Swot analysis pixar

See discussions, stats, and author profiles for this publication at: https://www.researchgate.net/publication/325746826

Disney , Pixar Merger Strategic and Competitive Analysis: Naga Rakesh Chinta,

Harvard Strategic Management

Article · June 2018

CITATIONS

0 READS

2,805

1 author:

Some of the authors of this publication are also working on these related projects:

SWOT Analysis of Amazon View project

Disney, Pixar Strategic, Competitive Analysis View project

Naga Rakesh Chinta

University of Michigan

17 PUBLICATIONS 0 CITATIONS

SEE PROFILE

All content following this page was uploaded by Naga Rakesh Chinta on 13 June 2018.

The user has requested enhancement of the downloaded file.

https://www.researchgate.net/publication/325746826_Disney_Pixar_Merger_Strategic_and_Competitive_Analysis_Naga_Rakesh_Chinta_Harvard_Strategic_Management?enrichId=rgreq-7338b1baf78436f4ecc8326b7177d694-XXX&enrichSource=Y292ZXJQYWdlOzMyNTc0NjgyNjtBUzo2MzcxODU3ODcxOTEyOTZAMTUyODkyODMzODQxMQ%3D%3D&el=1_x_2&_esc=publicationCoverPdf

https://www.researchgate.net/publication/325746826_Disney_Pixar_Merger_Strategic_and_Competitive_Analysis_Naga_Rakesh_Chinta_Harvard_Strategic_Management?enrichId=rgreq-7338b1baf78436f4ecc8326b7177d694-XXX&enrichSource=Y292ZXJQYWdlOzMyNTc0NjgyNjtBUzo2MzcxODU3ODcxOTEyOTZAMTUyODkyODMzODQxMQ%3D%3D&el=1_x_3&_esc=publicationCoverPdf

https://www.researchgate.net/project/SWOT-Analysis-of-Amazon?enrichId=rgreq-7338b1baf78436f4ecc8326b7177d694-XXX&enrichSource=Y292ZXJQYWdlOzMyNTc0NjgyNjtBUzo2MzcxODU3ODcxOTEyOTZAMTUyODkyODMzODQxMQ%3D%3D&el=1_x_9&_esc=publicationCoverPdf

https://www.researchgate.net/project/Disney-Pixar-Strategic-Competitive-Analysis?enrichId=rgreq-7338b1baf78436f4ecc8326b7177d694-XXX&enrichSource=Y292ZXJQYWdlOzMyNTc0NjgyNjtBUzo2MzcxODU3ODcxOTEyOTZAMTUyODkyODMzODQxMQ%3D%3D&el=1_x_9&_esc=publicationCoverPdf

https://www.researchgate.net/?enrichId=rgreq-7338b1baf78436f4ecc8326b7177d694-XXX&enrichSource=Y292ZXJQYWdlOzMyNTc0NjgyNjtBUzo2MzcxODU3ODcxOTEyOTZAMTUyODkyODMzODQxMQ%3D%3D&el=1_x_1&_esc=publicationCoverPdf

https://www.researchgate.net/profile/Naga_Chinta?enrichId=rgreq-7338b1baf78436f4ecc8326b7177d694-XXX&enrichSource=Y292ZXJQYWdlOzMyNTc0NjgyNjtBUzo2MzcxODU3ODcxOTEyOTZAMTUyODkyODMzODQxMQ%3D%3D&el=1_x_4&_esc=publicationCoverPdf

https://www.researchgate.net/profile/Naga_Chinta?enrichId=rgreq-7338b1baf78436f4ecc8326b7177d694-XXX&enrichSource=Y292ZXJQYWdlOzMyNTc0NjgyNjtBUzo2MzcxODU3ODcxOTEyOTZAMTUyODkyODMzODQxMQ%3D%3D&el=1_x_5&_esc=publicationCoverPdf

