1. 1155008442 Farica 1155008384 Agnes
1155008485 Tony 1155008361 Briseis

2. Case review
Company introduction
The acquisition
Case study
Advantage
Disadvantage
Discussion
About the future

3. Case review

4. • Founded in 1923, America
• 1930s Mickey Mouse & Donald Duck

5. Snow White and the Seven Dwarves Cinderella Alice in Wonderland
51 animated 2D films in total.
Not strong in 3D animation.
Peter Pan The Lion King Mulan Winnie the Pooh

6. • Previously „Lucas Film‟
computer animation
workshop
• Offered 3D technique in Star
Wars (1977)
1986 Steve Jobs
acquired Lucas Film &
renamed it Pixar
Animation Studios

7. • 1991 Disney and Pixar
signed cooperative
agreement for 5 movies
• 2004 Broke up
Jobs wanted 100%
revenue, not the split
cost (50-50)

8. acquire
Jobs became the
Walt Disney Co. Pixar
largest shareholder
$7.4 billion in Disney
Jobs being the
CEO of Pixar

9. Advantages
Optimistic Perspective
How they benefit from each other

10. Optimistic Perspective
How they benefit from each other
Disney: Consolidate its dominant position in
animation industry
•The new digital era
•The requirement of creativity
•The rivalry among organizations in the animation
industry
Source: FactSet: Walt Disney daily share price

11. Optimistic Perspective
How they benefit from each other
Pixar： Improve the capacity of profitability
and then create more value.
•Strengthening the capability to release animated
cartoons
•Independent administration
•Gain sufficient funds

12. Optimistic Perspective
How they benefit from each other
Steve Jobs： Gain a much more
influence in the
multimedia field
His roughly 50% ownership of
Pixar is worth over $3.5
billion, which would be more
than enough to turn him into
Disney's largest individual
shareholder should he accept a
stock swap.

13. Optimistic Perspective
How they benefit from each other
Apple：The one who can release and share media content
based on broad band network technique win in the
competition.
• Bring out the new product---”Family recreation center”
•Apple
Media content can raising competitiveness of their products like
iMac and iPod.
• Disney
Disseminating its entertainment programs through Apple‟s new
media terminals and receiving technical support from Apple.
VS.

14. Optimistic Perspective
How they benefit from each other
Recent Development
• Share price: 38% $35.85
• Market Value: $64,000,000,000 (Nov. 30th 2011)
• Average returns to investment: 7.6%
• Dividend: 1.1%
• Robert A.Iger was intended to become
the director of Apple.
Source: FactSet: Walt Disney‟s monthly share price (2006-2011)

15. Disadvantages
pessimistic perspective
What’s the risk?

18. Financial burden
• Estimated value of Pixar 6.5 billion – 7.4
billion
• End of fiscal year of 2005 ，Disney had net
income of 2.5billion USD

19. Financial burden
1billion
USD cash
14%
cash
stock in
exchange
86%
Stock worth -6.4 billion
USD
Pixar stock deal worth

20. Financial burden
• Changed original ownership structure of
the company.
• The Stock-for-Stock often provoke risk

22. Disney’s Culture
Big company, big bureaucracy
 150,000 employee in 2008
 Hierarchical structure: distant upper management
 Micromanagement ->low morale, “brain drain” of
creative talent
Profitability, not quality, rules the
day
 Executives are the ones making creative decisions
-Generic Disney formula for animated films
-straight- to –video “cheapquels “
-makes films on a tight schedule

23. Pixar: Free-spirited creativity
Emeryville location( the “anti-Hollywood”)
Individually–decorated workspaces; huts
instead of cubicles
Hawaiian shirts and scooters
Policy against employment contracts

24. Pixar: Egalitarian Collaboration
Environment invites congregation
Pixar university
Themes of teamwork
Bonus structure

25. Pixar: Perfectionism
• Pixar short films
• no cheapquels (錄影帶首映，低成本低品質)
• Pick 1 idea, good or bad and stick it until it
works

26. The three basic principles
• Everyone must have the freedom to
communicate with anyone
• It must be safe for everyone to offer ideas
• Stay close to innovations happening in the
academic community

27. Risk of culture
• Disney soldier Pixar artist

29. Apple and Jobs
• May lost rational and independent business
choice.
Right or Tight?

30. Discussion

31. Discussion
Q1:
For Disney, are there any other alternatives
like strategic alliance better than acquiring
Pixar?

32. Discussion
• Internal Development
human&technology asset, 3D technology, development cost&fierce
competition
• Strategic Alliance(not Pixar)
with other studios, build new relationship,
distribution channel factors
• Strategic Alliance(with Pixar)
CAPS, feature film agreement,
co-production agreement
• M&A
revitalize animation department,
eliminate competition,
access to technology &human capital

33. Discussion
Q2:
Before the death of Jobs, Disney, as entertainment
industry, has brought Jobs enormous wealth.
Then, in your opinion, what about purchasing
Disney for Apple in the future?

35. It is an OPEN question!
• It is a good choice for Apple.
Apple has the ability and money to buy Disney.
Disney can bring Apple many media channels.
• It is not applicable:
two different positions
no spare time to afford for Apple