emphasizing their goal to become profitable in streaming I believe that they should really target the high demand for sports in the Asian market. Specifically cricket which is one of the most is one of the most popular sport in countries like India, Pakistan, and Sri Lanka. In fact the ICC Men’s World Cup final between India and Australia recorded the highest viewership on the Disney-Hotstar platform in India, reaching a remarkable 59 million viewers. This is a huge market that marketing resources should really be allocated to in order to grow the it’s streaming segments. The marketing idea I have in mind is that users who purchase a year subscription to view cricket matches exclusively on Disney-Hostar will receive a choice of either Disney plus, Hulu, or ESPN plus free. They would also be able to purchase the other two subscriptions at a discounted rate. This is turn would allow Disney to draw in more subscribers to a new segment of their streaming services while also incentivizing them subscribe to their main platforms at a reduced rate.
Advertising would be done through:
– Television advertising
– social media campaigns with famous influencers for example Virat Kohli is the most-followed Indian cricketer with over 267 million followers on Instagram alone.
– Paid search advertising
Initial Investment: $150 Million
Average cost of services provided would be around $10
We would see a 20% increase year over year
Year 1 Revenue: 2 million subscribers at $10 for 12 months = $240 million.
Year 2 Revenue: With a 20% increase in subscribers we would be at 2.4 million subscribers at $10 for 12 months = $288 million.
Year 3 Revenue: With another 20% increase in subscribers we would be at 2.88 million subscribers at $10 per month for 12 months = $345.6 million
The payback would be seen within the first year.
For Disney, I prefer to focus on Asia. Although the number of subscriptions in Asia decreased by 39% in 2023, Asia is the most populous region in the world, and Disney already has millions of subscribers in Asia, showing the large market potential. The ARPU(Average revenue per user) in Asia declined from $0.88 to $0.66. However, the revenue could be grown hugely through the marketing campaign.
The prices of Disney+ in Asia are different according to different countries. For example, in Singapore, the monthly fee is $8.8. In Japan, the monthly fee is $9. But the monthly fees can be lower in India and Indonesia. After calculating, the average price of monthly fee in Asia is $4.
To promote Disney+ in Asia, the business idea is Disney should increase its variety of content especially local content and obtain more broadcasting rights of Asian sports competitions and variety shows to attract more audience. Launching a new advertising campaign highlighting exclusive content, Disney plans to release 50 original Asian content productions in the Asia-Pacific region by 2023, averaging more than 16 productions per year. Disney can collaborate with mobile operators for joint bundle plans that include free trials or discounted subscriptions.
Consumers are drawn to Disney because it offers a unique content mix, combining international brands like Disney, Marvel, and Pixar with popular local Asian content. The monthly fees in Asia are much cheaper than other regions, which suit the payment capabilities of users in the Asian market.
Assuming that Disney’s annual advertising costs in the Asian market are $100 million, in order to promote Disney+ in Asia and increase user growth, it plans to increase advertising investment to $150 million. The subscribers in Asia 2023 are 37 million. The subscribers will be increased averagely by 10% per year. According to Disney 2023 annual report, the gross margin is 35%.
The first year:
Subscribers in total: 37*1.10=40.70 million
Annual revenue: 4*40.70*12=1935.6 million
Net income: 2042.4*35%=683.7 million
The second year:
Subscribers in total: 40.70*1.10=44.77 million
Annual revenue: 4*44.77*12=2148.9 million
Net income: 2148.9*35%=752.1 million
The third year:
Subscribers in total: 44.77*1.10=49.24 million
Annual revenue: 4*49.24*12=2363.8 million
Net income: 2363.8*35%=827.3million
Payback calculation:
Assuming in past 3 years, Disney+ had 35 million subscribers per year averagely.
The total net income in past 3 years: 4*35*36*35%=1764 million
The total net income for future 3 years: 683.7+752.1+827.3=2263.2 million
Money Disney makes: 499.2
Payback: 150/499.2=0.3 0.3*36=10.8 month
Disney’s investment payback in Asia is less than 11 months
For the Disney company, I believe we should choose Asian as the region for this marketing activity. My idea is provide new children oriented amusement facility for family. Because after Covid-19, family with children are tend to bring their children to play or trip, this proposal may draw their attention in ideal situation.
Revenue & Cost Estimates
Assuming the construction cost for the new amusement facility is 200 million RMB. We plan to generate revenue through ticket sales, food and beverage, and merchandise.
Revenue Estimates:
Increase in visitors by 1 million people annually
Tickets: Average price of 300 RMB, annual revenue of 300 million RMB
Food and merchandise: Average spending of 100 RMB, annual revenue of 100 million RMB
Total revenue over three years: 1.2 billion RMB
Cost Estimates:
Construction cost: 200 million RMB
Operational costs (including maintenance, staff salaries): 50 million RMB per year, totaling 150 million RMB over three years
Total cost: 350 million RMB
Net Profit: 1.2 billion – 350 million = 850 million RMB
Sales and Marketing Strategy
Extensive promotion on local online platforms such as Weibo, Ticktok
Collaborations with local schools for student group visits.
conclusion:
Total investment needed is 200 million RMB for the construction of the new facility. The investment is expected to be earning money within about three year, considering the annual net profits and the initial investment, with the facilities starting to generate net profits from the third year.
