1. The Walt Disney Company
Disney Vacation Club
Sarah Kinser
8/13/2015

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Table of Contents
Company Overview..........................................................................................................................2
Goals.................................................................................................................................................2
External Analysis..............................................................................................................................3
Macroeconomic Environmental Analysis..........................................................................................3
Economic Trends ........................................................................................................................4
Social/Cultural Trends.................................................................................................................4
SWOT Analysis ..............................................................................................................................4
Strengths ....................................................................................................................................4
Weaknesses................................................................................................................................5
Opportunities ..............................................................................................................................6
Threats.......................................................................................................................................7
Internal Analysis...............................................................................................................................7
Asset Analysis ................................................................................................................................7
Core Competences ..........................................................................................................................8
Quality Service ...........................................................................................................................8
Brand.........................................................................................................................................9
Competitive Advantage ...................................................................................................................9
Game Plan........................................................................................................................................9
Ownership Options .........................................................................................................................9
Set Weeks..................................................................................................................................... 10
Purchase Back Program................................................................................................................. 11
Recommendation and Expected Results..........................................................................................11

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Company Overview
“I only hope that we don’t lose sight of one thing – that it was all started by a mouse;” the
Walt Disney Company remembers this quote with every development and addition, merger
opportunity, new business ventures, and even down to the princesses that greet our guests in our
parks (Walt, n.d.).
The Disney Vacation Club (DVC) was founded in 1991as a timeshare of a very different
nature (Wills, n.d.). Members are not restricted to one single property nor are they forced to take
a certain length of vacation. DVC was designed to be user friendly and to be as flexible as its
members. The strategy DVC chose to follow is the Focused Differentiation Strategy. DVC
focuses on a very small number of guests that visit the different Disney Parks and Resorts. This
allows them to provide excellent and memorable service. Each DVC member is treated as part of
a big family and are welcomed home with every visit.
DVC has 13 different resorts that members call ‘home’. A resort is considered a ‘home
resort’ to members that own points at that resort. This does not restrict these members to only
this resort or keep other members out. Members receive a few more perks at their ‘home resorts’.
One of the major perks is that members can book their vacations as early as 11 months out at
their ‘home resorts’. This allows them to stay exactly where they want to during their vacations.
The Focused Differentiation Strategy can also be seen when comparing DVC with other
timeshares in the area. DVC members do not buy one particular room and have to wait for their
week there for their vacation. They have the freedom to book at any resort in either Walt Disney
World or Disneyland. Members also get the freedom of deciding how long of a vacation they
want and can book as many vacations they want as long as their points hold out.
Goals
With DVC entering its 25th year in 2016, now is the time for them to consider what is in
the future for them. Each ‘home resort’ is purchased for 50 years from the date the resort opened,
not from the date of purchase. This means that many locations are getting close to their half-life
mark. At the half-life mark, properties start to lose value to the new consumers. Why would they
purchase into a ‘home resort’ that is at this point when there are many ‘home resorts’ with longer
lives?

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Another issue that is becoming more apparent is that many members reach a point in their
membership when they are looking into sell their points. Currently, DVC does not have a
buyback program where they purchases points back from their members. Members have to hunt
out a third party that is willing to buy their points at a cheaper price and then sell them at a
premium to other individuals. These second owners, however, are not eligible to partake in many
of the perks that first owners receive. Some of these perks include discounts on merchandise and
food, early booking window, or membership events.
DVC is faced with the problem of having a very limited resource (time-shares) that it is
allowed to sell for each ‘home resort’. With a limited resource and high demand, the price per
point continues to rise with each new ‘home resort’ option. Price is a major reason why many
guests are unable to become DVC members.
Unlike buying an actual piece of property or building, DVC members are stuck with a
‘home resort’ until their contracts run out at the 50 year mark. This is a major problem because
many members feel stuck and that they are missing out on other opportunities that newer
members are getting to participant in.
External Analysis
Macroeconomic EnvironmentalAnalysis
Economic Trends
DVC membership is greatly affected by members’ disposable income levels. When
members have more disposable incomes, they are more likely to want to purchase more points
and take longer vacations. On the flip side, when disposable income is low, members are more
likely to bank their points. Interest rates and inflation affect annual fees and purchase price every
year. This in turn has an effect on how fast members are able to pay back the purchase price and
how many points they are willing to purchase in the first place.

