Advanced Competitive Strategy: Pixar and Disney Case Study Report

This report provides a detailed analysis of the competitive relationship between Pixar and Disney, beginning with their initial collaboration and culminating in Disney's acquisition of Pixar. It explores the category of their relationship, highlighting key interactions and the beneficial aspects for both companies, including Pixar's focus on quality and employee well-being, and Disney's diverse media subsidiaries. The report further examines Pixar's performance when functioning autonomously versus in combination with Disney and concludes by assessing whether the acquisition represented a 'build or buy' scenario for Disney. The analysis includes references to relevant literature to support the findings, offering insights into the strategic dynamics of the two companies.

Running head: ADVANCED COMPETITIVE STRATEGY
ADVANCED COMPETITIVE STRATEGY
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1ADVANCED COMPETITIVE STRATEGY
Table of Contents
Category of the relationship existing between Pixar and Disney...........................................................2
Characteristic property of interactions between the two........................................................................2
Beneficial aspects of Pixar.....................................................................................................................3
Beneficial aspects of Disney..................................................................................................................3
Performance index of Pixar when functioning autonomously or in combination with the Disney.........3
In the concerned case study, in regards to Disney, is this a simple build or buy scenario......................3
References.............................................................................................................................................5

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Category of the relationship existing between Pixar and Disney
The category of relationship persisting between the Pixar and Disney will be thoroughly
depicted and elaborated in the subsequent section:
 Brief background of the context – The Pixar animation studios owes its origin to
the Emeryville of California, an American enterprise by origin. In the initial days,
Pixar was identified as a high-end computing hardware enterprise, the core product
being the image computer that was designed to serve the business requirements of the
government agencies and fits the requirements of the medical communities. Disney
Studios was one of the leading vendors of the Pixar image (Anastasia and Anthony
2015). Disney studios typically deployed the services availed from the Pixar image,
as an integral part of their CAPS project. Later on, the weak sales margin of the
Computation system of Pixar eventually provided the potential ground that led to the
development of the situation imposing potential threats to the organizational
infrastructure.
 Relationship prospectus between the two:
1. The post-production scenario of the Toy Story, led to the disagreement
between the two. Irrespective of the enormous revenue generated, Pixar
developed discontent against the Disney on the ground of non-equitable
arrangement (Graham, Yuhas and Roman 2018). The creation and the
production department was handled by Pixar, on the other hand the in charge
of the marketing and the distribution department was Disney. The ratio of
distribution of profit was 1:1.
2. Disagreements started creeping in the relationship between the two and
instigated the difficult negotiations to take place.
3. Acquisition of the Pixar by the Disney took place in the year of 2006. Disney
became the shareholder of $7.4 billion stock of Pixar.
Characteristic property of interactions between the two
 The journey of Pixar and Disney was initiated with the collaboration in the event of Computer
Animation Production Systems, which eventually turned out to be a revolutionary aspect in
the development of the traditional animated based movies.
 Disney and Pixar entered into an agreement with the sole motive to deliver one computerised
animated film. The movie was “TOY STORY”.

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 The Walt Disney Studios announced an agreement with the Pixar Animation studios for the
joint venture of producing 5 movies over a time span of 10 years.
 The year 2006 was characterised by the acquisition of the Pixar Animation studios by the
Walt Disney Company.
Beneficial aspects of Pixar
1. Pixar is concerned with the provision of rendering care to the people on a priority basis. In the
initial days, Pixar paid no heed to the well-being of the employees. However, the injuries
encountered by the employees evoked the feeling of generousness among the Pixar that
eventually imbibed the feeling of rendering proper care to the employees (Soares 2017).
2. Pixar focuses on a particular agenda that will eventually evoke a feeling of pride in the
people. The locus of the Pixar was on the quality of the output that was accompanied by the
revenue earned. Instead, if the focus would have been on the profit making aspect, the quality
of the output could have been compromised.
3. Pixar highlights the encouragement of the self-esteem, self-encouragement and channelizes its
thoughts in diversified spectrum.
Beneficial aspects of Disney
1. The competitive advantage of the Walt Disney owes its origin to the diversities witnessed in
the arenas of media subsidiaries and the entertainment prospectus (Hubbard 2017).
2. Walt Disney incorporates the Intellectual properties like the Star Wars, Disney princess and
the Mickey Mouse that render financial backup to the set of the Disney subsidiaries.
3. The infrastructure of Disney, includes the award winning squads that has eventually
popularized the brand new Intellectual properties.
Performance index of Pixar when functioning autonomously or in
combination with the Disney
Working Autonomously: The initial phase of the journey of Pixar was embedded with several
vulnerabilities that had imposed potential threats to the progress of the organization (Vedd and Liu
2017).
Working in merger with Disney: This phase was marked by the substantial rise in the profit margin
owing to the enhanced quality of the output delivered. However, this phase also stimulated the
culmination of the Pixar, owing to the acquisition by the Disney.

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In the concerned case study, in regards to Disney, is this a simple build or
buy scenario
The concerned case study illustrate the fact that the acquisition of the Pixar by the Disney was
a stepping stone in the way of attaining supremacy in the domain of animated film production. This
was indeed an intelligent step undertaken by the Disney as this would facilitate them to function
independently without any interruption in due course of their progress.

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References
Anastasia, S. and Anthony, K.H., 2015. 4 Lessons Pixar Films Can Teach Us About Architecture.
Flaig, P., 2016. Slapstick after Fordism: WALL-E, Automatism and Pixar’s Fun Factory. Animation,
11(1), pp.59-74.
Graham, J., Yuhas, H. and Roman, J., 2018. Death and Coping Mechanisms in Animated Disney
Movies: A Content Analysis of Disney Films (1937–2003) and Disney/Pixar Films (2003–2016).
Social Sciences, 7(10), p.199.
Hubbard, C.G., 2017. Young Boys and Disney: A Qualitative Study of Parents’ Perceptions about
their Sons and Disney Media (Doctoral dissertation).
Soares, T.O., 2017. Animated films and linguistic stereotypes: A critical discourse analysis of accent
use in Disney animated films.
Vedd, R. and Liu, D., 2017. The Effect of Cultural Integration on Financial Performance Post-Merger.
Global Journal of Business Research, 11(1), pp.71-84.