Business Idea: Expand Lululemon’s presence in Asia, specifically in China, through a targeted campaign and exclusive product launch to drive demand and revenue growth.
Revenue and Cost Estimates: We estimate incremental sales of $10 million over three years. With an average sales price of $90 per item, this results in 111,111 additional units sold over the three-year period.
Gross Profit Calculation: Using Lululemon’s gross profit margin of 57% from the annual report, we can calculate the incremental gross profit as Gross Profit = 10 million x 0.57 = 5.7 million
Marketing Strategy: We’ll invest in targeted digital advertising through WeChat and Tmall, leveraging platforms popular in China to maximize reach. We will also partner with influencers in the fitness and lifestyle space who resonate with our target demographic.
Product Launch: Introduce a limited-edition “Lululemon Asia” collection that includes exclusive colors and designs inspired by local trends.
Investment Calculation: Based on Lululemon’s advertising spend and industry costs for campaigns in Asia, we recommend a marketing investment of $3 million. This will cover digital ads, influencer partnerships, and in-store events.
Annual Gross Profit = 5.7 million/3 = 1.9 million
Payback Period = 3 million/1.9 million = 1.6 years
Investing in Asia is a strategic choice, aligning with our growth objectives and and brand positioning in Asia. With an estimated 19-month payback period, this plan ensures a ROI within two years.
Asia, excluding Japan, is a good strategic choice for LVMH’s marketing investment. The region reports a relative stronger post-COVID recovery, particularly in China, and its substantial contribution to the brand’s revenue. In 2023, it accounted for 31% of LVMH’s total revenue, increasing 1% from 2022. While the percentage is still at loss from the reported 35% in 2021, the trend suggest a gradual comeback in demand for luxury products for Asia (excluding Japan). Marketing investment here entails release of limited-edition, culturally themed items celebrating key regional events like Lunar New Year, Diwali and Mid-Autumn Festival. Collaborating with local artists and artisans would add a layer of cultural authenticity, creating unique designs that resonate deeply with the values and tastes of Asian consumers. This strategy isn’t just about products; it’s about creating a connection with local culture that would likely enhance brand loyalty and elevate LVMH’s standing in the region in the long-term.
The idea is to sell around 50,000 units in the first year, growing to 100,000 by year three, with an estimated sales price of €1,500 per unit. The total cost to manufacture and market these items would be around €48.75 million in the first year, increasing to €85.65 million by the third year. This investment would be supported by targeted marketing campaigns in high-end publications like Vogue China and Vogue Philippines. This omnichannel approach, blending physical pop-ups with digital content can engage a wide audience across Asia, especially in cities like Shanghai, Hong Kong, and Singapore, where demand for luxury goods is high.
Asian consumers appreciate high-quality, exclusive products with cultural significance, and these limited-edition items would likely appeal to affluent buyers seeking uniqueness and meaning. By working with local artisans, the products would carry an authenticity that elevates them beyond typical luxury goods. Pop-up stores in high-end shopping areas and flagship locations, combined with online channels, would capture both in-person and digital shoppers in the region. Since, the luxury industry is much to do with marketing, and LVMH’s overall marketing expenses reports a 35.7% of revenue. The projected payback period of around two years aligns with the potential for growth in Asia’s luxury market, especially as the region continues its economic recovery.
Business Idea:
Considering China is the second-largest market for Lululemon, our company has decided to increase its investment in the Chinese market.
Revenue & Cost:
We estimate that there will be a $20 million revenue increase over three years, and the price per unit is $150. According to the annual report for Lululemon in 2024, the gross profit margin is 58%, so the gross profit for the next three years is $20 million * 0.58 = $11.6 million, and per year is $11.6 million / 3 = $3.87 million.
Strategy:
We have decided to localize the products for the Chinese market, such as merging the Chinese culture and using some Chinese elements in our products. Also, we are going to launch a combination with some local Chinese brands to expand our market and get a two-win with other brands. We will invite some celebrities to get more exposure and use social media platforms such as Red and TikTok to maximize reach.
Investment and Payback
The investment is about $5 million, so the payback period is $5 million / $3.87 million = 1.3 years. That is about 16 months.
Asia has become a strategic focus for Estee Lauder’s marketing investment due to its strong post-pandemic recovery and growing demand for high-end skin care products. The region, especially China, is experiencing a strong economic rebound, and consumers are showing a preference for high-end and culturally resonant products. In 2023, Asia’s net sales were US$5.194 billion, accounting for 33% of Estee Lauder’s global revenue, and there is still a lot of room for growth.
To seize this opportunity, Estee Lauder can launch a limited edition skin care series in Asia, develop skin care products that are more suitable for Asian skin, add local Asian ingredients, make the packaging more in line with Asian aesthetics, and combine local festivals such as the New Year for marketing.
