Disney and Pixar - A Good Combination?

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Disney should acquire Pixar aiming to benefit from strategic advantages as well as the value that the latter could add to the brand. First, the timing chosen for such a serious step was perfect, as Disney's animation films were experiencing low demand rates. The decisionmakers expected to benefit to their business by raising the entry barriers while experiencing a decrease in competition and increase in market share owned by the company In terms of the potential value that Pixar could add, the deal is quite advantageous, as it offers new opportunities in a variety of segments. For instance, the human resources capital can be used by both companies, which can result in the creation of original products distinguishing both companies from their direct competitors on the market (Aylott, 2014). Moreover, Pixar employees get an opportunity to hold a number of trainings for their Disney colleagues to improve their expertise and introduce them to specific techniques used by the company (Alcacer, Collis & Furey, 2010). Joint efforts will later provide the organizational opportunities to launch more than one movie per year. In terms of the revenue that is possible to generate, the merger option is definitely better, as it increases the price per share.

Nevertheless, Disney and Pixar managers could initiate the creation of the other form of the alliance. For instance, the companies might focus on the acquisition of highly professional human capital and technology assets, development of 3D, and implementation of innovative technological tools. The disadvantages of the strategic alliance with Pixar might include the distribution channel factors, complications in building new business ties, and an obligation to confirm them with the partner. In other words, as opposed to merging, the strategic alliance ties both companies together and leaves them little space for external maneuvers (Barney & Hesterly, 2014). Merging, on the contrary, provides Disney with all the instruments of influence on Pixar and a possibility to make all the decisions disregarding a partnership agreement. A strategic alliance between these companies might result in the feature film agreements or co-production contracts, which might be less limiting in terms of business freedoms and grant less responsibility over the content produced by Pixar. M&A, however, eliminates the competition and provides access to the technologies and human capital while revitalizing an animation department of Disney (Barney & Hesterly, 2014). The risks or threats associated with the acquisition mostly refer to the finances, as the buying company lacks cash, thus managers apply some innovative financial instruments to make the deal.

The culture of Disney and Pixar might also be considered as risky factors since merging frequently results in failure, as a dominating company starts to cultivate its corporate culture within a newly acquired enterprise. Disney has long been known for a high level of bureaucracy and prolonged decision-making. Unfortunately, the profitability seems to run the company's culture. On the other hand, Pixar is more individual-oriented and less adheres to strict schedules (Alcacer, Collis, & Furey, 2010). Its culture is grounded on three cornerstones such as freedom to communicate, strong involvement of scientific community, and the application of innovations as well as safety to offer the ideas without a fear of being criticized or misunderstood. A better option is to leave corporate culture at Pixar unchanged since otherwise many employees might leave the company thereby decreasing its abilities to design creative content.

In conclusion, due to a number of benefits and Pixar’s potential to increase Disney’s value, the decision on the acquisition is the best option. Nevertheless, it is beneficial for Disney to leave Pixar’s original culture.


Alcacer, J., Collis, D., & Furey, M. (2010). The Walt Disney Company and Pixar Inc.: To acquire or not to acquire? Harvard Business Review.

Aylott, E. (2014). Employee relations (HR fundamentals). New York, NY: Kogan Page.

Barney, J. B., & Hesterly, W. S. (2014). Strategic management and competitive advantage. New York, NY: Pearson.