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Social/Cultural Trends
Many families have branched out from the traditional family size of four individuals
(mom, dad, daughter, and son). Some vacationers have extended their trips to more than just
their one small family unit. Guests invite their in-laws, family friends, and nannies on their
family vacation. With these additions, guests are constantly looking for ways to save money even
while they are vacation. DVC is designed to be a way for them to save the most money and get
the most out of their vacation. Many of the newer resorts have added permanent fifth sleeping
spot and reconfigured the space in the rooms to accommodate more individuals.
SWOT Analysis
S
 Cheaper vacation options
 Strong advertising for a unique product
W
 Limited points available
 Narrow target market
O
 Developing new products
 Expanding target market
T
 Other timeshares
 Unpredictable success
Strengths
Cheaper vacation options
When DVC members use their points to book their trips, they are actually saving money.
Members have their points for a maximum of 50 years and many of them pay off their expenses

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10 years into their ownership, except for the annual fees. A good way to look at this is by
looking at a current example. The minimum points a first time member can purchase is 100
points and at Disney’s Polynesian Villas & Bungalows each point cost $165.00 (Membership,
2015). This equates to a purchase price of $16,500.00 with an additional $50.14 for annual fees
(Membership, 2015). If a member wanted to stay in a Deluxe Studio at the Polynesian for 3
nights in the Magic Season (June 11 – August 15) it would cost them 91 of their 100 points. If a
non-member booked this same vacation in cash, it would $3,000 (Disney’s, 2015). If each guest
continued taking the exact same trip for 10 years, the member would have already paid off their
membership purchase price while the non-member would have spent a minimum of $30,000.
Strong advertising for a unique product
DVC is not like other timeshares. Points can be used to stay in any of the resorts across
Walt Disney World and Disneyland. They can also be used to take trips. These trips can be on
through the Disney Cruise Line or through Adventures by Disney. Each of these trips allows the
members to visit new places and learn about cultures first-hand in ways they never expected to.
Weaknesses
Limited points available
Each ‘home resort’ has a set number of points that are allowed to be sold and once that
number is reached, no more can be created. The number of points available depends on how
many rooms have been designated at DVC rooms. Many guests request to be added to waiting
lists for their favorite ‘home resorts’ in hopes of a current member releasing their points at some
point in the future. Guests can be on these waiting lists for years and still never get their names
called.

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Narrow target market
DVC wants to attract guests that plan on going on any type of Disney vacation at least
once a year and have enough funds for the different point levels. Potential members must be able
to speak and read in either English or Spanish, this is because contract on only available at this
time in these two languages. The purchase price is what greatly reduces the number of guests
that are willing to become members.
Opportunities
Developing new products
DVC has the opportunity to continue to grow. Disney has plans to open their new resort
at Shanghai in 2016 (Smith, 2015). New ‘home resorts’ could be built up around this new park.
This would not only be an opportunity for members to have a new ‘home resort’, but also give
them a reason to visit a country and get drawn into the culture.
Expanding target market
With the opening of Shanghai Disneyland, DVC has the chance to gain new members
because contracts can be written up in a language these guests easily understand. The people of
China have a much easier commute to this new location than to any of the locations in the United
States. This allows them to become the biggest purchasing power for DVC in Shanghai
Disneyland.

