disney and pixar case study

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• Disney Pixar Merger Case Study

Disney purchased Pixar in 2006 for approximately $7.4 billion and as of July 2019, Disney Pixar feature films have earned the worldwide box office an average gross of $680 million per film.

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True or False?The acquisition gave Walt Disney access to Pixar's technology, which was very important to them. It also provided Walt Disney with new characters that would help the company create new revenue streams. 

True or False?Pixar is known for its technological expertise in 2D animation. Their in-house creativity is the reason why they can create such innovative films.  

True or False?A cultural clash between the Walt Disney and Pixar was involved. Since Pixar had built a culture around their corporate culture, Pixar was worried that theirs would be ruined by Disney.  

How many films did Disney agree to make with Pixar in the space of 10 years?

when Disney and Pixar merged and made films, such as Toy Story and Cars, was it huge hits with consumers?

True or False?The merger of Walt Disney and Pixar was among the most successful corporate transactions in recent years?

What factors led to Disney's decision to merge with Pixar?

To allow for the merger, the studios also needed to ... who would guide the growth of the company. 

What is not a benefit of vertical merger?

What are the advantages of Disney-Pixar merger?

A vertical merger is the merge of two or more companies that... 

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Due to the emergence of 3D-Computer graphic films, such as Finding Nemo (a Disney Pixar production), a competitive rise occurred in the computer graphics (CG) industry. Some of the leading companies such as DreamWorks and Pixar emerged as the most promising players in this field. During this period, Walt Disney had a few hits in 2D animation. However, due to the technological limitations of the industry, Disney was struggling to compete with the likes of Pixar.

The case is that if Walt Disney has such technological limitations, then why not acquire a company like Pixar which is skilled at 3D computer graphics? Will Pixar's freedom and creativity fit with Walt Disney's corporate governance, or will it do more harm than good? In this case study, we will investigate Walt Disney's acquisition of Pixar Animation Studios and analyse the relationship that would lead to tremendous success.

Merger of Disney and Pixar

The merger of Disney and Pixar took place in 2006 when Disney bought the Pixar company. Disney was stuck in a conundrum, still producing old-fashioned animation: the company had to innovate; otherwise, it would lose its competitive edge. On the other hand, Pixar's culture and environment were innovative and creative. Therefore, Disney saw this as the perfect opportunity for collaboration . So the two companies merged through a vertical merger.

Introduction to the case

The relationship between Disney and Pixar began in 1991 when they signed a co-production deal to create three animated films, with one of them being Toy Story released in 1995. The success of Toy Story lead to another contract i n 1997, which would allow them to produce five movies together over the next ten years.

Steve Jobs, the previous CEO of Pixar, said that the Disney-Pixar merger would allow the companies to collaborate more effectively, allowing them to focus on what they do best. The merger between Disney and Pixar allowed the two companies to collaborate without any external issues . However, investors were worried that the acquisition would threaten the Disney movie culture.

Disney and Pixar merger

Disney wanted to marry the style of their previous films with the exceptional storytelling techniques of Pixar, eventually resulting in the merger.

Before the merger took place, Disney was caught in a conundrum. The company had two choices: continue making old fashioned hand-drawn movies or make a new type of Disney movie using the digital animation that was now available due to modern technology.

Disney decided to take on the new animation culture with the help of Pixar.

Since the acquisition of Pixar, Disney has implemented some of the company's animation techniques into its films and produced Frozen. This Walt Disney Pixar movie was a box office success.

Disney has been saved in many ways by the work of Pixar Animation Studios. Pixar came in and created eye-catching animated movies that were under the Disney name. However, this also posed a problem, as Disney had lost its animation culture. They were no longer catching the eye of the public with their hand-drawn movies. However, when Disney and Pixar, made films together, they were always big hits.

Pixar case study strategic management

The success of Pixar Animation can be attributed to its unique and distinctive way of creating characters and storylines. Due to the company's unique and innovative approach , they have been able to stand out from the rest of the industry.

Pixar pushed itself to invent its own unique animation techniques. They needed to find a way to attract and retain a creative group of artists that would help them become a successful company.

Aside from technology, Pixar also has a culture that values creativity and innovation. This is evidenced by the company's commitment to continuous improvement and employee education . Ed Catmull has been instrumental in developing the creative department and ensuring that everyone is on the same page. This is also evidenced by the requirement that every new employee spends ten weeks at Pixar University. This program is focused on employee preparation and development . It is also used to prepare new employees for the company's creative department.

To learn more about the internal environment of an organization, take a look at our explanations on human resource management .

Disney and Pixar merger explained

In a vertical merger , two or more companies that produce the same finished products through different supply chain functions team-up. This procedure helps in creating more synergies and cost-efficiency.

A vertical merger can help boost profitability, expand the market, and reduce costs .

For instance, when Walt Disney and Pixar merged, it was a vertical merger because the former has a specialization in distribution whilst also having a strong financial position and the latter owned one of the most innovative animation studios. These two companies were operating at different stages and were responsible for the production of great movies all around the world.

The merger of Walt Disney and Pixar was among the most successful corporate transactions in recent years. It was mainly due to the companies' negotiations. When the preliminary analysis was done, it showed that the merger would be beneficial for both the companies and consumers.

The merger of Disney and Pixar is based on two alliances.

The Sales Alliance involves both the Disney and Pixar companies working together to maximize the profits from their products.

The Investment Alliance, whereby Disney and Pixar have got into an alliance in which they will share profits from the movies.

Disney and Pixar merger analysis

As a result of the merger, Disney and Pixar were able to capitalize on the potential of Pixar to create a brand-new generation of animated movies for Disney. This is also evidenced by the revenue generated from the movies made together by both Disney and Pixar.

Investors saw the potential of the computer-animated character to be used in Disney's vast network market.

The revenue achieved by Cars was about $5 million.

Walt Disney and Pixar also developed other successful films together such as Toy Story and The Incredibles.

Disney kept Pixar's management in place to ensure a smooth transition. This was also necessary for the growth of trust that would allow Steve Jobs to approve the merger. Because of the disruption that Steve had at Disney, the companies had to create a set of guidelines that would safeguard the creative culture of Pixar when acquiring the company.

To allow for the merger, the studios also needed to create a strong team of leaders who would guide the growth of the company.

To learn more about the role of organizational culture have a look at our explanation on change management .

Disney-Pixar merger synergy

Synergy refers to the combined value of two companies, which is greater than the sum of their individual parts. It is often used in the context of mergers and acquisitions (M&A).

Pixar's successful acquisition with Disney has been incredibly profitable, with the company releasing over 10 full feature animated films globally, all of them reaching a total gross of over $360,000,000. Through the years, Disney and Pixar have been able to successfully combine forces and create a profitable business model. Over the course of 18 years, these Disney Pixar films have grossed over $7,244,256,747 worldwide. With a gross profit of $5,893,256,747.

The merger of Disney and Pixar has resulted in greater creative output. Since the acquisition, Disney-Pixar has plans to release movies twice a year as Pixar has the technology to help do so. The value and performance of the Disney and Pixar merger have been very successful because they have made large profits (e.g. Toy Story, A Bugs life, Cars). These have been produced using Pixar technology. This has also benefited Pixar as Disney has given large amounts of funding for their studios so they can create these films and use Disney's name to reach a larger audience, resulting in a synergy.

Pros and cons of the Disney-Pixar merger

One of the most successful mergers in history was the Walt Disney and Pixar merger. Although many mergers fail, they can also be successful.

In most cases, the merger brings advantages such as lower cost of production, better management team, and increased market share but they can also cause job losses and bankruptcy. Most mergers are highly risky but with the right knowledge and intuition, they can succeed. Below is the list of pros and cons of the Walt Disney and Pixar merger.

Pros of Disney-Pixar merger

The acquisition gave Walt Disney access to Pixar's technology, which was very important to them. It also provided Walt Disney with new characters that would help the company create new revenue streams.

Walt Disney also had its existing famous animated characters it could provide Pixar.

