Case Study: Disney And Pixar

Disney used the character of Mickey Mouse and others to create movies that customers enjoyed like “Beauty and the Beast” while Pixar was producing made up animated characters to create films like “Cars” and “Wall-E”. Disney was creating animated movies but struggling to generate the amount of money Pixar was making on producing only one movie a year. Disney wanted to grow in creating more animated movies and decided to buy out Pixar in 2006 for $7.4 million dollars. (Barnes, 2008) According to Disney’s CEO Robert

Buying energetic, young and creative Pixar, Disney intends to regain lost ground. But, they must do that in a smart way, to satisfy the needs of the Pixar owners, shareholders and employees. Back to the ownership test, the Disney ownership of Pixar will produce a greater competitive advantage for them. They will lose a powerful competitor, and will produce something

The second factor is the economies of scale. The success of the acquisition regarding the economies of scale is questionable as the companies did not seem to work together (Zahed, 2012). Disney started developing their own computer animations, while Pixar got a lot of revenue from their six animated motion pictures. Pixar has the technology plus the creativity, and Disney has good stories plus the

According to Robert Iger, CEO of The Walt Disney Company, Disney’s corporate strategy for diversification is a combination of three objectives that are to be achieved through the fundamental alignment of the Company’s core business units. The three objectives to be achieved by The Walt Disney Company are (1) creating high-quality family content, (2) exploiting technological innovations to make entertainment experiences more memorable, and (3) expanding internationally. The Walt Disney Company’s three objectives that make up the Company’s corporate strategy are to be achieved through each of the Company’s core business units that are split up in to five divisions (1) media networks, (2) parks and resorts, (3) studio entertainment, (4) consumer product, and (5) interactive media.

While developing characters and captivating story lines, as expected Disney and Pixar both address parts the life cycle such as death due to its everyday occurrence. Merriam Webster’s Online Dictionary defines death as the permanent end of something that is no longer alive : the ruin or destruction of something. The life cycle is defined by dictionary.com as a series of stages, as childhood and middle age, that characterize the course of existence of an individual, group, or culture. As evident within this definition the life cycle contains many parts which include birth, growth from childhood to old age, and then death. The life cycle is the driving force of life but is often misunderstood much like its smaller part, death. The human race

The Walt Disney Company is an outstanding renowned entertainment and media corporation with business ventures in Media Networks, Parks and Resorts, The Walt Disney Studios, Disney Consumer Products, and Disney Interactive. Walt Disney Company is a diversified corporation with products all around the world. (The Walt Disney Company, n.d.)

In addition, by having access to the Pixar brand and its characters, they would help to supplement Disney’s existing characters across its different businesses like theme parks, merchandise, and television, which provide more sales opportunities. Despite the dilution of Disney’s earnings per share, it is for the short-term. The acquisition fills a crucial strategic gap for Disney and can create long-term value for its shareholders. As such, Pixar is a “near perfect strategic fit” for Disney and hence should be acquired by Disney to remain competitive.

As a subsidiary company of Disney, one of the biggest companies in the entertainment industry, Pixar has strong financial support. Disney provides the production cost of the films, and it handles marketing and films promotions as well as distributions. Each of Pixar’s films made between $300 million and $1 billion at the box office, and two of them have exceeded $1 billion in income (Lynch, 2016).

3) Coordination among businesses: Disney set implemented transfer pricing between divisions so that they could share company resources, measure cash flows between their business units, optimizing resource allocation and improved interdepartmental coordination. This helped to create value by driving synergies and creating business for different Disney businesses. To improve coordination within the company, Eisner also introduced a company-wide marketing calendar that planned promotional activities, and a monthly meeting of 20 divisional marketing executives. This kind of cross-department event gave further motivation to create synergies and bolster creativity.

The financial ratio analysis of a company is a useful indicator to measure the success of a company. By comparing financial ratios between companies in the same industry (competitors) it is a useful way for investors and shareholders to determine the financial health and/or the sustainability of a company. Disney’s main competitors within the industry include Time Warner and 21st Century Fox. There are five key areas of comparison that provide excellent financial analysis of a company. They are short-term solvency, long-term solvency, asset management, profitability, and market value.

In 1939, the Valley Progress newspaper (History, p. 3) announced that San Fernando Valley in southern California would become the home of a million dollar, 51-acre lot called Walt Disney Studios. The then-current residence of Disney was established in 1925 in Los Angeles, and consisted of a single large room of 25 artists. Walt Disney (and his

In 2111, Prof. Sethi and colleagues disclosed that Mattel Inc. had played a part in, what many would consider, unacceptable business practices (p. 483). Although Mattel took actions to investigate the level to which practices were truly occurring, they had also promised to remediate all noted unacceptable practices. One of the unacceptable business practices that was uncovered was the mandating of certain employee groups required to live in company dormitories and were not permitted to utilize any other options for housing. Was this practice a form of discrimination? In order to decide if the business practice and any alternatives are fair and ethical for all, resulting in the greatest amount of good for the greatest number of people, the scenario will be run through the EthicsOps.com’s Utility Test.

Founded on February 3, 1986, Pixar was best known for its animated films created with Photo Realistic Rendermen. It initially began as a graphics group under Lucasfilm’s Computer Division. However, it was later purchased by Steve Jobs for $10 million dollars and renamed to Pixar. It continued to grow its success with the release of many movies, including their Toy Story series, one of their highest

In 1984, Disney’s stock price had been flat for a decade. Earnings per share were only $0.06. Disney had profits that year of $242 million. By this point in time Disney had become primarily a theme park company. Seventy seven percent of its profits came from theme park operations that year. Twenty two percent of profits came from consumer products (licensing Mickey Mouse, Donald Duck, etc.). Only one percent of profits came from filmed entertainment in 1984. Indeed, Disney had become a different company from what Walt Disney and his brother Roy O. Disney left behind. In 1971 when Roy O. Disney died (he became CEO when Walt died in 1966), 50% of the company’s profits came from filmed

Disney has moved well beyond its cartoon-oriented roots. Though the company is still involved the production of original feature films and other related media (and though the media network division of the Company is still the organization’s leading generator of revenue) the company has long since stopped being your typical “animation studio” or “film production company.”