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Threats
Other timeshares
This may come as a shock to many of our members, but DVC is not the only timeshare
possibility on the market. In Orlando alone, timeshares are abundant. One of the major
competitors is Resort Condominiums International (RCI) with over 3 million members (RCI,
2015).
Unpredictable success
While DVC may be experiencing its highest number of members in its history, there is no
certainty that their membership numbers will continue in this fashion in the coming years.
Another unpredictable factor is the number of ‘home resorts’ that will be available to future
guests looking to become members.
Internal Analysis
AssetAnalysis
The major assets of DVC include the resorts, points, and booking windows. Each of these
elements are examined twice; first when DVC is considering building a new ‘home resort’ and
second when guests are deciding to make a purchase
Each of the DVC ‘home resorts’ go along with a particular theme and everything inside,
around, and near the resort follow that theme. The newest addition to the DVC ‘home resorts’ is
the Polynesian resort, which follows a South-Pacific theming. Guests are surrounded by tiki
statues, Hawaiian music and even Hawaiian food. In most evenings, guests can catch a luau
show right off the beach. The rooms keep the theme alive through their décor, including pictures

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of Lilo and Stitch enjoying their night on the Hawaiian beach. The Bungalows are right off the
beach facing the Magic Kingdom, which allows them to have fantastic views of the Magic
Kingdom’s firework show, Wishes.
The points are the actually product being sold to the members. Depending on how many
points the member wishes to purchase will dictate where they can stay and for how long. In the
previous example, a member purchasing 100 points a year can only stay at the Polynesian
Deluxe Studios for three nights during Magic Season [91 points] (Disney’s, 2015). This member
could take their same points over to Disney’s Animal Kingdom Villas and stay for a week during
Magic Season [95 points] (Disney’s, 2015). Three years’ worth of points can be used during one
transaction. This is done through banking and borrowing points. Members can bank their
previous or current year and borrow from the next year. This allows many members to take
either bigger or longer vacations.
Members are able to book their vacations up to 11 months before their arrival date at their
‘home resort’ and 6 months at any other resort. This 11 month window comes in handy when
members are planning vacations around holidays or if their ‘home resort’ is extremely popular
and fills up quickly. Members can also be placed on wait list for certain locations for their
vacations if they were unable to book their stay where they really wish to be.
Core Competences
Quality Service
DVC stands very firm in making sure their members have the vacation they have been
dreaming about, whether that has been just a week of dreaming or two years. This is why the
quality of the service is very important. Each DVC Cast Member is put through additional
training to insure they are able to provide service that is above and beyond what the members
expect. Cast Members are also trained to problem solve and do whatever it takes to turn a bad
experience around.

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Brand
The DVC brand stands out from other timeshares because of its association with the Walt
Disney Company and the product it is known for. Members associate DVC with the experiences
they have. When they share their experiences with friends and family, the DVC brand grows.
The brand of DVC thrives on excellent customer experiences and the values of the company as a
whole.
Competitive Advantage
DVC has a leg up on the competition thanks to the Walt Disney Company. Guests will
gravitate towards DVC over another timeshare if they plan on using the timeshare to go on a
vacation to any of the Disney parks. By staying at one of the Disney resorts, guests are given free
transportation to and from the Orlando International Airport and to all of the parks on property.
Guests are also allowed to visit and dine at any of the resorts. DVC members also enjoy
discounts at a majority of the restaurants, on tickets, and at many of the resorts if they are not
using their points. No other timeshare in the area can boost these advantages.
Game Plan
Ownership Options
One option that DVC should consider to give their members a better overall experience is
to offer different lengths of membership. Currently, the only option is the 50 years since the
opening day of the specific ‘home resort’. Many potential members may see this length of time
as too long of a commitment. Additional length options for these guests to consider can be
broken down to 10 years, 15 years, 25 years, and then 50 years. All of these plans would start
from the date of purchase, including the 50 years. This would give guests five different plans
they could join, depending on which fit their lives the best at the time of purchase.
These different options would allow guests to no longer feel trapped by a timeshare and
that they are free to vacation in more than just Disney approved locations. Another advantage is

