The Walt Disney Company and Pixar, Inc.: To Acquire or Not to Acquire? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of The Walt Disney Company and Pixar, Inc.: To Acquire or Not to Acquire?
Soon after Robert Iger took over as CEO of the Walt Disney Company in late 2005, he turned his attention toward Pixar, the animation studio with which Disney had worked since 1991 and was responsible for producing hits such as Toy Story and Finding Nemo. Disney's own animated film business had been in decline since Jeffrey Katzenberg left to establish rival studio Dreamworks and the business relied on revenue from its partnership with Pixar to maintain performance. With the Co- Production Agreement between the two studios coming to a close in 2006, Pixar was looking to negotiate better terms with another distribution partner. Could Disney risk losing them?
Authors :: Juan Alcacer, David J. Collis, Mary Furey
Swot Analysis of "The Walt Disney Company and Pixar, Inc.: To Acquire or Not to Acquire?" written by Juan Alcacer, David J. Collis, Mary Furey includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Pixar Disney facing as an external strategic factors. Some of the topics covered in The Walt Disney Company and Pixar, Inc.: To Acquire or Not to Acquire? case study are - Strategic Management Strategies, Mergers & acquisitions and Strategy & Execution.
Some of the macro environment factors that can be used to understand the The Walt Disney Company and Pixar, Inc.: To Acquire or Not to Acquire? casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, banking and financial system is disrupted by Bitcoin and other crypto currencies, digital marketing is dominated by two big players Facebook and Google, customer relationship management is fast transforming because of increasing concerns over data privacy, talent flight as more people leaving formal jobs, increasing commodity prices, competitive advantages are harder to sustain because of technology dispersion,
increasing transportation and logistics costs, increasing energy prices, etc
Introduction to SWOT Analysis of The Walt Disney Company and Pixar, Inc.: To Acquire or Not to Acquire?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The Walt Disney Company and Pixar, Inc.: To Acquire or Not to Acquire? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Pixar Disney, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Pixar Disney 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 The Walt Disney Company and Pixar, Inc.: To Acquire or Not to Acquire? can be done for the following purposes –
1. Strategic planning using facts provided in The Walt Disney Company and Pixar, Inc.: To Acquire or Not to Acquire? case study
2. Improving business portfolio management of Pixar Disney
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Pixar Disney
Strengths The Walt Disney Company and Pixar, Inc.: To Acquire or Not to Acquire? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Pixar Disney in The Walt Disney Company and Pixar, Inc.: To Acquire or Not to Acquire? Harvard Business Review case study are -
High switching costs
– The high switching costs that Pixar Disney 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)
– Pixar Disney 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 The Walt Disney Company and Pixar, Inc.: To Acquire or Not to Acquire? - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to lead change in Strategy & Execution field
– Pixar Disney is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Pixar Disney in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Superior customer experience
– The customer experience strategy of Pixar Disney in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Analytics focus
– Pixar Disney 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 Juan Alcacer, David J. Collis, Mary Furey 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.
Cross disciplinary teams
– Horizontal connected teams at the Pixar Disney are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Organizational Resilience of Pixar Disney
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Pixar Disney does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to recruit top talent
– Pixar Disney is one of the leading recruiters in the industry. Managers in the The Walt Disney Company and Pixar, Inc.: To Acquire or Not to Acquire? are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Innovation driven organization
– Pixar Disney is one of the most innovative firm in sector. Manager in The Walt Disney Company and Pixar, Inc.: To Acquire or Not to Acquire? Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Strong track record of project management
– Pixar Disney is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Successful track record of launching new products
– Pixar Disney has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Pixar Disney 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.