Walt Disney also gained market power by acquiring another rival company (Pixar). This would make both Walt Disney and Pixar companies have a stronger position in the market.

Walt Disney had a larger budget , which allowed Pixar to explore other opportunities that they might not have had the resources to pursue. Also, due to Walt Disney having more financial resources, they were able to start more projects and provide more security.

The acquisition would allow Steve Jobs to put Walt Disney content in the App Store, which would provide more revenue for Walt Disney and Pixar.

Walt Disney's large size gives it many advantages, such as a large human resource base, many qualified managers and a large amount of funds.

Pixar is known for its technological expertise in 3D animation. Their in-house creativity is the reason why they can create such innovative films. This was important for Disney to acquire, as they were lacking technological expertise in 3D animation.

Pixar mainly focuses on quality , and this is what makes Pixar different from other companies. They also use the bottom-up approach , where the input of their employees is highly valued.

Cons of Disney-Pixar merger

There were differences in the structure of Walt Disney and Pixar company, with Pixar artists no longer being independent , and Walt Disney now making most of the decisions.

A cultural clash between Walt Disney and Pixar took place. Since Pixar had built an environment based on its innovative culture, Pixar was worried that it would be ruined by Disney.

Conflicts between Walt Disney and Pixar occurred because of the takeover. This happened because of the hostile environment that often accompanies a takeover, which resulted in disagreements between the management and the other parties involved.

When it came to the creative freedom of Pixar, it had a fear that its creation would be restricted under Walt Disney's acquisition.

The main reason for the merger between Disney and Pixar was for Walt Disney to acquire and use the modern animation technology of Pixar to expand its reach in the market, whereas Pixar was now able to use Walt Disney's vast distribution network and funds. The acquisition gave Disney new ideas and technology, which helped the company produce more blockbuster movies. The negotiation that led to the Disney-Pixar merger was also instrumental in the company's success. This was also the reason for the huge revenue that was generated together by both companies.

Disney Pixar Merger Case Study - Key takeaways

In 1991, Walt Disney and Pixar Animation Studios established a relationship that would lead to tremendous success.

Walt Disney purchased Pixar company in 2006 for approximately $7.4 billion.

Walt Disney wanted to marry the style of their previous films with the exceptional storytelling techniques of Pixar.

The merger of Walt Disney and Pixar was among the most successful corporate transactions in recent years. It was mainly due to the companies' negotiations.

Pixar's successful partnership with Walt Disney has been incredibly profitable, with the company releasing over 10 full feature animated films globally, and all of them reaching a total gross of over $360 million.

The main reason for the merger between Disney and Pixar was for Walt Disney to acquire and use the modern animation technology of Pixar to expand its reach in the market, whereas Pixar was now able to use Walt Disney's vast distribution network and funds.

The New York Times: Disney Agrees to Acquire Pixar. https://www.nytimes.com/2006/01/25/business/disney-agrees-to-acquire-pixar-in-a-74-billion-deal.html

Flashcards in Disney Pixar Merger Case Study 14

True or False?

The acquisition gave Walt Disney access to Pixar's technology, which was very important to them. It also provided Walt Disney with new characters that would help the company create new revenue streams. 

Pixar is known for its technological expertise in 2D animation.  Their in-house creativity is the reason why they can create such innovative films.  

A cultural clash between the Walt Disney and Pixar was involved. Since Pixar had built a culture around their corporate culture, Pixar was worried that theirs would be ruined by Disney.  

The merger of Walt Disney and Pixar was among the most successful corporate transactions in recent years?

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Frequently Asked Questions about Disney Pixar Merger Case Study

Why was the Disney Pixar merger a success? 

The merger of Walt Disney and Pixar was among the most successful corporate transactions in recent years. It was mainly due to the companies' negotiations. When the preliminary analysis was done, it showed that the merger would be beneficial for both the companies and consumers. The value and performance of the Disney and Pixar merger have been very successful because they have made large profits 

What type of merger were Disney and Pixar? 

Disney and Pixar merger was a vertical merger. In a   vertical  merger , two or more companies that produce the same finished products through different supply chain functions team up.  This procedure helps in creating more synergies and cost-efficiency. 

How can the synergies between Disney and Pixar be developed? 

Since the acquisition, Disney-Pixar has plans to release movies twice a year as Pixar has the technology to help do so. This has also benefited Pixar as Disney has given large amounts of funding for their studios so they can create these films and use Disney's name to reach a larger audience, resulting in a synergy.

What happened when Disney bought Pixar? 

Pixar's successful acquisition with Disney has been incredibly profitable, with the company releasing over 10 full feature animated films globally, all of them reaching a total gross of over $360,000,000. 

Was acquiring Pixar a good idea? 

Yes, acquiring Pixar was a good idea because Pixar's successful partnership with Walt Disney has been incredibly profitable, with the company releasing over 10 full feature animated films globally, all of them reaching a total gross of over $360 million. 

Test your knowledge with multiple choice flashcards

True or False?The acquisition gave Walt Disney access to Pixar's technology, which was very important to them. It also provided Walt Disney with new characters that would help the company create new revenue streams. 

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The Walt Disney Company and Pixar Inc.: To Acquire or Not to Acquire?

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• | Language: English
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About The Authors

Juan Alcacer

David J. Collis

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• The Walt Disney Company and Pixar Inc.: To Acquire or Not to Acquire?  By: Juan Alcacer, David J. Collis and Mary Furey

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This four-page update to the case, "The Walt Disney Company and Pixar Inc.: To Acquire or Not to Acquire?" details the Walt Disney Company's acquisition of Pixar, including deal terms, executive…

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This four-page update to the case, "The Walt Disney Company and Pixar Inc.: To Acquire or Not to Acquire?" details the Walt Disney Company's acquisition of Pixar, including deal terms, executive appointments, and operating guidelines for the two studios.

Mar 4, 2009 (Revised: Jan 11, 2010)

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How Disney Became The World's Entertainment Leader

Table of contents, here’s what you’ll learn from disney’s strategy study:.

• How long-term clarity builds tenacity and fosters innovation.
• How focusing on moon shots in the short-term can hurt you in the mid-term.
• How to make huge business deals based on honesty and trust.
• How your brand can become a powerful strategic enabler.
• How to develop deeper relationships with your customers at scale.
• How to use data to innovate at a business level.
• How to embrace disruptions and make them part of your strategy.
• How to take care of your people as an international entity.

The company's trajectory has fluctuated through its long history, but at its highest points, it has left its mark in more than one way. The Walt Disney Company has earned multiple times the leading position in animation. Still, it has transformed into a global behemoth with a more than substantial presence in numerous industries, from theme parks and cruise lines to live-action film production to consumer products. Disney is an excellent example of a company that is more than the sum of its parts.

Very few organizations worldwide can boast numbers better or even close to those of Disney:

• Revenue of $82.7 billion in 2022
• Brand value of $60.5 billion in 2022
• Total assets of over $200 billion in 2022
• Number of employees: 220.000 as of 2022
•  Disney has 12 theme parks around the world, 9 Disney Resorts  and  5 cruise ships  (with 2 more en route)
• The Disney+ streaming service reached 161.8 million subscribers in Q1 2023  

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The Humble Beginnings of a Magical Imagination

Today his name is recognizable globally, and mentioning it awakens feelings of joy and wonder to adults and children alike. Walt Disney and his older brother Roy founded the Disney Brothers Cartoon Studio on October 16 of 1923, the entity that was destined to become the colossus known today as The Walt Disney Company.

Walt Disney was born in 1901 in Chicago, Illinois, and developed an interest in art and drawing from a very young age. When he was 4 years old, his family moved to a farm outside of Marceline, a place where young Walt was exposed to nature, animals, and the small-town life that sparked his imagination and allowed it to expand and run wild.

Pursuing art and entrepreneurship

At just the age of seven, he sold his first drawings. Due to financial troubles, two years later, he started helping his father deliver newspapers. However, he continued honing his drawing skills and developing his art education.