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that guests might be more willing to purchase a timeshare if they do not feel like they are adding
on another mortgage.
While the guests might like more length options, this plan has the potential to hinder
DVC. Guests that take shorter times will not bring in as much money to DVC and their bottom
line could end up getting hurt the most. Another disadvantage is that DVC will have to keep
track of individual contracts’ end dates instead of knowing that all contracts for one ‘home
resort’ end on the same day. DVC will not have an easy time knowing when they are able to sell
these points again to other guests or members.
Set Weeks
A second option for improvement for DVC is to add a set week option to contracts. This
would allow guests to only take vacations in the specific window they purchased their points for.
DVC will be able to judge better when their rooms will be filled and who will be filling them.
This will help them predict if they are free to open DVC rooms up to guests willing to pay for
them in cash.
Having set weeks, DVC has the potential to double or triple sell points/room space. With
this added feature, DVC will have the opportunity to gain more for the available rooms. Even
more guests will be able to call resorts their ‘home resort’ than ever before. This will also reduce
the need of a wait list and will allow many more guests to become members.
This plan will work out very well, until a member wants to either change their set weeks
to a different time or wish to use it once in a different window. The potential to run out of space
is great with this plan. In order for this plan to work effectively, DVC has to rely on each
member to only take their vacations during the times they signed up for. Guests run into the risk
of losing their weeks if they are unable to use them. Some of the more common reasons guests
will be unable to use their weeks include: not being able to get the time off, having to make up
sick days, deciding to vacation at a different vacation, or school calendars changing from year to
year.

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Purchase Back Program
This recommendation is to add a feature to the contracts that DVC will directly purchase
points back from members, at a lower price than their purchase price, if members no longer wish
to have them. This option is only available to members that have not paid off their purchase
price.
This would be a good add-on because many guests are unsure about their financial stable
in the future. If they knew that they would be able to sell their points back if they are unable to
continue paying for them, they might feel more secure in their purchase. The members would be
given the information about this program while they are considering their purchase. With this
added security, members might be willing to purchase more points or even add more one as they
see fit in the coming years as opposed to buying at the lowest level to start.
DVC does not have to buy-back from every member that wishes to resell their points. As
previously stated, members cannot sell back their points if they have finished paying off their
points. DVC can examine the history of each member and how they used their points and attempt
to predict how well those points could be used in the future by other members. If DVC does not
feel like it would be a sound investment to repurchase the points, then the member is free to
search for another opportunity to sell their points.
While this is a sound addition to the timeshare idea, DVC may start to see a rush of
members wanting to sell their points back. This would in turn flood the market and make points
worth very little to other members. DVC will also see a lot more of their profits heading back out
the door when they have to buy-back from a member. However, if DVC is lucky, their buying
back of points will coincide with guests or members who are willing to purchase these points. If
this occurs, then DVC has the potential to make even more money on the points than they would
have if the first owners had kept them.
Recommendation and Expected Results
The recommendation with the highest potential is the Purchase Back Program. This
program has the biggest chance to make DVC more profitably and to make their members the
happiest.

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In the short run, DVC will have the potential to gain more revenue for the current fiscal
year (October 1st to September 30th). This additional revenue can be put to either buying back
even more points from members or it can be used to developing more DVC resorts which in turn
make their own revenue.
In the long run, DVC can start to predict which ‘home resorts’ are not as well liked. This
information is helpful in deciding which ‘home resorts’ need to be redesigned. DVC has already
noticed that many of their members are larger than the traditional four people. The Polynesian,
Boardwalk, Grand Floridian, and Aulani all have a murphy style bed in the rooms to
accommodate for a fifth family member. These members no longer have to request a roll-away
bed for this family member.
Repurchased points can be sold to new members for the current price per point. Current
points are being repurchased for $75 to 90 per point from members (Cotton, 2015). If Disney
were to purchase these points and turn around and sell them for the current rate of $165 per
point, DVC stands to make a profit of anywhere from $75 to 90 per point (Membership, 2015).
With every repurchase, DVC runs the risk of those points not being resold. DVC does not want
to have unsold product in their inventory. They lose money not only on the points themselves but
there is a chance of fewer guests staying at that particular resort. Before each repurchase, DVC
should fully examine the potential of those points.
Overall, DVC has a very high chance of making a substantial profit on buying back
points directly from its members. That is why this is the best possible recommendation for the
Disney Vacation Club.

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