Moon, Sung Jin; Park, Ji Hong; Theerawat<br />
AGENDA<br />I. Company overview<br />II. Problem & Analyze<br />2<br />
PIXAR - OVERVIEW<br /><ul><li>Leading digital animation studio, creating animated feature films and related products Over ...
Founded: February 3, 1986
The computer division of Lucasfilm turned into Pixar
Headquarters: Emeryville, California, U.S.
Products: RenderMan, Marionette
Acquisition by Disney: $7.4 billion, January 24, 2006
Featurd Films: Toy Story (1995), A Bug's Life (1998), Toy Story 2 (1999),Monsters, Inc. (2001), Finding Nemo (2003), The I...
The Walt Disney Company - OVERVIEW<br /><ul><li>One of the largest media conglomerates in the world
Television and feature film
ABC, ABC Family, the Disney Channel, ESPN, Miramax Films, Touchstone Television
Syndication and distribution
Buena Vista Pictures Distribution: DVDs, videos and syndicated television programming
Radio
Theme parks and attractions
Product merchandising and distribution
Founded: October 16, 1923
Founders: Walt Disney and Roy Disney
Industry: Media and Entertainment
Revenue: US$ 37.843 billion (2008)
Employees:150,000 (2008)</li></ul>Annual Revenues<br />Robert Iger<br />Roy Disney<br />Walt Disney<br />Michael Eisner<br...
Questions<br />What are the strong capabilities Pixar has? Does Disney have those or not?<br />For Disney, are there any o...
Q1. What are the strong capabilities Pixar has? <br />6<br />
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The Walt Disney Company and Pixar Inc.: To Acquire or Not to Acquire

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The Walt Disney Company and Pixar Inc.: To Acquire or Not to Acquire

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  • 275(1988)950(1994) 2,200(1999)Account for 80 %(film cost)
  • 275(1988)950(1994) 2,200(1999)Account for 80 %(film cost)
  • Transcript of "The Walt Disney Company and Pixar Inc.: To Acquire or Not to Acquire"

