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Disney's Perspective: Advantages Disadvantages

The document analyzes the alternatives of acquiring or forming a strategic alliance between Disney and Pixar from both companies' perspectives. Acquiring Pixar would provide synergies between their CG production and marketing abilities but also risks cultural differences. An alliance would be less risky but also less profitable for Disney and may not give Pixar satisfactory terms. From Pixar's view, acquisition could leverage Disney's assets but impact culture, while an alliance preserves autonomy but risks less focus from Jobs due to his Apple role.

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Muskan Valbani
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202 views1 page

Disney's Perspective: Advantages Disadvantages

The document analyzes the alternatives of acquiring or forming a strategic alliance between Disney and Pixar from both companies' perspectives. Acquiring Pixar would provide synergies between their CG production and marketing abilities but also risks cultural differences. An alliance would be less risky but also less profitable for Disney and may not give Pixar satisfactory terms. From Pixar's view, acquisition could leverage Disney's assets but impact culture, while an alliance preserves autonomy but risks less focus from Jobs due to his Apple role.

Uploaded by

Muskan Valbani
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Ally or Acquire

Disney’s
The Need Perspective
Alternative Advantages Disadvantages
Acquisition of Pixar -Sequential synergy between companies (Pixar’s CG production -Cultural differences in the two companies (such as the impact of Steve Job’s
and Disney’s marketing) personality of the Disney boardroom)
-No problems regarding revenue sharing, rights management etc. -Impact of Pixar’s P/E ratio diluting Disney’s healthy P/E ratio
-Establishment of Disney in the CG market without having to spend
time or money on establishment of CG technology
-Positive industry associations (most notably Apple)
-Weakening of competitors eager to collaborate with Pixar

Strategic Alliance with -A less risky proposition with risk divided between Pixar and -Pixar’s terms of renegotiation would cause Disney to lose out on revenue it was
Disney entitled to in the previous deal
Pixar -Cheaper than an acquisition -Pixar was adamant for a new revenue-sharing agreement to get more than the 40%
-Familiarity of operations within Pixar would help Disney of the movie revenue it was getting
-Pixar would be free to pursue projects with other studios
-Disney wouldn’t have satisfactory in-house CG expertise

Pixar’s Perspective
Alternative Advantages Disadvantages
Allowing Acquisition -Access to Disney’s IP and creative muscle would allow more -Uncertainty about the impact of the acquisition on culture
and better movies to be made -Lack of creative freedom
-Disney’s marketing and merchandising would ensure greater
returns
-Would allow Jobs to remain part of Pixar without the
pressure and time constraints of being CEO of two major
companies at once
Alliance -Preservation of company culture -Possible dearth of tome given to Pixar by Steve Jobs due to
-Creative freedom commitment to Apple
-Option to work with other studios if need/situation arises -Lower barrier of entry into CG technology would mean more
competition increasing risk

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