The walt disney company and pixar, inc to acquire or not. Disney case pixar mergers and acquisitions free 30day. Disney s press release said, this acquisition combines pixar s preeminent creative and technological resources with disney s unparalleled portfolio of worldclass family entertainment, characters, theme parks and other franchises, resulting in vast potential for new landmark creative output and technological innovation that can fuel future growth across disney s businesses. The walt disney company and pixar inc to acquire or. Pixars ranks include a number of disney alumni, including the creative duo credited with many of its hits, john lasseter, and sarah mcarthur, vice president of production, who joined pixar in 1997 after a stint at disney that included. Disney case free download as powerpoint presentation. Pixars key products include pixar image computer, renderman, ringmaster and marionette. Pixar demanded a larger stake in profits and 100 % ownership of the films.
To write an emphatic case study analysis and provide pragmatic and actionable solutions, you must have a strong grasps of the facts and the central problem of the hbr case study. However, disney and pixar had concerns about the merger. According to the agreement, pixar shareholders would receive 2. Agreement and plan of merger this agreement dated as of january 24, 2006, by and among the walt disney company, a delaware corporation parent, lux acquisition corp. Disney was also concerned about pixars approach to creative development, as it didnt align with its traditional perspective on character development. Because animation is integral to disneys corporate strategy, whose characters from animated films drive retail in its theme parks.
The walt disney company and pixar inc to acquire or not to. Porters five forces we think that value requires common ownership. Firms disney walt the disney pixar merger benefited disney in several ways. Questions what are the strong capabilities pixar has. The disney pixar merger throughout the years of disney pixar, there were problems here and there just like any company has. Pixar initially began in 1979 as the graphics group, as a piece of the computer division of lucasfilm. The walt disney company and pixar inc to acquire or not to acquire an update case study solution, the walt disney company and pixar inc to acquire or not to acquire an update case study analysis, subjects covered strategy by juan alcacer, david j. Disney and pixar originally announced the merger on january 24, 2006. Order instructions read the case study and answer the following short essay questions. Step 2 reading the the walt disney company and pixar, inc to acquire or not to acquire. Walt disney studio reasons for merging to acquire technology, to complement or replace the currently used one the decrease in competition is another motive for disney disney can also increase its revenue by merging with pixar. Beginning their relationship, disney and pixar made an agreement that stated they would produce and distribute one computer.
The case focuses on john lasseter, who currently is the creative head of disney animation studios and pixar animation studios, both of which are owned by the walt disney company. Pixar s resources and capabilities have set a standard that is extremely difficult to imitate. The walt disney company and pixar inc to acquire or not to acquire. Case study solution, case the walt disney and pixar inc. Under the agreement, disney had the control of marketing and licensing of the movies, while pixar was to be paid a share of the profits towards the development costs. This case study analyses and differentiates the merger and.
The case study outlines a brief history of the animation industry as well as the evolution of the computer animation. Melanio santella professor, organizational behavior graduate school of business, far eastern university in partial fulfilment of the requirements of organizational behavior mba 203 summer, 20092010 submitted by. Disney had an equity stake in pixar, which came with a contract to produce three films. Introduction pixar animation studios is the worlds famous computer animation film studio based in california was founded in 1986 by ed catmull, alvy ray smith and steve jobs, the cofounder of apple inc.
On august 31, 2009, the walt disney company disney and marvel entertainment, inc. Vertical integration an organization expands its business in two ways that is to acquire their supplierdistributor and acquirethe same product. After pixars 2006 merger with the walt disney company, its ceo, bob iger, asked me, chief creative officer john lasseter, and other pixar senior managers to help him revive disney animation. In january 2006, disney announced they were buying out pixar. For example, disney has been very successful previously with creating movie sequels. Jun 12, 2019 horizontal integration is the merger of two or more companies that occupy similar levels in the production supply chain. Disney and pixar post merger strucutre and culture. Beginning their relationship, disney and pixar made an agreement. Disney and pixar 2006, and sirius and xm radio 2007.
After four years, they released their first movie, toy story, that turned out to be a hit. This case pixardisney, parting ways focus on pixar animation studios pixar joined hands to produce three fulllength animated movies. However, analysts said that the real value to disney was the talent the deal would bring inhouse, especially pixar executive vicepresident john lasseter, the man credited as being the creative driving force at the firm. In this, disney and warner brothers provide an instructive study in contrasts. In addition, disney collected 10 to 15 percent of each films revenue as a distribution fee. Its the owner of 11 theme parks and several television networks, includingthe american. Harvard strategic managementnaga rakesh chinta article pdf available june 2018 with 649 reads. The research utilizes a case study approach to evaluate mergers spanning different industries. Disneypixar merger a case study analysis free download as word doc. Strategic management 5301 walt disneypixar analysis the walt disneypixar merger carries a number of convincing advantages for disney, but pixar shareholders should be less enthusiastic about such a deal.
Disney however wanted to stay with the original agreement since it was more favorable to the company. The prospectusproxy statement and other documents which will be filed by disney and pixar with the securities and exchange commission will be available free of charge at the secs website. For disney it was a adding muscle to its existing animation strength with a stronger partner. However, this partnership later faced problems and pixar started looking out for other partners in. Horizontal integration is the merger of two or more companies that occupy similar levels in the production supply chain. John lasseter case study my online homework helper. The article traces the very powerful disneypixar merger and analyses the various reasons for its.
