Date post: | 08-May-2015 |
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1155008442 Farica 1155008384 Agnes
1155008485 Tony 1155008361 Briseis
Agenda
Case reviewCompany introduction
The acquisition
Case studyAdvantage
Disadvantage
DiscussionAbout the future
Case review
Walt Disney Animation Studios
• Founded in 1923, America• 1930s Mickey Mouse & Donald Duck
51 animated 2D films in total. Not strong in 3D animation.
Snow White and the Seven Dwarves Cinderella Alice in Wonderland
Peter Pan The Lion King Mulan Winnie the Pooh
• Previously ‘Lucas Film’ computer animation workshop
• Offered 3D technique in Star Wars (1977)
Pixar Animation Studios
1986 Steve Jobs acquired Lucas Film & renamed it Pixar Animation Studios
Cooperation(1991-2004)
• 1991 Disney and Pixar signed cooperative agreement for 5 movies
• 2004 Broke up
Jobs wanted 100% revenue, not the split cost (50-50)
Jobs became the largest shareholder in Disney
The acquisition (2006)
Walt Disney Co. acquire
Pixar
Jobs being the CEO of Pixar
$7.4 billion
AdvantagesOptimistic Perspective
How they benefit from each other
Optimistic PerspectiveHow 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
Pixar : Improve the capacity of profitability and then create more value.
•Strengthening the capability to release animated cartoons•Independent administration•Gain sufficient funds
Optimistic PerspectiveHow 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.
Optimistic PerspectiveHow 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.
Optimistic PerspectiveHow 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)
Optimistic PerspectiveHow they benefit from each other
Disadvantagespessimistic perspectiveWhat’s the risk?
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
Pixar stock deal worth
14%
86%
cashstock in exchange
1billionUSD cash
Stock worth -6.4 billion USD
Financial burden
Financial burden
• Changed original ownership structure of the company.
• The Stock-for-Stock often provoke risk
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
Pixar: Free-spirited creativity
Emeryville location( the “anti-Hollywood”)Individually–decorated workspaces; huts
instead of cubiclesHawaiian shirts and scooters Policy against employment contracts
Pixar: Egalitarian Collaboration
Environment invites congregation Pixar university Themes of teamwork Bonus structure
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
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
Risk of culture
• Disney soldier Pixar artist
Apple and Jobs
• May lost rational and independent business choice.
Right or Tight?
Discussion
Discussion
Q1:
For Disney, are there any other alternatives like strategic alliance better than acquiring Pixar?
• 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
Discussion
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?
• 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
It is an OPEN question!
Thank you!