The new skincare series, priced at $150 per piece, is projected to sell 500,000 units in the first year, reaching 1 million by year three, generating $337.5 million in revenue. With production and marketing costs at $180 million, the initial $50 million investment, covering R&D, packaging, and marketing, will be recovered within 1.5 years. By year three, profits are expected to total $157.5 million.
The total initial investment for this strategy is $50 million, aligning with Estée Lauder’s long-term growth objectives and strengthening its brand positioning in key Asian markets. With an estimated 18-month payback period, this investment ensures ROI within two years, leveraging the region’s robust post-pandemic recovery and rising demand for premium skincare.
Business Idea:
China is the world’s largest EV market, with strong government support, good charging infrastructure, and consumers open to new vehicle technology. Funding the launch of the Tesla Model Ω in this region would help Tesla further reinforce its position in one of the biggest EV markets and reach new customers in emerging areas. Hence our company chose Asia as the region to launch this new product.
Revenue & Cost:
Estimated Production Cost: $25,000 per vehicle.
Sales Price: $40,000 per vehicle.
Year 1: Expected to sell 30,000 units: $1.2 billion in revenue.
Year 2: Expected to sell 50,000 units: $2.0 billion in revenue.
Year 3: Expected to sell 80,000 units: $3.2 billion in revenue.
Total Revenue (3 Years): $6.4 billion.
Total Costs (3 Years): $800 million initial investment + $750 million (manufacturing cost for 30,000 units in Year 1) + $1.25 billion (manufacturing cost for 50,000 units in Year 2) + $2 billion (manufacturing cost for 80,000 units in Year 3) = $4.8 billion.
Payback Period: Approximately 2.5 years to recover the $4.8 billion.
Sales Strategy
The Launch Locations will focus mainly on well-developed cities in China, India, and South Korea. Sales channels will combine both online and offline channels, Online sales through Tesla’s website, and physical showrooms in busy urban areas. Digital marketing on diverse local platforms like WeChat and Instagram. Sponsor local events and collaborate with influencers for better exposure.
Consumers in Asia will purchase the Tesla Model Ω due to its affordable price, making it accessible to middle-class families and young professionals. In addition, Tesla is seen as a leading innovator in EV technology, and there is a strong sense of prestige connecting with owning a Tesla in many Asian markets.
Total Initial Investment: $800 million.
Manufacturing Facility Expansion: $400 million (including expansion of Gigafactory Shanghai).
Marketing and Promotion: $200 million.
R&D and Localization: $150 million (including software customization for local market needs).
Charging Infrastructure Support and Partnerships: $50 million.
Business Idea
This two-seat EV is compact and designed for high-traffic cities like New York and Shanghai, appealing to urban dwellers who need flexibility in congested areas. It offers a sustainable, convenient, and affordable transport solution that’s easy to park and navigate in crowded spaces.
Revenue Projections
Sales Price: The car would be priced around $20,000–$25,000 to be competitive yet profitable.
Year 1: Target 5,000 units = $100M–$125M revenue.
Year 2: Target 15,000 units = $300M–$375M revenue.
Year 3: Target 30,000 units = $600M–$750M revenue.
With Tesla’s average gross margin of around 20%, the projected gross profit could range from $20M in Year 1 to $150M by Year 3.
Sales and Launch Strategy
Launch Cities: Initial launch in New York and Shanghai, emphasizing ease of parking, lower emissions, and savings on fuel and maintenance.
Sales Channels: Direct online sales, Tesla showrooms, and partnerships with urban mobility services like ride-sharing and micro-mobility providers.
Marketing: Leverage social media and digital campaigns targeting young professionals, environmentally-conscious urbanites, and city commuters.
Consumer Appeal
Consumers would be attracted to the car for its affordability, eco-friendliness, and convenience in urban settings. The compact size and ease of parking are major advantages, particularly in congested areas where space is limited and parking is expensive.
Sales Regions
Primary focus would be on cities like New York, Shanghai, Los Angeles, and Tokyo. Based on demand, the strategy could expand to other cities known for traffic congestion and limited parking.
I’m going to choose Americas as the region to launch the new pet care product and invest our limited marketing funds in that region.
According to Nestle’s 2023 financial report, North America is the largest consumer market for it and Purina PetCare is the largest growth contributor. And The Americas, particularly the U.S. and Brazil, are among the largest pet care markets globally. Consumers are increasingly focused on quality, healthy pet products.
Revenue & Cost Estimation (3 Years):
Our products are priced at $30 per unit, and we expect to sell 1 million units in the first year, reach 2 million units in the third year, and realize a total revenue of $60 million within the first three years. We already have existing factories, so the initial investment amount is for marketing and R&D, totaling $30 million, with a payback of two years.
Sales channels will cover major pet stores, e-commerce platforms (e.g. Amazon and Chewy), and veterinary clinics, with a marketing strategy that includes digital advertisements, pet netizen partnerships, and offline promotions. With the product’s health benefits, quality formulation and market growth potential, we believe that the new Purina PetCare product can quickly capture the market and generate substantial returns for the company, making it a worthwhile investment in the region.