Highly skilled collaborators
– Pixar Disney has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in The Walt Disney Company and Pixar, Inc.: To Acquire or Not to Acquire? HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses The Walt Disney Company and Pixar, Inc.: To Acquire or Not to Acquire? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The Walt Disney Company and Pixar, Inc.: To Acquire or Not to Acquire? are -
Lack of clear differentiation of Pixar Disney products
– To increase the profitability and margins on the products, Pixar Disney needs to provide more differentiated products than what it is currently offering in the marketplace.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the The Walt Disney Company and Pixar, Inc.: To Acquire or Not to Acquire? HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Pixar Disney has relatively successful track record of launching new products.
Skills based hiring
– The stress on hiring functional specialists at Pixar Disney 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.
High operating costs
– Compare to the competitors, firm in the HBR case study The Walt Disney Company and Pixar, Inc.: To Acquire or Not to Acquire? 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 Pixar Disney 's lucrative customers.
No frontier risks strategy
– After analyzing the HBR case study The Walt Disney Company and Pixar, Inc.: To Acquire or Not to Acquire?, it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
High bargaining power of channel partners
– Because of the regulatory requirements, Juan Alcacer, David J. Collis, Mary Furey suggests that, Pixar Disney 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.
Increasing silos among functional specialists
– The organizational structure of Pixar Disney is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Pixar Disney needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Pixar Disney to focus more on services rather than just following the product oriented approach.
Workers concerns about automation
– As automation is fast increasing in the segment, Pixar Disney 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.
Need for greater diversity
– Pixar Disney 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study The Walt Disney Company and Pixar, Inc.: To Acquire or Not to Acquire?, it seems that the employees of Pixar Disney 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study The Walt Disney Company and Pixar, Inc.: To Acquire or Not to Acquire?, is just above the industry average. Pixar Disney needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Opportunities The Walt Disney Company and Pixar, Inc.: To Acquire or Not to Acquire? | 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 The Walt Disney Company and Pixar, Inc.: To Acquire or Not to Acquire? are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Pixar Disney is facing challenges because of the dominance of functional experts in the organization. The Walt Disney Company and Pixar, Inc.: To Acquire or Not to Acquire? case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Pixar Disney can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Pixar Disney can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Pixar Disney to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Learning at scale
– Online learning technologies has now opened space for Pixar Disney 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Pixar Disney 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Pixar Disney can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Manufacturing automation
– Pixar Disney can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution 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.
Buying journey improvements
– Pixar Disney can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. The Walt Disney Company and Pixar, Inc.: To Acquire or Not to Acquire? suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Pixar Disney in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Loyalty marketing
– Pixar Disney has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Developing new processes and practices
– Pixar Disney can develop new processes and procedures in Strategy & Execution 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Pixar Disney can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. Pixar Disney can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats The Walt Disney Company and Pixar, Inc.: To Acquire or Not to Acquire? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study The Walt Disney Company and Pixar, Inc.: To Acquire or Not to Acquire? are -
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Pixar Disney can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Pixar Disney in the Strategy & Execution sector and impact the bottomline of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study The Walt Disney Company and Pixar, Inc.: To Acquire or Not to Acquire?, Pixar Disney may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
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. Pixar Disney needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Pixar Disney business can come under increasing regulations regarding data privacy, data security, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Pixar Disney in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Environmental challenges
– Pixar Disney 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. Pixar Disney can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
High dependence on third party suppliers
– Pixar Disney high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Increasing wage structure of Pixar Disney
– 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 Pixar Disney.
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. Pixar Disney 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
– Pixar Disney 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Pixar Disney with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
Weighted SWOT Analysis of The Walt Disney Company and Pixar, Inc.: To Acquire or Not to Acquire? 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 The Walt Disney Company and Pixar, Inc.: To Acquire or Not to Acquire? 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 The Walt Disney Company and Pixar, Inc.: To Acquire or Not to Acquire? 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 The Walt Disney Company and Pixar, Inc.: To Acquire or Not to Acquire? 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 The Walt Disney Company and Pixar, Inc.: To Acquire or Not to Acquire? 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 Pixar Disney needs to make to build a sustainable competitive advantage.