At the age of 18, he had his first encounter with animation in Pesman Art Studio, where he met a fellow artist named Ub Iwerks. Disney and Iwerks soon had a failed attempt at creating their own commercial company, and later on, Disney founded another company, a film studio, where he employed Iwerks, among others, as an animator.

In 1923 Disney had to declare bankruptcy due to high costs, resulting in his second entrepreneurial attempt. Nevertheless, his work in the animation industry didn’t go unnoticed, earning him a contract that led to the Disney Brothers Cartoon Studio’s first production, a series named “Alice comedies” which mixed live-action motion-picture photography with cartoon animation. One of the first such productions.

Disney worked on the series until 1927, with his friend and former partner Iwerks producing more than 50 films. His next creation, “Oswalt the Lucky Rabbit”, was produced for Universal Studios and was a hit. However, during negotiations, he realized that he had painted himself to a corner, signing away all of the rights for Oswalt when he accepted the contract and losing all of his animators, except for Iwerks, to Universal Studios.

Disney and Iwerks went on and created Mickey Mouse as an answer, retaining all the rights this time. Disney lent his voice to Mickey and Iwerks drew him. Together they created the first cartoon with synchronized sound, the short film “Steamboat Willie”, which was the first film with Mickey that had a distributor and was the start of the mouse’s exploding career. Actually, the film was so successful and significant as an innovation that in 1998 was added to the National Film Registry by the United States Library of Congress.

Demonstrating pioneering

Walt Disney's vision and innovative spirit were demonstrated in 1937 when the first feature-length animated film premiered, “Snow White and the Seven Dwarves.” The film took three years to complete and was nicknamed “Disney’s Folly” by industry insiders due to its revolutionary nature. The risk for the company, now called “Walt Disney Productions,” was great since it exceeded four times its initial budget and had more than 300 people working on it.

In complete contrast to all the naysayers, the novel experience that Walt Disney had created with this film, which elicited the full range of human emotions, was an absolute success. Its release was received with immense praise by critics, audiences, and magazines, granting its creator an honorary Oscar. Financially, not only did it cover its budget, but it also generated enough profit that Walt Disney built a new studio in Burbank, California, and an exemplary corporate culture. The company’s headquarters are still there to this day.

Flexing in the pursuit of the vision

Walt Disney had a vision. He wanted everyone to share the wonder and excitement he experienced when he was a little boy in Marceline. And with that in mind, in 1952, although his company was quite successful and profitable, Walt Disney put everything on the line selling his shares, liquidating his assets, selling off property, borrowing against his life insurance policy, going to great lengths to gather as many resources as he could the one thing that would advance his vision.

Disneyland, his greatest achievement, opened its doors in 1955, and it was a theme park like no other before it. Contrary to the theme parks of the time, Walt’s Disneyland was a safe place, clean and untouched by unlawfulness. It had a coherent story throughout the park, and it was an immersive experience for adults and children, a place where, with Walt Disney’s words, “Here you leave today and enter the world of yesterday, tomorrow and fantasy.”

The park recorded revenues of more than $10 million and 3.6 million guests during its first year of operation. Its success holds today, as it is constantly expanding with new attractions being added regularly. Before his death in 1966, he started working on a second theme park, the Walt Disney World, but he didn’t manage to experience its opening.

Disney holds the record for most individual Oscar wins with a staggering 22 wins. In addition, he was presented with the George Washington Award and the Presidential Medal of Freedom. Along with his brother Roy, they helped establish in 1961 the California Institute of the Arts.

Key Takeaway #1: A clear vision drives perseverance and innovation

The Walt Disney Company’s international and intergenerational success didn’t occur by accident. Its founder’s clarity of vision and unrestful spirit drove him to take multiple risks in his career and achieve some of the greatest innovations of his industry.

His failures and setbacks, though many, didn’t extinguish the flame of his creativity. His best creations came after his biggest failures and he never sacrificed his freedom to pursue his cause for a safer and easier future. Although he made many mistakes, he was constantly exploring new ways to advance his vision and supply the world with wonder, magic, and unique and safe experiences.

Disney’s Expansion

The Walt Disney Company didn’t grow to its current enormous size overnight. Since the opening of Disneyland in 1955, the company has made numerous strategic moves to expand its parks and resorts and its services and assets. Among others, it increased its distribution capabilities, obtained media assets, increased its channels, and widely diversified its activities.

Media expansion

Although Disney had produced and aired many shows, films, and other television content, it always did so through other, already established networks. It wasn’t until 1983 that the company launched its own premium channel and used it as a content distribution platform to promote other activities and events like the openings of its new theme parks.

Shortly after that, Disney expanded its audience, launching channels in Taiwan, the United Kingdom, and Malaysia. There was a specific reason that Disney needed to expand its media reach to foreign markets and develop its audience. Once it had attained a baseline of viewers, it could then advertise the new rides of its later installed theme parks.

In the following decades, various moves were made to expand internationally, but at best the penetration to foreign markets was decent. Despite major moves that increased its reach in the US market, it wasn’t until much later, after 2005, that serious effort was made for deeper international market penetration.

However, the biggest transformation of the company's media segment happened in 2019, when Disney made the massive acquisition of 21st Century Fox for more than $71 billion, the biggest acquisition in its history. From that point on, Disney became mostly a media company concerning its assets.

The Death of the Founder: Did he take the company’s creativity with him?

However, since the death of Walt Disney in 1966, the company suffered in the animation industry, failing to reproduce massively successful productions. That lack of memorable films and characters was felt across its theme parks, as well.

Disneyland parks have relied heavily on the local population to stay profitable. Thus, to attract nearby residents, they require regular reinventions of the performative content inside the parks and the additions of new and exciting rides. The lack of successful films and recognizable characters had provided only minor updates to the park since 1964.

Nonetheless, some of the most extraordinary expansions happened during the first decade of Michael Eisner’s tenure as CEO of The Walt Disney Company, which in total lasted 21 years (1984-2005). As the head of Disney, he was bold and calculated, making strategic moves that increased the company’s international reach and even carried Disney through some tough times.

The Disney Renaissance Period

Since Michael Eisner headed Disney, he and Frank Wells, president and later COO of the company, found, to their amazement, a mountain of dusted material and assets that had a remarkable potential for the future of the company. They were excited and eager to exploit every last one of them. And so they did.

Eisner was very aggressive in expanding the parks, adding new resorts, and adopting a more profitable pricing strategy. He disagreed with the notion that when Walt Disney left this world, he also took with him the soul of Disney and the possibility of making it again the leading producer of original and timeless animation films.

Hence, he put a considerable focus on making quality, new animation films. Successful in his endeavor, he produced movies like “The Little Mermaid”, “Beauty and the Beast” and “The Lion King” that sparked what was later called the Disney Renaissance period. Now he had original Disney characters to promote and populate the parks.

Under Eisner’s guidance, Disney opened seven new parks around the world including “Disney’s Animal Kingdom”, “Disney’s California Adventure”, “Disneyland Paris” (initially Euro Disney), “Hong Kong Disneyland” and one of the best Disney parks, “Tokyo DisneySea”. Eisner encouraged and approved ambitious new rides and shows for both existing and new theme parks alongside the new parks.

These moves contributed greatly to the international expansion of Disney.

He didn’t stop there, however. He wanted to activate all of Disney’s assets and make them profitable. The Disney channel got new productions, aiming at claiming higher Saturday-morning numbers with cheaper animation. He cooperated with big names in the film industry to produce, act and perform on new products.

One of the most cash-producing decisions that the company made under Eisner was the release of its animated classic feature films on video. This unexpectedly lucrative decision was, in essence, tapping into an underutilized market and took advantage of a fascinating habit, persistent to this day, of young kids to watch animation movies a nightmarish (for their parents) amount of times.

Disney Stores, Cruises, and Lifesaving Moves

These successes fueled the expansions of the theme parks and drove significant profits with their physical products. With some service-oriented moves that made the client experience uniquely enjoyable, Disney nearly doubled their stores and even introduced their first one in London.

The initial fear that the increase of stores would compete with other retail outlets that sold Disney-licensed products was quickly busted, since instead of driving their sales down, every new Disney store increased the sales of Disney-related products of nearby stores, too.

