Pixar and Disney
Over the past few decades Walt Disney has dominated family entertainment. However, development of technology has changed the situation and the industry has become competitive. Pixar is a pioneer with its proprietary computer animation technology leading the animated film industry. This means computer-generated effects (CG) have replaced hand-drawn animation, which is Disney’s strength. On the other hand, the collaboration between Disney and Pixar has rejuvenated Disney. This report will firstly explain how the macro environment and industry has changed. It will then analyze the core resources and competencies for Disney and Pixar and, finally, will evaluate the best strategy for Disney to pursue next as the agreement between Disney and Pixar comes to termination.
What is happening in the macro environment at the time of the case?
Technology development is a key driver for changing animated films. This may simultaneously change economic factors and socio-cultural factors. PESTEL is the tool to analyze the broad macro-environment. (Johnson, Whittington and Scholes. 2003) Environmental influences on the animated films industry can be summarized within the following categories.
Economic
Box office revenue is not the only form of financial success. Other revenues created by movies include home video sales, cable channels and television programs. Consumer expenditure has increased by diversification of merchandise sales including toys, apparel, books and video games. (Alcacer, Collis and Furey. 2010) These factors show that the range of economic alternatives is huge. Furthermore, the concept of the sequel is an important source of revenue by reducing marketing costs because of built-in audiences.
Socio-cultural
There is a shift in value and culture as 3D movies is commonplace now. Most people would prefer to watch CG films rather than 2D. Lifestyles have changed as statistics show that home video sales have become the most important source of revenue as
What is happening in the macro environment at the time of the case?
Technology development is a key driver for changing animated films. This may simultaneously change economic factors and socio-cultural factors. PESTEL is the tool to analyze the broad macro-environment. (Johnson, Whittington and Scholes. 2003) Environmental influences on the animated films industry can be summarized within the following categories.
Economic
Box office revenue is not the only form of financial success. Other revenues created by movies include home video sales, cable channels and television programs. Consumer expenditure has increased by diversification of merchandise sales including toys, apparel, books and video games. (Alcacer, Collis and Furey. 2010) These factors show that the range of economic alternatives is huge. Furthermore, the concept of the sequel is an important source of revenue by reducing marketing costs because of built-in audiences.
Socio-cultural
There is a shift in value and culture as 3D movies is commonplace now. Most people would prefer to watch CG films rather than 2D. Lifestyles have changed as statistics show that home video sales have become the most important source of revenue as