The Walt Disney Company and Pixar Inc. Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

The Walt Disney Company and Pixar Inc. Case Solution

Problem Statement

Walt Disney was facing a downfall in generating enough revenues from its film production. The company has facing problem in making a choice as to whether acquire Pixar Inc. or not or have a strategic alliance with the Pixar Inc.

Analysis

In order to obtain a better understanding for the Disney to make a decision on acquisition of Pixar Inc, the internal and external analysis of both the companies were done to get a better picture of the acquisition process. The risks associated and synergies gained from the acquisition were also analyzed.

Walt Disney Analysis

The internal analysis includes the culture and core capabilities of Disney. Disney has a large number of employees of more than a 100,000. The company has a wide range of partnerships and distribution channels, which are core capability of the company. The company has huge revenues and capital to invest in new projects and acquisitions for the business expansion and diversification. However, the culture of the company is known for its remote upper management as the big bureaucracy, which is assumed as the low morale and restricts creativity and innovations.

A brief porter's five forces analysis was done in order to get an external analysis of the company. The Bargaining power of the Buyers is assumed as moderate since buyers are mostly the retailers and theaters; they have the power to make the decision on which film to display on their theater shows. The bargaining power of suppliers is very low, as the suppliers are mostly filmmakers or creators who need enough money to market and distribute the film, this discloses that they need support from big companies like Disney to market and distribute their movies.

There are high entry barriers for the newcomers to enter the industry, as few big fishes dominate the industry. New companies need high capital investment in order to match the existing players, which shows that the threat of new entrants is low. The substitute for the film distribution industry is the television, online entertainment, and theater shows that are increasing day by day. However, this still needs much time to reach the attractiveness of movies. People are willing to go out and pay more to the movies that make the threat of substitutes low. The rivalry in the industry is high, as there is fierce competition present in the market. The big film distributing companies collaborate with big studios and best filmmakers in order to gain the market share.

Pixar Inc. Analysis

The core capabilities of Pixar are its technology and supportive culture for creative ideas. The company has great 3D technology with which it pioneers in the computer animations. The company has top most software and programs attached to its name, with high skilled technical staff. The company has its essential center on the quality rather than revenue generation. The culture of Pixar is bottom up, which is assumed as a highly collaborative culture that encourages the creativity and innovations at all levels.

The Animation Filmmaker industry is presumed as the industry for the Pixar Inc. The Company has buyers who are film distributors like Disney. The distributors have some choices on the movies, which they want to distribute, that reflect the bargaining power of buyers as high. The suppliers for the industry are technology supplier and artistic talents. Many options are present to filmmakers in order to choose talent. The decision on the best talent is very low, which makes the bargaining power of suppliers, moderate.......................

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The Walt Disney Company and Pixar Inc. Harvard Case Solution & Analysis