In 1996 an original and highly profitable segment of The Walt Disney Company was established, the Disney Cruise Line. The experience in a Disney cruise was designed to offer a sense of luxury of a bygone era coupled with modern amenities. The first two ships, “Disney Magic” and “Disney Wonder” are still active to this day, underscoring their lovable and flourishing voyages.

As profitable and treasured those moves may have been, the one that provided the most invaluable assets to the company was arguably the acquisition of Capital Cities/ABC Inc. in 1996.

Buying a network was in Eisner’s plans for years, and even though a few other networks besides Cap Cities were considered, conversations about ABC were happening years before. Disney tremendously increased its distribution power with the acquisition, being the first company with a major presence in filmed entertainment, broadcasting, cable television, and telephone wires. This proved lifesaving in the following barren decade.

The price of success

In spite of all the success in the 80s, the late 90s and early 2000s were not a good time for Disney. The expansion had taken a toll on the company. During the Renaissance Period, every single project that Disney undertook was always exceeding the initial budget.

Disneyland Paris, originally Euro Disney Resort, went more than a billion over its budget and struggled for many years to become profitable. Its opening day was a disappointment. Key decisions regarding Europe’s cultural habits and based on overly ambitious projections almost closed the park’s gates forever.

On the creative side, Disney strayed from its path and target audience. It produced films and music that were inappropriate for families and young children. In its pursuit of global domination and higher profits, the company made mistakes of arrogance, got involved in many unpopular stories, and damaged its brand.

Internally, people felt they were treated unfairly, and the company's structure became so centered that Disney became rigid and no original ideas could be developed.

Key Takeaway #2: There is such a thing as going too fast

A few years after the death of its founder, Disney went through a rough patch. However, its leadership was determined to conquer new mountain tops and not let the past glories be the highest point in the company’s history.

Pursuing moon shots and pushing a company to its limit is admirable and often leads to innovative new ideas. Nonetheless, sacrificing the brand or the culture and the people of the company in the process is not sustainable in the long run. It needs exceptional skill to balance the pursuit of moon shots and long-term sustainability.

Lack of Creativity and Bob Iger’s First Big Move

As animation goes, so goes the company.

Bob Iger was working for The Walt Disney Company since 1996 before he became CEO and was quite familiar with its history. He recognized that the company’s performance was tightly bound to the animation industry and its ability to create great animated films. In his own words to his board “as Animation goes, so goes the company.”

In the era from the ‘20s to the ‘40s and the success of movies like “Snow White and the Seven Dwarves,” “Pinocchio,” “Dumbo,” “Cinderella,” and all those great animated movies that Walt Disney built, the company prospered. Even later on, in the Disney Renaissance period when Michael Eisner had taken over the company, The Walt Disney Company created excellent animated films like “The Little Mermaid”, “Beauty and the Beast”, “Aladdin”, “The Lion King” that restore the company’s leadership role in the animation industry.

Nevertheless, when Bob Iger’s tenure started in 2005, he knew that Disney Animation was performing poorly and was overall in a bad shape for the last decade. He realized that Disney’s near future and his own as the head of The Walt Disney Company were hanging on his ability to revitalize the company’s animation productions.

Disney's Top Three Strategic Priorities

Bob Iger became the head of Disney with three clear priorities in mind. The first was the creation of exceptional branded content. His understanding of the market was that brand perception would guide people’s choices, so he had decided to invest most of the company’s capital on this.

His second priority was exploiting technological advancements to aid the creation of exceptional content and staying relevant in its distribution. He sensed that consumer behavior was changing, and he believed it was imperative to commit to the pursuit of technological innovations.

The third priority was international expansion. Disney was present in many markets but with superficial penetration. For example, China and India, two of the most populous countries in the world, were underutilized. He believed that the opportunity that was lurking in those markets was significant and Disney should tap into it.

His decision to rejuvenate the brand and Disney Animation was in complete alignment with his strategic priorities. The need for a solution to the creative stagnation of the company was urgent and echoed throughout all of its businesses.

The only source of talent and innovation

Iger quickly came to the conclusion that reviving Disney Animation meant finding the best, most talented animators and leaders in the industry. And so his gaze immediately turned to Pixar, the leading animation company of the time. On his second day as CEO, he presented his radical and, as time proved, outstanding idea of Disney acquiring Pixar.

The first and biggest challenge that Iger had to face before that idea could ever become a reality was the disdainful attitude towards Disney of Pixar’s controlling shareholder, Steve Jobs.

Pixar and Disney were already doing business together for some time with Disney co-funding, co-owning, marketing and distributing many of Pixar’s films. However, their partnership came to an abrupt halt due to numerous disputes in 2004. Steve Jobs concluded that Disney had become too process-oriented with excessive bureaucratic procedures and a lack of collaborative spirit.

Since all of the talent and leading creative minds in animation technology and storytelling were concentrated in Pixar, Jobs had all the leverage in negotiations.

Pixar’s invaluable assets and Bob Iger’s irresistible trait

Unexpectedly though, when Jobs forced Iger to share his “crazy idea” over the phone on a warm October evening, Iger’s sweaty proposition was met with recipience. When discussions on the matter started, Jobs brought forth his main concern and biggest fear: Disney would obliterate Pixar’s culture. He believed the creativity and innovation that Pixar had demonstrated over the years was attributed to its collaborative culture more than anything or anyone else.

Inside Pixar technology was inspiring new storytelling techniques and art was pushing the boundaries of technological possibilities. Those were cultural aspects unique to Pixar and, in Jobs' mind, what enabled the company to technologically and artistically pioneer in the animation industry

Thus, his primary goal during the negotiations was shielding Pixar’s culture from what he viewed as a destructive and sterile culture in Disney. Pixar was bringing such originality that each movie always seemed like a huge risk in terms of storytelling. Imagine pitching their movies, for example, a clownfish loses its father, and the father teams up with another fish that has memory problems to find his son. Not so inspiring.

In essence, nobody knew or could guarantee whether the next Pixar movie would be a massive success or a total flop. An aspect that made the investment extremely risky. Disney was conservative, and Jobs feared that Disney would prevent such risks and thus kill the innovative ideas that would come out of the Pixar movie.

On the other hand, Disney was in desperate need of new ideas, people brave enough to take risks, and the technology to bring those ideas to life. Iger needed to revitalize Disney Animation and the best people who could do that were Pixar’s visionary leaders John Lasseter and Ed Catmull.

It was Bob Iger’s uncommon career experiences that made the difference. Twice during his career, the company he was working for was acquired by another. First, it was ABC from Capital Cities, and the second was Capital Cities/ABC from Disney. This firsthand knowledge on the impact on the culture of a company that acquisitions bring and the candor that Steve Jobs and Bob Iger’s relationship was developed on allowed the latter to persuade the former that Pixar’s acquisition by Disney would leave its culture intact. And so it did.

On January 24, 2006, The Walt Disney Company bought Pixar Animation Studios for $7.4 billion and allowed the studio to create great films while its leaders refreshed Disney from the inside. Since then, Pixar has earned more than $11 billion at the global box office and even more through Disney’s other assets such as theme parks and physical products.

Key Takeaway #3: Crazy ideas need respect and candor to become reality

Pixar’s acquisition story reveals that every new and radical idea needs more than just determination and hard work to be realized. Bob Iger had clear strategic priorities when he became CEO, but also had the prudence to respect the unique cultural qualities of Pixar.

He was able to recognize that the value of Pixar was in its people and their ways of collaborating. The sincerity and openness that both Jobs and Iger demonstrated laid the grounds for fertile conversations which resulted in the merging of two companies and the birth of a new one that leveraged each other’s strong assets while mitigating their greatest vulnerabilities.

The Brand of Disney

One distinctive and powerful strategic move that Disney did from very early on, was to separate its brand from its marketing. Instead, it  made brand a strategy function , a decision that influenced the company’s trajectory immensely. The addressing of its brand as a strategic variable led to many of the competitive advantages that Disney achieved over the years.