https://www.researchgate.net/institution/University_of_Michigan?enrichId=rgreq-7338b1baf78436f4ecc8326b7177d694-XXX&enrichSource=Y292ZXJQYWdlOzMyNTc0NjgyNjtBUzo2MzcxODU3ODcxOTEyOTZAMTUyODkyODMzODQxMQ%3D%3D&el=1_x_6&_esc=publicationCoverPdf

https://www.researchgate.net/profile/Naga_Chinta?enrichId=rgreq-7338b1baf78436f4ecc8326b7177d694-XXX&enrichSource=Y292ZXJQYWdlOzMyNTc0NjgyNjtBUzo2MzcxODU3ODcxOTEyOTZAMTUyODkyODMzODQxMQ%3D%3D&el=1_x_7&_esc=publicationCoverPdf

https://www.researchgate.net/profile/Naga_Chinta?enrichId=rgreq-7338b1baf78436f4ecc8326b7177d694-XXX&enrichSource=Y292ZXJQYWdlOzMyNTc0NjgyNjtBUzo2MzcxODU3ODcxOTEyOTZAMTUyODkyODMzODQxMQ%3D%3D&el=1_x_10&_esc=publicationCoverPdf

Disney, Pixar Merger & Acquisition Detailed Strategic Case study Summary: Harvard Strategic Management

-Naga Rakesh Chinta Introduction:

This case study analyses and differentiates the merger and acquisition strategy for the companies of Disney and Pixar, In the first section, you will find the brief analysis of the market share and competitor overview of the Animation, production and CG industry . In the next two sections, the detailed analysis of the companies Disney and Pixar are considered with respect to the acquisition regarding the view of each firm respectively. The fourth section explains complementary and counter-arguments and an analysis of a strategic merger and acquisition proposal for each company respectively. The final section: conclusion, interpretations, assumptions and suggestion showcase the final thoughts interpreted through the strategic merger and acquisition analysis.

Animation market analysis and prominence:

With the evident box-office hits of animation and 3D-Computer graphic films namely Toy story, Finding Nemo, there was a sudden competitive rise in the CG industry as a whole, production companies fought internal battles in-order to dominant the market. Pixar was one of the top contenders in this competitive market, followed by DreamWorks. Disney had a few box-office hits in 2D animation during this period of 2D animations: like snow white, 1934; but, was struggling to keep up with the technological computer rendering production studios, this is where the conflict arises and raised the argument: whether Disney should acquire Pixar or not. With the event of having a limited 5-film partnership, is it in Disney’s best interest to acquire Pixar? Will Pixar’s freedom and unchained creativity fit and be complementary to Disney’s governance or will be do more harm than good? This is the present dilemma in this case-study: Also, whether Disney has to acquire Pixar in-order to achieve competitive market advantage?

Overview of Disney’s strategic background with the regard in the viewpoint of Pixar:

Disney, being mostly recognized as a brand recognition and a market leader in animated film productions due to its much reputed success in creating life-like memorable animated characters in film. Disney’s initial success lied in the brand character of “Mickey Mouse” created by founder: Walt Disney.The continued success in 2D animated movies vested in snow-white, 1934; the little mermaid; beauty and the beast; and the lion king, 1994 which alone has generated over $1 billion in net income for the company.Disney though being immensely successful during the 2D animation era, struggled with the technological advancement of the new 3D rendered compute animated film productions. In the struggling of Disney, companies such as pixar, dreamworks captured most of the market share in CG Film productions while diney lagged behind incrementally.

Disney spends a lot of its time in meetings, arguing, discussing and , having given remuneration to the employees based on idea contribution: it promoted its creative thinking in a motivated level .The governance of Disney after the release of the some of its most reputed films caused a more hierarchical approach to move and film productions which caused the loss of creative idea engagement and diminished the contributive attitude of its employees, while this was a minor cause of its decrementation; it had also failed to catch up with the rise of technology which competitor and future-to be partner Pixar as successfully embezzled. Most of its films after the lion king led to below-expected performance, but was

compensated with its entertainment revenue model, Disneyland, toys, home videos, etc. Disney’s board and Eisner also had failed to realize Katzenberg's suggestions in regard to the growing industry of CG films, which led Ketzenberg to leave and create a powerful rival-competitor studio: Dreamworks.

