Macro economis, micro economics, Disney and Pixar merger, merger, entertainment market, Disney, Pixar
A merger occurs when two or more organizations come together under common ownership. The benefits of mergers step from the concept of synergy which holds that when units are combined together greater value is achieved (Gaughan 2010, p. 132). The coming together of companies gives them the ability to exercise more control over product prices. Moreover, it helps in achieving economies of scale. Other organizations engage in mergers as a way of reducing competition intensity in the market while also reducing risk (Siebert 2005, p. 33). Since companies are hit differently by economic recession, mergers have become one of the main ways of reducing risks. This paper evaluates the advantages and the disadvantages of the Disney-Pixar merger.
[...] This created a new shift in the market with Disney and Pixar benefitting more. Conclusion The merger between Disney and Pixar is one of the most famous mergers that have taken place in the entertainment industry. The merger affected the two firms, the consumers and the general economy (Rajni & Preeti 2015, p. 342). Although several shortcomings may be associated with the merger, the advantages outweigh the disadvantages. Pixar, Disney, consumers and the economy have greatly benefited from the merger. [...]
[...] The profits from the films would be shared on a 50- 50 basis (Fried 2006). The merger between Disney and Pixar can be better evaluated by looking at its advantages and disadvantages with respect to the firms, the customers and the wider economy. Firms Disney Walt The Disney-Pixar merger benefited Disney in several ways. First, the merger also reduced the competition that Disney was facing in the market (Kuijper p. 129). Prior to the merger, Pixar and Disney belonged to different stages of one market (Rajni & Preeti 2015, p. [...]
[...] The company does not have to compete with Disney as they are now operating together. With the reduced competition, Pixar was able to focus more on its core strengths of creating computer animation. With Disney taking care of the production of home entertainment products, Pixar put its emphasis on computer animation and this eventually lead to increase productivity, high quality animation and more films (Hubbard, Garnett & Lewis p. 222). The decision by the two organizations to focus on their core areas to ensure better quality has had a negative consequence on the operations of Pixar. [...]
[...] The company did not have to compete with Disney as they are now operating together. Consequently, Pixar was able to focus more on its core strengths of creating computer animation. With Pixar concentrating on the creation of computer animations, the company has managed to come up with high quality products that meet the needs of the customers. Pixar technology and expertise in computer animation also helped improve the Disney Walt products. Thus, it increased the quality of entertainment products sold to the customers. [...]
[...] Since companies are hit differently by economic recession, mergers have become one of the main ways of reducing risks. This paper evaluates the advantages and the disadvantages of the Disney-Pixar merger. The Disney- Pixar Merge On 24th January 2006, Walt Disney made the decision to buy Pixar for $ 7.4 billion through an all-stock transaction deal (Fried 2006). Initially, the two firms operated as distinct entities in the entertainment market. Walt Disney is considered among the leading companies in the entertainments industry. [...]
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