    1. 1. Moon, Sung Jin; Park, Ji Hong; Theerawat<br />
    2. 2. AGENDA<br />I. Company overview<br />II. Problem & Analyze<br />2<br />
    3. 3. PIXAR - OVERVIEW<br /><ul><li>Leading digital animation studio, creating animated feature films and related products Over $3 billion in gross revenues to date
    4. 4. Founded: February 3, 1986
    5. 5. The computer division of Lucasfilm turned into Pixar
    6. 6. Headquarters: Emeryville, California, U.S.
    7. 7. Products: RenderMan, Marionette
    8. 8. Acquisition by Disney: $7.4 billion, January 24, 2006
    9. 9. Featurd Films: Toy Story (1995), A Bug's Life (1998), Toy Story 2 (1999),Monsters, Inc. (2001), Finding Nemo (2003), The Incredibles (2004) , Cars (2006)</li></ul>Edwin Catmull<br />George Lucas<br />Steve Jobs<br />John Lasseter<br />3<br />
    10. 10. The Walt Disney Company - OVERVIEW<br /><ul><li>One of the largest media conglomerates in the world
    11. 11. Television and feature film
    12. 12. ABC, ABC Family, the Disney Channel, ESPN, Miramax Films, Touchstone Television
    13. 13. Syndication and distribution
    14. 14. Buena Vista Pictures Distribution: DVDs, videos and syndicated television programming
    15. 15. Radio
    16. 16. Theme parks and attractions
    17. 17. Product merchandising and distribution
    18. 18. Founded: October 16, 1923
    19. 19. Founders: Walt Disney and Roy Disney
    20. 20. Industry: Media and Entertainment
    21. 21. Revenue: US$ 37.843 billion (2008)
    22. 22. Employees:150,000 (2008)</li></ul>Annual Revenues<br />Robert Iger<br />Roy Disney<br />Walt Disney<br />Michael Eisner<br />4<br />
    23. 23. Questions<br />What are the strong capabilities Pixar has? Does Disney have those or not?<br />For Disney, are there any other alternative like strategic alliance better than acquiring Pixar?<br />What are the risky factors when Disney tries to acquire Pixar? Acquiring Pixar makes the most sense for Disney’s growth?<br />5<br />
    24. 24. Q1. What are the strong capabilities Pixar has? <br />6<br />
    25. 25. Q1. What are the strong capabilities Pixar has? <br />7<br />
    26. 26. Questions<br />What are the strong capabilities Pixar has? Does Disney have those or not?<br />For Disney, are there any other alternative like strategic alliance better than acquiring Pixar?<br />What are the risky factors when Disney tries to acquire Pixar? Acquiring Pixar makes the most sense for Disney’s growth?<br />8<br />
    27. 27. Q2. Alternatives <br />9<br />
    28. 28. Q2. Alternatives<br />CAPS (Computer Animated production system)<br />-first relationship in 1986 owned by Disney<br />-make 2D animation movies ex) Rescuer Down under, Lion King<br />10<br />
    29. 29. Questions<br />What are the strong capabilities Pixar has? Does Disney have those or not?<br />For Disney, are there any other alternative like strategic alliance better than acquiring Pixar?<br />What are the risky factors when Disney tries to acquire Pixar? Acquiring Pixar makes the most sense for Disney’s growth?<br />11<br />
    30. 30. What are the risky factors<br />Culture between<br />Disney & Pixar<br />Financial<br />Stock Dilution<br />12<br />
    31. 31. What are the risky factors<br />Culture between<br />Disney & Pixar<br />Financial<br />Stock Dilution<br />13<br />
    32. 32. What are the risky factors<br />Financial & Stock Dilution<br />Estimated Value of Pixar 6.5 billion – 7.4 billion USD<br />End of Fiscal Year 2005<br />Disney had Net Income<br />2.5 billion USD<br />How to Acquire the “near-perfect strategic fit”?<br />14<br />
    33. 33. Pixar Stock Deal Worth<br /><ul><li> 1 billion USD in Cash
    34. 34. Stock worth – 6.4 billion USD
    35. 35. 59.78USD per Pixar share</li></ul>(3.8% premium over 57.75USD for closed price)<br /><ul><li> Disney 2.3 : 1 Pixar @ 25.99USD
    36. 36. Steve Job with 7% stake turn to became Disney’s largest shareholder.</li></ul>15<br />
    37. 37. What are the risky factors<br />Culture between<br />Disney & Pixar<br />Financial<br />Stock Dilution<br />16<br />
    38. 38. Disney’s Culture<br />Big company, big bureaucracy<br />150,000 employees in 2008<br />Hierarchical structure: distant upper management, heavy-handed middle management<br />Micromanagement  low morale, “brain drain” of creative talent<br />Profitability, not quality, rules the day<br />Executives are the ones making creative decisions<br />Generic Disney formula for animated films<br />Straight-to-video “cheapquels” <br />Princess Stories series ($3 billion in sales)<br />Circle 7 Studios (“Pixaren’t”)<br />Disney makes films on a tight schedule<br />17<br />
    39. 39. Pixar: Free-Spirited Creativity<br />Emeryville location (the “anti-Hollywood”)<br />Individually-decorated workspaces; huts instead of cubicles<br />Hawaiian shirts and scooters<br />Policy against employment contracts<br />18<br />
    40. 40. Pixar: Egalitarian Collaboration<br />Environment invites congregation<br /><ul><li>Open spaces, lounges, game areas, “the bathroom effect”</li></ul>Pixar University<br />Themes of teamwork<br /><ul><li>Story of Pixar’s founding, collective action moment in Pixar’s films, “art as a team sport”</li></ul>Bonus structure<br /><ul><li>Film succeeds  everyone gets a bonus</li></ul>19<br />
    41. 41. Pixar: Perfectionism<br />Pixar short films<br />Story of Toy Story 2<br />No “cheapquels” for Pixar<br />“Pick one idea, good or bad, and stick with it until it works.”<br />20<br />
    42. 42. Pixar’s Culture<br />The three basic principles:<br />Everyone must have the freedom to communicatewith anyone.<br />It must be safe for everyone to offer ideas.<br />Stay close to innovations happening in the academic community<br />21<br />
    43. 43. Risk of Culture<br />Disney: Solider<br />Pixar: Artist<br />22<br />
    44. 44. Acquiring Pixar makes the most sense for Disney’s growth?<br />23<br />
    45. 45. “You can accomplish a lot more as one company than you can as part of a joint venture. It makes a big difference when everyone is working for the same set of shareholders.”<br />Bob Iger - Disney CEO<br />

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