The Walt Disney Company has evolved over the years, expanding its operations, but always remaining an entertainment and content producing company at its core. All of its expansive and evolutionary moves were successful only when they were aligned with its brand. Disney achieved a unifying approach to its brand experience that echoed through all of its core businesses.

Marvel acquisition

Disney’s vision is to become the preeminent leader of family entertainment. And this vision is reflected in its brand attributes. The promise that Disney makes to its customers is of a fun, magical experience that everybody in the family can enjoy. In Walt Disney’s own words: “I do not make films primarily for children. I make them for the child in all of us, whether he be six or sixty.”

This is the promise Disney strives to keep with all of its interactions with its customers. It promises to nudge and excite the child inside every person. And more often than not, it succeeds.

Indeed, whenever the idea of acquiring Marvel fell on the table (it did multiple times in different times in the company’s history), the main question that accompanied it was whether it would benefit the Disney brand. Did those two brands share enough attributes that it would make sense to merge them?

This was a tough question to answer, and before Bob Iger’s era, it had a negative answer. However, Iger thought differently. Consistent with his top priorities, he believed that Marvel could add extraordinary value content-wise to Disney. Although it is common knowledge today whether Marvel and Disney would be a successful pair, it was neither evident nor a certainty back then.

The storytelling opportunities that Disney observed and ultimately emerged through Marvel’s characters were unparalleled, despite having licensed many of them to other entities. As a result, its collection of over five thousand characters was a priceless treasure for the content-hungry company.

The overwhelming success of movies like “Captain Marvel” and “Black Panther” proved that not only were there a massive and starved audience for original storytelling, like female-led superhero movies and black superhero movies, but that, if done correctly, these films could be hugely profitable as well.

Disney is associated with joy and playfulness. Conflict still exists in Disney storytelling, but violence is something that only villains do and that with great restraint. Marvel’s storytelling, on the other hand, is centered around superheroes, and violence is a common occurrence. Acquiring Marvel and associating Disney with such themes could irreversibly damage the brand and distance people who expect their experience with Disney to be free of negative elements.

Upon closer inspection, Bob Iger and his team found out that the two brands shared many attributes in their storytelling and, if managed properly, they could coexist and blossom under one hood. This meant that Disney shouldn’t sanitize Marvel and decrease its brand value or betray its own brand value and take a more edgy path.

There was a great deal of risk involved in merging the two brands and by no means was its success assured. Finally, on December 31, 2009, Disney acquired Marvel for $4 billion and reinvented the film industry, and created another novel Disney experience.

Key Takeaway #4: Brand is a strategic function

Brand is usually ill-defined and thus crudely managed. The first mistake is considering it only as a concern of the marketing department. That’s a deadly mistake.

Brand should always be considered when developing a strategy. Every decision either adds or subtracts from your organization’s brand. The unfortunate trait of brand management is that it can effortlessly go wrong and cause lasting damage.

The fortunate trait of brand management is that it creates priceless opportunities and works as an exponential multiplier to every other aspect of the business if it is carefully handled and nurtured. From talent acquisition to customer satisfaction.

Disney’s Marketing Strategy: Innovating With Fans and Stories

Disney invests a lot of money and resources in marketing and advertising. Even though the company offers experiences for the whole family, it doesn’t target the whole family at the same time. Instead, it segments its target audience and uses different tactics.

For example, they promote new park rides to children to create demand (or indirect pressure on the parents), while at the same time promoting a limited time offer for the parents to create a sense of urgency.

At Disney, they have a plethora of channels to market their endless products and experiences, from social media accounts with millions of followers to television channels and radio. They strategically choose the content and the channel depending on the audience they wish to address and the feeling they wish to trigger.

The power of nostalgia

In the last decade, Disney has started capitalizing on nostalgia. It recognizes that their once upon a time young audience has now grown up, having its own kids and family. Parents remember the feelings of excitement and joy they experienced when they were watching Disney’s animation films as young children and want their kids to have the same experience.

Over the last years, Disney understands this and has proved it, developing live-action movies of their old and popular animation films targeting the parents more than the children. The success of that tactic is evident in movies like “The Lion King” which grossed over $1.5 million in 2019.

Technology today offers an unprecedented opportunity to remake old classics into live-action adaptations with stunning visuals and incredibly realistic CGIs. And Disney still has a lot of content in its library to use and exploit the feeling of nostalgia.

Retelling old stories and making monumental successes out of them is one of Disney’s magic recipes.

Disney’s digital marketing campaigns

Disney has a massive presence in social media, with countless accounts from its collection of brands. The number of followers across all platforms and accounts adds up to hundreds of millions.

That massive followership makes Disney’s presence a valuable asset to its advertising campaigns since it can inform and interact with its audience or make its announcements.

However, the incredible value from social media is generated by Disney’s fans. People love to share their experiences, findings, and stories on their social media profiles. At the time of this writing, #disney has over 80 million photos on Instagram, with the vast majority of them being fan-generated.

The company knows the power of its fans and doesn’t shy away from making full use of it. Disney always urges people to take photos or generate all kinds of content and share it in their personal social media profiles. It’s not unusual either to partner with celebrities and influencers to promote certain events or products or to simply drive engagement.

The #DreamBig campaign

In 2017, Disney partnered with 19 female photographers and the United Nations Foundation program “Girl Up” to launch the #DreamBigPrincess campaign. Its thematic purpose was to empower young girls to go after their dreams, no matter how big they are, by showcasing remarkable stories of girls and young women who achieved their dreams.

Disney highlighted the most powerful traits of its princesses, promoting the aspects that are making them worthy role models. The campaign was widely successful.

In just 5 days, Disney met its $1 million pledge of donation when the photos reached 1 million shares and the Girl Up program saw amazing growth and support.

Although Disney didn’t directly promote any of its products or movies, it certainly increased its brand awareness by associating it with a positive and inspiring message. It’s undeniable that many girls around the globe were meaningfully impacted by that campaign and attribute it to Disney.

Annual Campaigns

Disney never leaves a good anniversary or significant achievement to go to waste. Every year the company finds a reason to celebrate and promote its collection of brands.

In 2018, Disney celebrated its 100.000th wish granted in partnership with the Make-A-Wish Foundation by launching the digital campaign #ShareYourEars. It invited Disney fans to create and share pictures wearing their own, creative Mickey Mouse ears, donating $5 for each post to Make-A-Wish. Again, the response was excessive, motivating Disney to double its initial pledge to a $2 million donation.

The whole month of August 2020 was dedicated to Pixar, marking the 25th anniversary of Toy Story with Pixar Fest. The company released plenty of new content in the Disney+ platform including animator masterclasses and quizzes. It was, once more, in support of another charity: MediCinema.

We are sure that all kinds of plans are already brewing for the coming 100th birthday of the company in 2023.

How Disney products tell stories

One of Disney’s major revenue generators is its physical products. The company advertises its products in all the traditional ways that other companies do as well, but it has one enormously advantageous leverage.

Instead of building stories to surround its products and then try to sell them by promoting the stories, as most businesses do, its products sprung out of the stories. First comes the story and then the products.

The success of the story in the first place creates a healthy or sometimes overwhelming demand for physical products. Then, capitalizing on the popularity of the story, they supply their already pumped-up audience with their branded merchandise.

And they can charge a premium price for them. They’re not just selling toys; they are selling the opportunity to be part of the story, take the characters home, and relive their adventures with them. Again, they’re selling the Disney experience.

This reverse marketing has its risks, though. If the stories (read movies) are not so successful or cute characters feel forced, their merchandise sales take a serious toll.

For example, Star Wars had a huge boost in merchandise sales in 2015 due to the first movie's release after 10 years, but in the following years, the sales moved downwards. Disney’s failed attempt at a Star Wars spinoff movie seriously impacted its product sales.

Theme parks marketing

Disney is the theme park industry leader with a higher annual attendance than the next two corporations together. This is no small feat.

Disney’s theme park depends a lot on the attendance of the local population. For that reason, every new ride and show is heavily promoted in the local channels to attract repeat customers and offer them fresh experiences.

