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Lauren Patterson October 7, 2013 Strategic Management 5301 Walt Disney-Pixar Analysis The Walt Disney-Pixar merger carries a number of convincing advantages for Disney, but Pixar shareholders should be less enthusiastic about such a deal. Pixar’s resources and capabilities have set a standard that is extremely difficult to imitate. Through its highly talented employee pool, culture of creativity and collaboration, and proprietary 3D computer animation software, Pixar has created a competitive advantage in the animation film industry that yielded average total box office sales of $538 million with just six movies. Pixar shareholders should be wary of the potential breakdown of these resources and capabilities, which in essence are…show more content…
With no employee contracts, Pixar retained its employees year after year. Employees would be assigned to work on research and development projects if there was no work needed on a film. At Disney, Michael Eisner and Jeffrey Katzenberg controlled the decisions and oversaw the entire production process and would hire and fire employees based on project demand. The intangible brand loyalty Pixar’s employees possessed was huge as it meant the firm did not run the risk of losing its talent – the creative and technical masterminds behind the box office hits. As with the strong cross-functional relationships, this brand loyalty is extremely difficult to imitate and both are social complexities that offer a competitive advantage to the firm. Another unique advantage Pixar has over other studios is its three proprietary (patented) technologies: RenderMan, Marionette, and Ringmaster. RenderMan enhanced texture and color to 3D computer generated models, which in itself were revolutionary compared to the traditional 2D animation. These software programs gave Pixar the capability to easily change a scene or a character all through mathematical models. This capability proved to be a huge time saver and subsequently a cost advantage over other studios that used 2D animation, which was very time intensive and needed a large staff of drawers. As an example, Pixar produced Toy Story in 1995 with only 110 staff

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