Case Study Description of Pixar Versus DreamWorks: Animating Creative Strategies
The chief executive officer (CEO) of the Indian animation studio, Tulsi Studios Ltd., is considering approaching either Pixar or DreamWorks Animation to partner on future animation projects. The case provides a perspective on the film industry to indicate how the industry is rapidly changing and expanding globally and outlines the history and past successes of the studios. The CEO must decide which potential partner to approach.
Authors :: Neil Bendle, Justin Goldberg, Krystyn Coombs
Swot Analysis of "Pixar Versus DreamWorks: Animating Creative Strategies" written by Neil Bendle, Justin Goldberg, Krystyn Coombs includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Animation Dreamworks facing as an external strategic factors. Some of the topics covered in Pixar Versus DreamWorks: Animating Creative Strategies case study are - Strategic Management Strategies, Risk management and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Pixar Versus DreamWorks: Animating Creative Strategies casestudy better are - – increasing transportation and logistics costs, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing household debt because of falling income levels, increasing inequality as vast percentage of new income is going to the top 1%, increasing commodity prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is backlash against globalization,
supply chains are disrupted by pandemic , there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Pixar Versus DreamWorks: Animating Creative Strategies
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Pixar Versus DreamWorks: Animating Creative Strategies case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Animation Dreamworks, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Animation Dreamworks operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Pixar Versus DreamWorks: Animating Creative Strategies can be done for the following purposes –
1. Strategic planning using facts provided in Pixar Versus DreamWorks: Animating Creative Strategies case study
2. Improving business portfolio management of Animation Dreamworks
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Animation Dreamworks
Strengths Pixar Versus DreamWorks: Animating Creative Strategies | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Animation Dreamworks in Pixar Versus DreamWorks: Animating Creative Strategies Harvard Business Review case study are -
Learning organization
- Animation Dreamworks is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Animation Dreamworks is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Pixar Versus DreamWorks: Animating Creative Strategies Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Strong track record of project management
– Animation Dreamworks is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Low bargaining power of suppliers
– Suppliers of Animation Dreamworks in the sector have low bargaining power. Pixar Versus DreamWorks: Animating Creative Strategies has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Animation Dreamworks to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Sales & Marketing industry
– Pixar Versus DreamWorks: Animating Creative Strategies firm has clearly differentiated products in the market place. This has enabled Animation Dreamworks to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Animation Dreamworks to invest into research and development (R&D) and innovation.
Organizational Resilience of Animation Dreamworks
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Animation Dreamworks does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High switching costs
– The high switching costs that Animation Dreamworks has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Effective Research and Development (R&D)
– Animation Dreamworks has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Pixar Versus DreamWorks: Animating Creative Strategies - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Animation Dreamworks has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Animation Dreamworks to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– Animation Dreamworks is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Neil Bendle, Justin Goldberg, Krystyn Coombs can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Operational resilience
– The operational resilience strategy in the Pixar Versus DreamWorks: Animating Creative Strategies Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Successful track record of launching new products
– Animation Dreamworks has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Animation Dreamworks has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Ability to recruit top talent
– Animation Dreamworks is one of the leading recruiters in the industry. Managers in the Pixar Versus DreamWorks: Animating Creative Strategies are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses Pixar Versus DreamWorks: Animating Creative Strategies | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Pixar Versus DreamWorks: Animating Creative Strategies are -
Workers concerns about automation
– As automation is fast increasing in the segment, Animation Dreamworks needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Increasing silos among functional specialists
– The organizational structure of Animation Dreamworks is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Animation Dreamworks needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Animation Dreamworks to focus more on services rather than just following the product oriented approach.
Need for greater diversity
– Animation Dreamworks has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Interest costs
– Compare to the competition, Animation Dreamworks has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
High operating costs
– Compare to the competitors, firm in the HBR case study Pixar Versus DreamWorks: Animating Creative Strategies has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Animation Dreamworks 's lucrative customers.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Animation Dreamworks is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Pixar Versus DreamWorks: Animating Creative Strategies can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High bargaining power of channel partners
– Because of the regulatory requirements, Neil Bendle, Justin Goldberg, Krystyn Coombs suggests that, Animation Dreamworks is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Pixar Versus DreamWorks: Animating Creative Strategies, in the dynamic environment Animation Dreamworks has struggled to respond to the nimble upstart competition. Animation Dreamworks has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow decision making process
– As mentioned earlier in the report, Animation Dreamworks has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Animation Dreamworks even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Skills based hiring
– The stress on hiring functional specialists at Animation Dreamworks has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Pixar Versus DreamWorks: Animating Creative Strategies, it seems that the employees of Animation Dreamworks don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Opportunities Pixar Versus DreamWorks: Animating Creative Strategies | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Pixar Versus DreamWorks: Animating Creative Strategies are -
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. Animation Dreamworks can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Animation Dreamworks can use these opportunities to build new business models that can help the communities that Animation Dreamworks operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Animation Dreamworks to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Animation Dreamworks to hire the very best people irrespective of their geographical location.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Animation Dreamworks in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing segment, and it will provide faster access to the consumers.
Low interest rates
– Even though inflation is raising its head in most developed economies, Animation Dreamworks can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Developing new processes and practices
– Animation Dreamworks can develop new processes and procedures in Sales & Marketing industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Better consumer reach
– The expansion of the 5G network will help Animation Dreamworks to increase its market reach. Animation Dreamworks will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Animation Dreamworks can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Learning at scale
– Online learning technologies has now opened space for Animation Dreamworks to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Using analytics as competitive advantage
– Animation Dreamworks has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Pixar Versus DreamWorks: Animating Creative Strategies - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Animation Dreamworks to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Animation Dreamworks can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Animation Dreamworks in the consumer business. Now Animation Dreamworks can target international markets with far fewer capital restrictions requirements than the existing system.
Manufacturing automation
– Animation Dreamworks can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Threats Pixar Versus DreamWorks: Animating Creative Strategies External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Pixar Versus DreamWorks: Animating Creative Strategies are -
Environmental challenges
– Animation Dreamworks needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Animation Dreamworks can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Consumer confidence and its impact on Animation Dreamworks demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Technology acceleration in Forth Industrial Revolution
– Animation Dreamworks has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Animation Dreamworks needs to keep up with the evolution of technology in the Sales & Marketing sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Animation Dreamworks will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Stagnating economy with rate increase
– Animation Dreamworks can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Animation Dreamworks can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Pixar Versus DreamWorks: Animating Creative Strategies .
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Animation Dreamworks needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Regulatory challenges
– Animation Dreamworks needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Sales & Marketing industry regulations.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Animation Dreamworks with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing wage structure of Animation Dreamworks
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Animation Dreamworks.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Animation Dreamworks.
Weighted SWOT Analysis of Pixar Versus DreamWorks: Animating Creative Strategies Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Pixar Versus DreamWorks: Animating Creative Strategies needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Pixar Versus DreamWorks: Animating Creative Strategies is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Pixar Versus DreamWorks: Animating Creative Strategies is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Pixar Versus DreamWorks: Animating Creative Strategies is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Animation Dreamworks needs to make to build a sustainable competitive advantage.