Disney Pixar

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This case study primarily deals with three main issues. The first issue this study addresses is the strategies (Vertical integration/outsourcing) of Disney and Pixar. Secondly, the contractual agreements between Disney and Pixar will be discussed. Lastly, the variation in the organizational culture of both companies will be considered in this case study. Walt Disney’s’ first feature animation was in 1934 with the production of Snow White and the Seven Dwarfs. Profits in this industry were not just from proceeds made by movie theatres, but also proceeds from sales in home videos, television, licensing agreements, merchandising and children’s toys. Since then, Disney struggled in the animated industry and did not find success again until the 1980’s and 90’s. The renewed success came with the production of The Little Mermaid, Beauty and the Beast, and the Lion King. Disney’s success was largely attributed to two CEOs, Michael Eisner and Chairman Jeffery Katzenberg. Michael Eisner had an openly collaborative environment management style. Eisner’s management style allowed employees to present story ideas to upper management three times a year to be rated. Eisner promoted these winners with bonuses, higher wages and responsibilities. Only concerned with success, Katzenberg was known as a driven and passionate employee. Katzenberg ensured morale resonance in story line by going through every detail of production after a story was awarded to an employee. The success in the animated industry from this alliance eventually led to the corporation’s downfall. By the beginning of the year 2000, animated movies within Disney were grossly overstaffed, overpaid, disorganized and had long production time frames. Production of computer generated animated movies proved to be less time consuming and less labor intensive. In 1991, Pixar signed a contract with Disney for the production of three computer generated animated movies. In this contract, Disney agreed to...
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