Disney was losing its capability to deliver engaging, modern and 3D CG films and cinema, hence has induced and proposed a deal with pixar for a 5-film co-operative contract: Disney had an idea to utilize its brand value, revenue models and history to partner with Pixar’s modern and creative production system to create excellent and adequate films to the industry.

Overview of Pixar’s strategic background:

Pixar is one of the few studios which has successfully broke into the animation market after snow white release in 1937, It was an achievement by itself to secure consecutive box office hits, its first five animation films grossed over $350 million each putting pixar into one of the market leaders in animation. Due to the several reasons discussed here, Disney was competitively compelled to acquire pixar. By 2005, Pixar has developed 100 films, 44 out of these won Oscars in visual effects with the credit going to Renderman, with led to a total of 20 academy awards with prestige.It also had commercial success with many of its short films and commercials winning Oscars such as Tin toy, Geri’s Game. Pixar had three proprietary technologies : RenderMan, Marionette, and Ringmaster. Pixar has been a powerful contender in the field of 3D animation productions in the film industry, one of the reasons for it’s effective advantage is due to it’s lead in technology which promotes inclusive creation of the 3D rendering which most of the market has no reach to for at least a few years.It was also claimed by Founder, Steve jobs: “We have 10 years of proprietary software systems that you cannot buy anything close to in the marketplace. You have to build them yourself.” Which adds to the fact that Pixar had technology in that field which surpasses Disney in a intuitive manner. Pixar was built with a foundation of Computer science, ex-disney employee George Lucas passionate for animation seeking betterment of the industry, joined Steve jobs in 1986 and created Pixar. Though during the initialization pixar struggled with funding and acquiring the technology to produce high CG films, they came to a stand as time passed.

Pixar’s self developed technology helped animators to manipulate thousands of motion control points within a single character, this allowed the resuage of animated images, which saved an enormous amount of time, human resources and reduced the competitive pressure from from the market. This allowed pixar to create some of the best grossing movies henceforth, namely Toy Story with a limited staff of 110 when compared to other Animation studio staff strengths of 500 plus employees working on a single film.This resulted to implement and characterize the saved time into focus of story development and fine tuning the visual details, henceforth Disney saw a competitive advantage in acquiring pixar. Strategic merger and acquisition interpretations and assumptions:

Pixer is a creative, open-end corporate environmental and extremely passionate with its animations and creations. Pixar operated on three principles, “everyone must have freedom to communicate with

anyone”, “it must be safe for everyone to offer ideas”, and “stay close to innovations happening the academic community”.Incoherently it was stated and remunerated during that time “Lasseter was the only difference between Disney and Pixar”.

Robert Iger and many agree that, Animation is an integral part to Disney’s corporate strategy because these animated characters complimented directly to the success of the theme parks and consumer product divisions in accessories, home video, toys, brand value, etc of Disney as a whole.Such an example is the evident popularity of Disneyland which was pushed through the saturation level due to the immense world-wide popularity of Mickey mouse and other animated characters of Disney. Pixar in the other hand had a proven track record for box-office hits especially in association with Disney. In nay contrasted view, the control the synergy made sense.Many concluded that Disney and Pixar was a perfect fit as they perfectly complemented each other in various ways, some even proclaimed that bring Jobs and lasseter in the field will bring henceforth be equivalent to bringing back Walt Disney himself.There was also an intriguing challenge point in the face of creativity and leadership, Steve jobs was back as a the CEO of apple, the question was whether will pixar suffer with the low focus on pixar on the behalf of steve jobs? What if both steve jobs and Lasseter left, Disney would be buying only technological resources.One of the most decisive reasons that pixar had been able to emerge as a leader in animation and productions was due to the seer leadership and visions of the founders Steve jobs and lesseter.In a counterargument, there is a possibility of Disney