However, both of the companies disney and pixar endured an enourmous change which led to the creation of some of the alltime best animated movies. 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. Assumptions and recommendations on disney, pixar merger and acquisition case study summary. Acquisition of pixar by disney mergers and acquisitions. The walt disney company and pixar, inc to acquire or not to acquire. Harvard business school teaching note 711451, november 2010. Pixar and dreamworks were two of the biggest and most successful animation studios in the industry. Firms disney walt the disneypixar merger benefited disney in several ways.
Horizontal integration definition and notable examples. Throughout the years of disney pixar, there were problems here and there just like any company has. The walt disney company and pixar, inc to acquire or not to. Based on the historical partnership between disney and pixar, and the analysis of pros and cons of alternatives, a merger of the two companies is the best course of action. First, the merger also reduced the competition that disney was facing in the market kuijper p. Its the owner of 11 theme parks and several television networks, includingthe american broadcasting company abc. Winwin deal the strength of pixar animation was supported by the money of disney and made it a force to reckon with and successful. Sep 20, 2009 on august 31, 2009, the walt disney company disney and marvel entertainment, inc. This case study analyses and differentiates the merger and acquisition strategy for the companies of disney and pixar, in the. Pixar and walt disney merger new york mickey mouse and nemo are now corporate cousins.
However, they may be in the same or different industries. Historical backgroundthe walt disney company was founded on october 16th 1923 by brotherswalt and roy disney. The two companies have a very different culture and this may hinder the post merger integration. Disney and pixar merger the strategy that led to the merger of disney and pixar was a simply business deal with two companies that has been working with each other for years. Marvel entered into a merger agreement in which disney would acquire marvel. In terms of business, disney is a distributor of films, while pixar is a production studio. Harvard case study solution and hbr and hbs case analysis. Disney case pixar mergers and acquisitions free 30. A case study of disney and pixar animation studios in 1991, disney and pixar animation studios began a corporate relationship that would lead both companies to great success in years to follow.
Case sample disney pixar mergers and acquisitions pixar. Among the most significant results of vertical integration is the elimination of the excessive emerging transaction costs. For disney, adding an executive like steve jobs to its board could result in personality conflicts and hinder productivity. Users can purchase an ebook on diskette or cd, but the most popular. The acquisition of pixar by the walt disney company. Download as ppt, pdf, txt or read online from scribd. That is to say, pixar makes movies, and disney markets and distributes them. Case sample disney pixar free download as pdf file.
Acquiring pixar makes the most sense for disneys growth. Prior to the merger in 1997, after the release of toy story, a 10year, 5picture deal was signed, evenly splitting production costs and profits on subsequent movies. Disney and pixar merger and acquisitions by gladys. Jan 24, 2006 the prospectusproxy statement and other documents which will be filed by disney and pixar with the securities and exchange commission will be available free of charge at the secs website. Pdf disney, pixar merger strategic and competitive analysis.
Pixar executive summary the aim of this report is to. The story began with the pixar deal that disney would be distributing toy story. Pixars final offer to disney was that disney would own distribution rights for five years, after which the rights will return to pixar. For disney, are there any other alternative like strategic alliance better than acquiring pixar. Lastly, mergers and acquisitions that were dependent on gains form. Following the merger, many disney computeranimated movies e. The first case study evaluates the merger between exxon and mobil in 1999 xom, the second evaluates the merger between america online aol and time warner twx, the third evaluates the transaction of disney dis acquiring pixar, and the fourth evaluates the merger between sirius siri and xm radio.
Pixar was a relatively smaller organization with an open culture. May 05, 2012 disney and pixar originally announced the merger on january 24, 2006. Assignment the disney name has both enjoyed periods of immense success and widespread acclaim and has endured stretches of quality decline, reputation tarnishing and management shakeup. The walt disney company and pixar inc to acquire or not.
Apr 22, 2010 in january 2006, disney announced they were buying out pixar. Firstly, there will be powerhouse establishment when disney and pixar combined. The disneypixar merger is consistent with disney choosing pixar because it is similar enough to permit new product synergies, phillips told insead knowledge. Pdf assumptions and recommendations on disney, pixar. Disney and pixar were already under an agreement to produce six animation movies. In this paper, i look at the business strategy of amazon. As such, pixar is a near perfect strategic fit for disney and hence should be acquired by disney to remain competitive. What are the risky factors when disney tries to acquire pixar. Disneypixar merger a case study analysis international. Disneys acquisition of pixarbusiness strategycase study.
Disney and pixar merger and acquisitions by gladys claire. When toy story blew up with a third of a billion dollars, things immediately changed for steve jobs and the pixar team. Disneypixar merger problem and solution disney pixar. It is one of the largest media and entertainment corporations in the world. The question for moviegoers is whether pixar will keep cranking out hits should it be swallowed by disney. Hence going ahead with the acquisition would be highly dilutive for disney. Pixar, cofounded by steve jobs, left, and disney, run by robert a. Hence acquisition of pixar would help disney to reduce the competition it faced. Special attention is given to five parts, including a historical overview, organizational structure, business operations. Lastly, disney has a large fan base and enjoys strong brand loyalty and.
Disney and pixar could also share costs of producing the movies and also the benefits from the movies. It has produced thirteen animation films, which are among the 50 highest grossing animated. One alternative for pixar was to vertically integrate forward and enable distribution of its own content instead of relying on disney by acquiring smaller. Companies mergers and acquisition in example of walt disney. York mickey mouse and nemo are now corporate cousins.