The company follows a different tactic to attract international visitors. Its marketing campaigns of the theme parks aim at placing them as ideal traveling or holiday destinations. They promise a novel, all-inclusive experience that provides solutions to almost any concern of the potential guests.

But advertising doesn’t stop once the guests enter the gates of a park. Every theme park experience is carefully designed to be immersive and urges the guests to make it memory tokens by taking pictures and videos and sharing them online.

Through the excitement and the joyful participation, Disney makes micro advocates of its brand out of its guests. Simply put, people love sharing and telling the world how awesome their Disney experience is. And Disney compels them to do it.

Key Takeaway #5: Engage your customers and develop meaningful relationships

All of Disney’s interactions with its customers aim at creating or enhancing the relationship between the brand and its customers.

Arguably, media and entertainment companies have more opportunities to engage and foster relationships with their customers. However, purposefully engaging with customers is imperative for every organization that wishes to have loyal and high-quality customers. Producing value and being relevant are today’s most important marketing traits.

Disney's innovation strategy and technological capabilities

Disney has entered, disrupted, and innovated in a number of industries. What is driving all of Disney’s innovative initiatives is its intense focus on the customer. It’s impossible to overstate this fact. Excelling at customer experience is what sets Disney apart.

Reinventing the cruise experience

When Disney decided to enter the cruise industry, few believed in its success. The truth is, to this day, Disney hasn’t achieved a penetration larger than 3% of that market. That’s a poor indicator of its influence. Since Disney entered the world of cruising, it has never been the same.

Disney took the traditional cruise experience and flipped it on its head. In what was a primarily adult-designed experience, Disney shifted its focus on the children. They made their ships particularly family-friendly.

Disney reinvented cruising by designing its ships from scratch. They don’t buy ships and remodel them to fit their standards; they build them from the beginning with their customers in mind.

The ingenuity that went into crafting the cruises was evident in two elements. The customer service and the ship design.

Disney achieved the impossible. It translated the theme park experience to the cruise experience. The company built rides inside the ship, shows, and performances and every single place had a theme attached to it. From pirate nights to Star Wars bars.

And the design is accommodative for the whole family. There are places exclusive to children and others exclusive to adults. Everything and everyone inside the ship aims at making life easier for the parents and joyful (and safe) for the kids.

Living inside the ship is beyond relaxing and comfortable, it’s a Disney adventure. Sometimes people choose not to go to the private islands that Disney has included in the cruise route, just to spend more time inside the ship. They made their ships the destination.

The influence that Disney has in the cruise industry is monumental.

Imagineers: Disney’s most important team

From the early days of the company, the founder established a team, called “Imagineers”. They were responsible for building and bringing the vision, dreams, and plans of Walt Disney and the company into the real world.

Behind the design of every theme park, ship, and attraction is this team. Today this team has evolved into the R&D department of The Walt Disney Company. Walt Disney's obsession with quality and exceptional customer service had spoiled the team, which never stayed within budget when it came to their projects.

This later led to complications and disputes within the company, contributing to its financial difficulties when Disney wasn’t performing well. Like every organization, Disney struggled to balance pursuing innovation and having efficient processes.

In all accounts, Disney's R&D arm is responsible for stacks of technological and design advancements throughout its history, helping the company to pioneer and stay ahead of its competition.

World-class analytics

Since well before 2000, Disney had established a world-class analytics department and in the following years kept investing in it, trying to take advantage of its capabilities as much as possible. The primal focus is the customer. Every analysis and insight aims at optimizing the customer experience and improving every single interaction with the brand.

The $1 billion solution

The problem today with companies is not gathering the data, but the analysis and use of it. Disney faced several problems early in the last decade, where guest satisfaction in its parks suffered due to high attendance. In the pursuit of a solution to numerous logistical problems, Imagineers came up with an innovative and widely applicable solution: the MagicBands.

Initially, a bracelet and recently redesigned to fit several other accessory roles, MagicBands include multiple functions that make the guests’ experience frictionless and playful. However, the easily noticeable improvements to customer service were only the tip of the iceberg of the invention’s efficacy. Its most meaningful impact was occurring behind the scenes.

With the data collected from the bands, Disney solved or improved countless operations and logistical nightmares, which impacted not only the cost of operations but guests’ experience as well. There was one advantage that Disney’s obsession with quality and creating an immersive experience made that investment payout so well. The sense of safety and lack of harmful, ill-intentioned situations within the parks.

People felt comfortable sharing their data within the park’s compounds and resorts, knowing they’re safe from all the negative exploitations and content that platforms like social media can’t mitigate.

Though the capabilities of smartphones quickly outmatched the technology of the MagicBands, Disney had developed elaborate systems and processes to track and analyze all kinds of data from them.

That way, it was relatively an easy matter to incorporate technological advancements into the company’s processes. The $1 billion investment in the development of the MagicBands enhances Disney’s data capabilities in the long term.

Key Takeaway #6: Hardcore customer-centric data analysis in the heart of modern innovation

Disney conquered and influenced a number of industries with its obsession with customer experience. It didn’t achieve that by passively brainstorming new ideas. Instead, it created outstanding analytics programs that connected all of its processes from customer knowledge to financial information.

Raw data is worthless if it can’t be analyzed or connected to the right information. A strong analytics department can lead to insights that create competitive advantages.

Disrupting Disney From Within: How Disney Developed The Best Streaming Services

Technological advances have profoundly impacted the media and entertainment industry. If companies are to survive the disruption, their leadership should always have their eyes on the future and the company's foot in it. That’s Bob Iger’s view.

Consequently, sensitivity to changes in an industry or consumer behavior becomes necessary. ESPN was the first to signal those disruptive effects to Disney, since people were finding alternative means of entertainment, affecting the business extensively. Cable television was dying, and ESPN was going down with it.

Disney’s leadership heard the signal loudly and clearly. Instead of just accepting the industry's changes and passively watching the decline of ESPN, Disney decided to ride the wave of disruption.

Acquiring the technology to go direct-to-consumer

After analyzing the scenery and the effects on their various businesses, the verdict inside Disney was unanimous: they had to pivot early and quickly. So, they swiftly forged a direct-to-consumer strategy.

Since time was of the essence, they couldn’t afford to build from scratch a technology platform to take advantage of the changes in consumer behavior.

So Disney started examining potential acquisitions. Twitter ended up drawing their interest, and if it wasn’t for Bob Iger’s last-minute change of heart, there might have been a multi-billion Disney-Twitter deal. But Iger was deeply concerned about the damage of Disney’s brand from the challenges that Twitter would bring along, like handling hate and uncivil speech, rage, issues with freedom of speech, and generally all the negative aspects of a social platform that families – or anyone in that matter - should never have to put up with.

Instead, in August 2016, The Walt Disney Company acquired BAMTech for $1 billion, and the next year, Disney raised its stake to a controlling 75% with an additional $1.58 billion. BAMTech had developed a user-friendly streaming technology that offered a great opportunity to monetize the content and create a valuable relationship between Disney and its audience.

The approach to delivering their content in a direct-to-consumer manner wasn’t limited to ESPN. Disney decided to turn the whole company towards the direction of over-the-top services going beyond their established ways of content distribution.

Out of that decision, ESPN+ and Disney+ were born with the latter being a platform that utilizes and delivers the content of all the major brands that Disney owns: Marvel, Pixar, Star Wars, National Geographic, and of course Disney.

Internal disruption: Innovation isn’t cheap

Investing in those new services meant sacrificing significant short-term capital. For example, to be competitive in the streaming industry, Disney, like any other player, needed exclusive and original content in its platform. Over the years, Disney and its collection of brands had developed an abundance of high-quality content that was distributed mostly through third parties, like Netflix. Pulling out Disney’s content - so the company could distribute it itself - and breaking up the contracts entailed fees worth hundreds of millions of dollars.

In addition, the company had great creative potential that Iger wanted to tap into with the purpose of generating original content specifically tailored to the newborn distribution platform. He simply didn’t want to hire external production or create another studio to populate the platform. He had complete confidence in the existing studios and their abilities to deliver content with specific specifications. They had been successful after all in the traditional ways of content creation.

