Marketing Assignment Help Essay Writing Analysis Topic:

Description of Pixar Disney growth and new management team

Marketing Report study writing analysis overview:

1. Pixar is one of the leading digital animation studios that create animated feature films and it was founded in the year 1986 in Emeryville. The featured films were Toy Story, A bug’s life, Monsters etc. The Walt Disney was one of the largest conglomerates in the world which was founded in the year 1923.

The relationship of Disney and Pixar began in the year 1986 and Disney owned the production system to make the two-dimensional animated movies. They would operate independently of one another because Disney agreed to fund the movie budget but neither company disclosed the fund amount. Pixar was developing short and commercial films whereas Walt Disney was producing animated movies. They were dealing with 3D technology and Disney believed in 2D technology. The culture of Pixar was bottom – up approach and on the other hand, the Disney culture was based on top-down approach. There requires huge operating cost in Disney whereas Pixar do not require large number of staffs. The film “Toy Story” was made with the help of only 110 staff but Disney takes high amount of time to direct the movies. The alternatives for the above are as follows:-

There could be internal development which could acquire the assets of both the human as well as the technology. Internally the company known as Pixar should develop the competition in terms of cost and time and Disney should focus on developing 3D technology internally. There could be strategic alliance with other studios and the company “Disney” should build relationship. Pixar should increase its power and acquiring Pixar will make the sense for the Disney’s growth because the market will support the full potential and future growth of the company, they would be able to attract more number of customers together and also they would be able to expand the new segments of the customer. Thus more number of customers will get attracted to the companies. They have a long history together and this can improve the profits of the company. The distribution network will also increase and Disney and Pixar together can focus on more innovative and creative stories, films and characters to attract and to delight millions and billions of customer’s whole around the world. They could maintain good relationship with each other rather than they operated independently of one another or were allowed to form relationships with other companies because it is full of promise and they can bring the leading convergence in the world. They can build the in-house talent and can earn the high amount of revenues. This relationship will lead them to high growth. This will increase high values for the business and the relationship can help them to grow with high revenues and high amount of success by the help of best technology, featured and animated films.

They both can retain and can expand the networks successfully through the whole world which is the biggest challenge for both the companies. Innovation and competition will be lead easily through these companies.

Thus, Disney is greater in maintaining the exclusive relationship as they acquired 100% share of Pixar. (Fried & Borland, 2006)

2. The source of knowledge, technology and resources are the focus of acquisition. Yes, the value of exclusive relationship will be realized through common ownership. This ownership is important for the business and this also helps in negotiate a new partnership. Disney would provide 50% ownership and Disney had to sign a new contract. This agreement involves at least two different companies and thus they gain new competencies for success. Contract is not easy to maintain but the companies have different styles of management, culture, organization and decision making etc. New core competencies will be gained by the companies to lead through success and it is not easy to manage or maintain thus, the owner should be responsible for solving any type of problems and integrate the two different cultures successfully. (Bbc.co.uk, 2006)

The culture of Pixar is based on creativity and innovation. In Pixar, employees were treated generously when compared to Disney. Disney should try to maintain its employees after acquisition and employees should be given proper care by the company. They need to be satisfied and there should be continuous growth and development in the organization. New culture should be created in the organization and it should be based on both the firms that are Pixar as well as Disney. Common styles of management and vision of the organization also needs to be developed by the company.

New management team will be helpful for the growth and success of the company. Shared goals and objectives will be the famous motive for the company and formation of new management team will be required by the organization. To provide clear picture in the mind of the employees, to create the vision and objectives of the organization and to provide leadership to the organization is really challenging for the owner of the company after the acquisition. Adoption of these new techniques, vision and objectives, clear picture of goals and leadership is important and at the same time, is really challenging for the owner of the company. (Grover, 2006)

3. The main arguments for and against in each case is discussed below:-

Investment banks helped the company to create the deal and Disney agreed to convert the shares of Pixar into 2.3 % and 279 million shares were issued by Disney to do the transaction properly. The price of the stock of Disney was 7.4$ billion at the time of announcement of merger. The exact and the accurate price of the stock of Pixar was average market price. Pixar was founded by Steve Jobs he was the major stakeholders with more than 50% of shares. About 17 times of earning, Disney’s trading was taking place.  As a board of member of Disney, the given option of $ 7 billion for Pixar in terms of approval first the company focus on the current position of the Pixar that is current market share through the revenue generate by the Pixar. As per case study total revenue of Pixar is $ 247 million. Pixar is the leader in the blockbuster movies on the other hand Disney was looking to increase sales and profit. Disney paid $ 59.78 per share to Pixar for the stock of Disney. The exact price of Pixar stock was based on average market price. (Holsan, 2006)

Thus as a board member of Disney, a bid of more than $7 billion for Pixar has been approved because this deal is fairly complex and it includes the Disney board of directors. This will make the stock of the Disney; the Disney has become the largest holder in the world. This was the confirmation from the Disney’s end with regards to Pixar. On the other hand, as a board member of Pixar, Pixar should accept a bid of more than $7 billion from Disney because the distribution channel is higher of Disney. The profit and revenues of Disney is more than Pixar which shows the strong presence of Disney in the market.

The revenue income is about 319 of Disney and on the other hand, the company Pixar’s volume is merely 200. The manpower is very less of the Disney which affects the operation of the company. They have low staff and employees. Disney is strong competitor of Pixar which affect the overall market of Pixar so; the company will accept the offer.

To conclude, the above discussion provide sufficient information about the major arguments for or against in each case.

According to the source of Thompson one banker, the bid option more than 7$ billion for Pixar can be approved if circumstances and future affect the overall market share and revenue will increase of the Disney. The good will, revenue, market share and Pixar had 1.1$ billion cash that pertain that the deal was effective and profitable for Disney within the same industry for better growth and success.

On the other hand, as a board member of Pixar, Pixar should accept a bid of more than $7 billion from Disney because the distribution channel is higher of Disney. The profit and revenues of Disney is more than Pixar which shows the strong presence of Disney in the market.

The other area where Disney is running their business successfully is strong distribution channel and expansion networks.

Disney pays more premiums to the target group of companies and shareholders when they merged with ABC and Marvel.

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