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 market share and competitor overview of the Animation, production and CG industry . In the next two sections, the detailed analysis of the companies Disney and Pixar are considered with respect to the acquisition regarding the view of each firm respectively. The fourth section explains complementary and counter-arguments and an analysis of a strategic merger and acquisition proposal for each company respectively. The final section: conclusion, interpretations, assumptions and suggestion showcase the final thoughts interpreted through the strategic merger and acquisition analysis.
Animation market analysis and prominence:
With the evident box-office hits of animation and 3D-Computer graphic films namely Toy story, Finding Nemo, there was a sudden competitive rise in the CG industry as a whole, production companies fought internal battles in-order to dominant the market. Pixar was one of the top contenders in this competitive market, followed by DreamWorks. Disney had a few box-office hits in 2D animation during this period of 2D animations: like snow white, 1934; but, was struggling to keep up with the technological computer rendering production studios, this is where the conflict arises and raised the argument: whether Disney should acquire Pixar or not. With the event of having a limited 5-film partnership, is it in Disney’s best interest to acquire Pixar? Will Pixar’s freedom and unchained creativity fit and be complementary to Disney’s governance or will be do more harm than good? This is the present dilemma in this case-study: Also, whether Disney has to acquire Pixar in-order to achieve competitive market advantage?
Assumptions and recommendations on Disney, Pixar Merger and Acquisition
- Merge the production entity of pixar and Disney into in single unit where the creation and animation responsibility mainly lies within Pixar and with minor-major contributions to story-
board is given by Disney to ensure cooperative competitive advantage over rivals like
- No change of positions of direct leadership in pixar, jobs and lasseter should withhold maximum
capacity of leadership and decision while considering mutual discussion and co-operative strategic planning with the leaders and board of Disney in regard to film quality production.
- Non-change of pixar’s three governing principles which has laid the foundation and fostered its
success: “everyone must have freedom to communicate with anyone”, “it must be safe for
everyone to offer ideas”, and “stay close to innovations happening the academic community”
- In regard to the financial prospects, considering a market cap evaluation of $7.1 billion along with company stock inclusively based is a better option to reduce dilution of P/E of Disney.