However, his ambitious approach put a significant strain on the studios and its senior executives. They essentially had to juggle new responsibilities and divert a significant part of their attention and resources from their currently successful businesses to meet the demands and goals of the Disney+ project.

They were competitive people with sometimes unaligned interests and were asked to put aside politics and work together for the success of the company. To avoid failure and also to impose a sense of urgency, Iger had to restructure the internal incentive and rewarding system to align it with the company’s priorities.

Innovation requires sacrificing short-term profits to potentially build a future strategic advantage.

Current status of Disney’s streaming services

Disney has caught on with the notion that people are enjoying the control that the new streaming services are offering. They can decide for themselves not only what they are going to consume, but also the time and the place they do it. And Disney is determined to offer the best solutions on the matter.

Even though ESPN+ isn’t contributing directly to the company's international expansion, it is once again highly profitable with over 12 million US subscribers in early 2021. On the contrary, Disney+ is currently available in over 50 countries with plans to expand by the end of the year (2021). By 2023 it is estimated that Disney’s international streaming service will go toe to toe with Netflix, having already exceeded the 100 million subscribers mark. Hulu, the third streaming service of Disney after the acquisition of 21st Century Fox, is available in the US and Japan, reaching nearly 40 million subscribers.

Key Takeaway #7: Don’t fight disruption, embrace and ride it fast.

Leaders should always develop a futuristic approach when considering their strategy. Having open and sensitive channels permits early detection of disruptive tendencies within their industry. Once those tendencies have been detected, it takes great courage to accept them and leave behind the old ways of doing business.

However, those who take advantage of the opportunity and flex reap great rewards, and those who don’t get to watch their business slowly die out.

People Appreciate Breaking the Status Quo the Right Way

The Walt Disney Company includes a tremendously diverse bundle of businesses, so it makes it hard or, more accurately, pointless to try and define one specific audience that Disney is targeting throughout its businesses. Maybe the best (or frankly the only) term we can use to approximate it is “families”. “Families” in the broadest possible definition of the word and beyond.

What is making Disney uniquely appealing is the remarkable trait of its products to be enjoyed by almost the whole range of ages. Its animation movies may be targeting young children, but they are far from a drag for their parents to watch them together – at least for the first couple of times, after the 100th, it becomes unbearable.

Disney University

Disney takes the training of its employees very seriously. From very early on, Disney realized that the first and biggest champions of their brand should be the people working for it. The first Disney University was created in 1962 at Disneyland to train new employees and with an extensive preparation process to introduce them to the Disney culture, its ways and traditions, and the communication and collaboration practices of the park.

A fun fact about Disney is that the company doesn’t refer to its park’s employees as employees, instead, they are called “Cast Members” that wear “costumes” instead of uniforms and entertain “guests” instead of visitors.

This reinforces the idea that cast members are entering a stage when they come out and perform their roles. That way the magical experience that guests are invited to have is deeply immersive and exciting.

Since 1962, Disney has opened several facilities near its biggest theme parks with the same name and purpose while expanding its activities digitally with online courses. However, there is one common experience that every cast member goes through on their first day of work called “Traditions”.

The class is a welcoming ceremony and highly emotional, where new cast members learn about the legacy of Disney and their responsibility towards it. In just a few hours, they get the first real glimpse behind the scenes, are inspired, surprised, and taught about the new culture they are becoming a part of.

People working in Disney have many opportunities to get training and propel their careers forward. Even though Disney University is not an accredited institution, it includes highly valuable courses that experienced professionals teach.

Hiring, Diversity & Inclusion

Disney has a variety of programs and processes when it comes to hiring new people or offering internships. However, because of its massive size and diverse segments, the company has created a  website  to guide, inform and facilitate the process.

Over the last few years, Disney has demonstrated an impressive attempt to create products and tell stories that accurately represent the vastly diverse human world. This is evident in Disney’s storytelling, where fresh, inspiring, and modern messages are depicted and inside their culture.

Inside the company, there is a growing intention of leveraging the reach of the brand by welcoming and including people with various backgrounds and cultural traits. They make public statements of their support of communities like LGBTQ, offer internal cross-cultural mentoring, and take important initiatives.

For example, since 2012, Disney has established a program called “Heroes Work Here” dedicated to offer opportunities and help their reentrance to the society of returning veterans.

Another display of the company’s commitment to the promotion of aspirational themes and underrepresented or even forgotten communities, Disney+ has inserted advisories to certain titles that appear before them. The message is shown below

Although Disney has still a long way to go to become a brand and company reflective of humanity's multilateral and terrifyingly flavor-rich realm, it has displayed serious effort to advance in that direction.

Key Takeaway #8: Honoring the responsibility of international brands means focusing on the people

Disney recognizes its ability and responsibility to shape cultures and opinions and has started taking them seriously and handling them with great maturity. It’s not easy to transform an organization the size of Disney and make it an exemplary brand, yet they are determined to pursue it actively.

Maybe the company’s nature and size enable this process or maybe not. But, the truth is that seeing this honest and efficacious attempt to tackle important issues and provide a serious focus on people and culture has an inspiring effect. It sends the message that inclusion is possible and the differences that people bring into the room are not obstacles to overcome, but rather blessings that, if utilized, introduces precious qualities that can’t be bought another way.

Final Thoughts and Key Takeaways

Disney is a multifaceted corporation. It offers unique experiences and stories. It is a very rare kind of organization, because of the strong correlation between its segments. Its separate business influences the other and works as a multiplier. The brand equity of The Walt Disney Company increases the aggregated value of its part, making it significantly more than their sum.

Recap: Growth by the numbers

The ultimate list of strategic takeaways:.

Though few companies have the diverse assets of Disney, there are still many tactics and strategies that can be adopted by studying the company.

• A clear vision drives perseverance and innovation
• There is such a thing as going too fast
• Crazy ideas need respect and candor to become reality
• Brand is a strategic function
• Engage your customers and develop meaningful relationships
• Hardcore customer-centric data analysis in the heart of modern innovation
• Don’t fight disruption; embrace and ride it fast.
• Honoring the responsibility of international brands means focusing on the people

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Disney & Pixar Acquisition: Case Analysis

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This essay reads Pixar’s ecocatastrophe narrative WALL-E (2008) as an extended meditation on the spatial and economic character of the brand. At once an allegory for Pixar’s corporate history and brand identity, WALL-E also registers concern about the economic configuration of brand value itself---namely by foregrounding the relation between the fictional megabrand Buy n Large’s immaterial assets and their material contexts. Appearing in theaters on the eve of the 2008 financial crisis that would make clear a disjunction between physical assets (like homes) and the market for intangibles (like derivatives) with which they were becoming increasingly bound up, WALL-E aims in part to assess imminent crises both economic and ecological by linking BnL's productless information economy aboard the starship Axiom to the concrete, devastated infrastructures on Earth that underwrite this economy. But the film also invokes, in symptomatic fashion, the reparative de- and re-materializing value of Pixar’s “responsible” managerial capital---namely by modeling Pixar’s brand equity as a species of value that exists beyond material reality yet retains the power to withstand---and even recuperate---material losses. I supplement the essay with readings of Apple’s 2014 Environmental Responsibility Campaign, “Better,” as well as signature “green” architectural projects commissioned by Silicon Valley tech giants including Apple, Facebook, Google, and Amazon, to argue that these artifacts, too, bear the brand’s imprint as a core mode of production within the new economies, encoding visions of value accumulating within closed, “responsible” economies of immaterial labor, barred from and seemingly impervious to material circumstance.

