The Walt Disney Company and Pixar, Inc.: To Acquire or Not to Acquire Student’s Name Institutional Affiliation The Walt Disney Company and Pixar, Inc.: To Acquire or Not to Acquire Part 1 Walt Disney Company has experienced various strategic issues. One of the issues is that the company has lost a significant percentage of itsRead more about We can work on The Walt Disney Company and Pixar, Inc.: To Acquire or Not to Acquire Student’s Name Institutional Affiliation The Walt Disney Company and Pixar, Inc.: To Acquire or Not to Acquire Part 1 Walt Disney Company has experienced various strategic issues. One of the issues is that the company has lost a significant percentage of its subscribers in the “Entertainment and Sports Programming Network (ESPN).” Currently, the company’s ESPN has few consumers compared to previous years. The primary reason why consumers have shifted from ESPN is the emergence of less expensive internet platforms (Alcacer et al., 2019). Before, customers watched sports with Disney, but currently, they can watch video sports using cheaper internet platforms. Over the years, the market position of Walt Disney had been high. The high market position was obtained through the company’s appeal to customers by charging low prices. People, especially young adults, prefer watching sports and as a result, they invest most of their time in viewing sports, which means that they cannot pay higher prices for internet platforms that provide sports videos. The causes of issues faced by the company include resources and market factors. Company resources include both physical and human resources. Human resources consist of brand names and intellectual capital, while physical resources include distribution networks and plants (Dyer et al., 2019). In this case, although Disney Company has advanced technologically, its “ESPN” brand name has caused customers leave the platform because of the increased charges. Regarding market factors, Alcacer et al. (2019) affirm that, ESPN has caused Walt Disney Company to experienced intense competition from its rivals. The company primarily deals with entertainment, which focuses on the tastes and preferences of consumers. The fierce competition has caused a reduction in the company’s revenue. Besides, the management of the company does not aim at the deliberate approaches of meeting consumer demands. Consequently, the company has been criticized whenever it releases new sports videos in the market. Walt Disney has not been able to attract new consumers and, therefore, it has been a challenge for the company to enhance an excellent market position by concentrating on the customer’s preferences and tastes. Walt Disney Company can address strategic issues by realizing the best action. For instance, analyzing the company’s value chain will help in achieving its operational goals and strategy. Although the company lost its ESPN platform, it can create synergies by customizing and combining resources with another company. For instance, if Disney acquires Pixar, the independency or resource combination will enable Disney Firm to increase its profits. Moreover, the company can change its operations to sustain quality and decrease prices. Lowering prices and sustaining the quality of services offered will help in maintaining the current consumers, and restore the customers lost by the company to its rivals. Furthermore, the company can focus on dealing with educative and motivational films, because customers do not criticize educative products and will remain attentive to educational films concerned with their social and business lives. Part 2 Should Disney Pursue the Acquisition of Pixar? Dyer et al. (2019) speculate that, companies perceive alliances and acquisitions as strategies that spur growth. However, alliances and acquisitions strategies have unique disadvantages and advantages. Companies that ignore the differences, risk in purchasing firms they should have allied, or allying enterprises they should have bought. For that reason, it is imperative for a company to acknowledge when to use the ally and acquire strategies. For instance, if a company desires to generate collaborations by integrating its efforts and another firm’s efforts, it should ally with the firm. However, if the said company seeks to combine production plants to acquire synergies, the company should purchase the firm to regulate economies of scale. .For example, Disney Company requires physical resources such as animation. Animation is essential to the corporate strategy of Disney Company, since the characters from Disney’s animated films increase company sales. In 2012, the aggregate revenue of Disney Company was composed of human and physical resources such as resorts, parks, internet, consumer products, studio entertainment, and media networks (Dyer et al., 2019). Therefore, revenue will increase highly if Disney acquires Pixar. Although Disney Company will experience a financial risk amounting to $7.4 billion, the amount is not small for the company. Also, the acquisition will result in overlapping and overstaffing of businesses and sectors. For example, the businesses and sectors of Pixar Company are similar to those of Disney, which could cause a substantial reduction in profit and a rise in workforce cost. Consequently, the acquisition will be influenced by market factors. For example, it will cause an increase in competition, because of increased advancements of the techniques used by the companies rivals (Alcacer et al., 2019). As a result, the Company can acquire synergies by retaining significant employees and motivating them to be more productive. The company should focus on solving the stability problems of the acquired company by creating adequate space for employees’ improvement. Moreover, Disney Company should adjust salaries and awards adequately, and ensure that the leading technology and creativity talents remain locked in the combined syndicate. Also, the company should focus on avoiding unmerited expenditures caused by certain behaviors and overlapping of departments. The new company will generate innovative ideas and reduce its operational cost. Acquiring the Pixar Company will increase Disney’s market power. Pixar Company has ten years of registered animation technology, which cannot be purchased by other companies. Furthermore, the total box of Pixar doubles that of Disney, indicating that acquisition will enable Disney to have a stronger market power (Alcacer et al., 2019). Furthermore, the quality standard, creativity, and 3-D technology of Pixar Company will enable Disney to increase its diversification and reduce its operational costs. The acquisition will help the two companies to establish mutual goals through excellent communication by retaining the creativity and unique features of the acquired company. References Alcacer, J., Collis, D., & Furey, M. (2019). The Walt Disney Company And Pixar Inc.: To Acquire of Not to Acquire. Harvard Business School. Dyer, J., Kale, P., & Singh, H. (2019). When to Ally and When to Acquire. Harvard Business Review.[…]