Case overview –This case contains detailed information about Walt Disney Co. that gives knowledge about its business environment, acquisitions & merger, market position & company performance. This study traces the reporting of the financial performance in Walt Disney as compared to the industry. Walt Disney was established in 1923 with a small sketch but now it is a giant as well as the market leader. Walt Disney is a market leader for a long time and is operating efficiently in the market. This case study illustrates its financial performance by comparing its financial data from 1999 to 2013. The company is growing year over year through acquisitions and mergers with the other firms. The company’s performance has been analyzed through various analysis and financial techniques to elaborate the actual financial condition of the company. The experiences gained from the current study will serve the businesses in entertainment industry through providing help full insights for the tactful strategies & elimination of financial risks. The unique analysis of the market helps to manage business environment. Also play a significant role in the development of a theoretical base for further research studies in the field of finance as well as for learning purposes. Expected learning outcomes – The objective of this case study is to demonstrate the critical success factors particularly in financial terms which provides a solid base for a business group to sustain its competitive position & market leader in the industry. The readers are expected to get numerous benefits from this case study. Like an understanding of calculation & interpretation of basis financial ratios & its implications for investors, creditors & financial managers which strengthen their decision making, and it also help researchers who keen about this industry, significance of various financial analyses for a business organization. Keywords: Walt Disney, Entertainment Diversified Industry, Financial Ratio analysis

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Strategy & Execution

The Walt Disney Company and Pixar, Inc.: To Acquire or Not to Acquire?

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Publication Date: March 02, 2009

Source: Harvard Business School

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?

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Disney Pixar Case Study: Creativity and Efficiency

This article is an excerpt from the Shortform book guide to "Creativity, Inc." by Ed Catmull. Shortform has the world's best summaries and analyses of books you should be reading.

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Are you looking for a Disney Pixar case study? How was Ed Catmull able to apply his management strategies from Pixar to Disney Animation Studios?

After being an independent company for 20 years, Pixar was sold to Disney. This Disney Pixar case study explores how the Pixar management strategies helped revive the flailing Disney Animation Studios.

Keep reading for a Disney Pixar case study.

Disney Pixar Case Study: Background

In 2005, Jobs told Catmull and Lasseter that he was considering selling Pixar to Disney. This shocked the Pixar leaders because, at the time, Pixar and Disney had hit a rough patch. However, leadership at Disney had recently changed, and the new CEO, Bob Iger, wanted to bring Pixar back into the fold. Disney Animation had been struggling for years, and Iger believed that Catmull and Lasseter could reinvigorate the organization by leading both Pixar and Disney Animation. Iger assured them that Pixar would maintain its autonomy and its company culture .

Ultimately, Jobs gave the decision to Catmull and Lasseter. During negotiations, Catmull drafted a lengthy list of demands that ensured Pixar’s culture wouldn’t be impacted after being bought by a massive entertainment studio such as Disney. These demands ranged from keeping a “no assigned parking” rule to ensuring that Pixar leadership could still distribute bonuses following box office success. In addition to these demands, Catmull insisted that Pixar remain separate from Disney Animation Studios with each company working on their own projects. Once these safeguards were established, Catmull and Lasseter agreed to sell Pixar to Disney.

Reviving Disney Animation Studios

Prior to the Disney/Pixar merger, Disney Animation had been struggling to create new and innovative works. Following the Disney Renaissance of the 1990s, the studio had failed to produce a critically and commercially successful film. Where they had once produced classics such as The Lion King or Beauty and the Beast , their recent output had been critical duds such as Chicken Little and Brother Bear . While these films had some merits, they were nowhere nearly as universally beloved as their predecessors.

The Problems in the Disney Pixar Case Study

Once the merger went through, Catmull immediately began his tenure as the president of both Disney Animation Studios and Pixar. When he arrived at Disney, he saw a number of alarming problems that stifled the studio’s ability to create innovative films:

• A lack of personality. On his first tour of the building, Catmull noticed the sterile environment of the office space. Desks were empty and the walls were barren. The lack of creativity in the space reflected the lack of creativity in Disney’s recent animated films.
• Ineffective floorplans. Disney Animation’s studios were spread out over four floors with teams being floors away from one another. This made it difficult for teams to quickly communicate and removed any impetus to check in on colleagues. Also, the offices for studio leaders were far away from everyone else and had an elitist design with multiple secretary desks and doors. This “executive suite” made it challenging and intimidating for any employee to approach an executive or high-level manager.
• Fear of candidness. Previous leadership at Disney Animation didn’t allow for failure or open feedback. If someone’s idea failed or they openly disagreed with a manager or leader, their job would be on the line. This created constant fear that stifled creative impulses and caused the production of uninspired work.
• No collaborative feedback system. Before Catmull arrived at Disney, teams were given feedback in the form of checklists from three different sources: the studio’s development department, the studio head, and Disney’s former CEO, Michael Eisner. These notes were mandatory and left no room for collaboration. They were also often conflicting, which left creative teams in a tricky situation when trying to implement the feedback. While the teams had developed an unofficial internal feedback system called Story Trusts, the process lacked the structure and management to be effective.
• Unwillingness to change. Though many were open and excited about the new leadership, some high-ranking members of Disney’s studio weren’t thrilled about the new direction. They believed that their system was working, and that they were on the verge of a breakthrough when Iger pulled the plug.

The Solutions in the Disney Pixar Case Study

While Catmull insisted that he didn’t want Disney to become a clone of Pixar, he recognized that the core values of the company were universal. With this in mind, Catmull immediately started making changes:

• He championed individuality. Artists need the room and freedom to express themselves. It helps them feel comfortable in their environment and be more original in their work. At Pixar, employees would make elaborate designs and environments in their cubicles and offices. Catmull brought this same creative freedom to Disney. 
• He redesigned the workplace. Catmull promoted interactivity and collaboration by moving departments so certain teams could be closer together, and he created communal environments where teams could relax and talk with other colleagues. He also moved his and Lasseter’s offices to the middle of the main floor to show that anyone could talk to them at any time.
• He promoted candidness. Catmull insisted that employees could be candid without the fear of retaliation. This was challenging because many of the Disney employees had been told for years that their opinions held no value and expressing them could actually hurt them. Catmull held multiple meetings with creatives and explained the importance of candidness. While it took some time, the Disney team eventually embraced this concept.
• He helped develop Story Trusts. Catmull invited various Disney employees to fly out to Pixar’s studios and observe a Braintrust meeting. Using this information, the Disney team worked with Catmull to develop Story Trusts into a similar feedback mechanism. While Story Trusts did have their own unique elements, the core purpose of delivering candid feedback in a structured setting helped boost the quality of Disney’s future films.
• He removed those unwilling to change. While most employees were retained after the merger, those who refused to make changes were let go. Catmull found the people who he believed were ready and willing to make the necessary adjustments to move the studio forward. 

After implementing changes within Disney, the studio’s work began to improve . In fact, one of the first films under Catmull, Bolt , received an Oscar nomination. This sudden surge of success proved that the Catmull’s concepts could be effectively applied to another creative organization to boost their efficiency and creativity. The Disney Pixar case study shows that Catmull’s principles and results could be replicated.

Shortform Section: Critical Trends in Disney Animation Studios’ Films

Beyond the Disney Pixar case study, there’s important context to know about how Disney Animation Studios was performing. For reference, from 2000-2005, Disney Animation Studios’ theatrical releases had an average score of less than 70% on Rotten Tomatoes. Comparatively, between 2007-2019 (after Catmull had taken over and changed the culture at the studio), almost none of their films dropped below an 85% on Rotten Tomatoes (with the exceptions of Frozen II and Meet the Robinsons ). The changes at Disney allowed for creative collaboration and open feedback. As a result, the critical reception of their films started to improve.

(For more information on how Rotten Tomatoes determines their scores, click here .)

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• How Pixar went from selling computers to successful animation studio
• What it takes to build a creative workplace culture
• Why George Lucas sold Pixar to Steve Jobs
• ← Design in the Real World: Make it for Real People
• Leaving the Rat Race: Practical Advice for Liberation →

An avid reader for as long as she can remember, Rina’s love for books began with The Boxcar Children. Her penchant for always having a book nearby has never faded, though her reading tastes have since evolved. Rina reads around 100 books every year, with a fairly even split between fiction and non-fiction. Her favorite genres are memoirs, public health, and locked room mysteries. As an attorney, Rina can’t help analyzing and deconstructing arguments in any book she reads.

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