Evaluating The Acquisition Strategy Of Walt Disney (The Corporation That Has Acquired Another Company) When It Acquired Pixar Essay Sample
Assignment 4: Merger, Acquisition, and International Strategies
The merger chosen for this research is the acquisition of Pixar by Walt Disney. The company named Disney holds a very impressive history within the entertainment segment, stretching over the period of more than 75 years (Walt Disney, 2015). The company was initiated in the year 1923 as a mutual project of Walt Disney as well as his brother, Roy (Walt Disney, 2015). Ever since the time of its creation, the Walt Disney organization along with its allied organizations have remained truthful to their promise to create unmatched entertainment experiences grounded on the well-off inheritance of excellent imaginative content and outstanding storytelling. Moreover, the organization with its subsidiaries as well as associates is considered to be a chief expanded international family amusement and media company (Walt Disney, 2015). It includes four business sectors namely; media networks, studio entertainment, parks and resorts and customers goods (Walt Disney, 2015).
This merger amid Pixar and Disney was a highly successful one. They operated jointly during the past and their agreement was running out subsequent to the launch of Cars. This was seen as being a great chance and rational move for both Pixar and Disney to merge. The merger allowed the corporations to operate together easily. This merger was highly rewarding making possible for the corporation to launch highly successful movies like Bolt and WALL-E. Both companies hold high expectations taking in plans for twice-annually films. This wasn’t possible prior to the merger. Moreover, Disney has been capable of giving Pixar an enhancement within the sphere of advertising, merchandising and marketing plugs. Disney is recognized as being the best within the segment in terms of marketing to children.
Disney made public in 2006 that it had made a decisions to purchase Pixar for around $7.4 billion in an all-stock agreement. The deal catapulted Steve Jobs, who was Pixar’s chief shareholder having around 50.1 percent, to Disney's leading individual shareholder with 7 percent and a fresh position on its directors board. The new Disney holdings of Jobs surpassed holdings of previous CEO Michael Eisner, the preceding leading shareholder, who still possessed 1.7 percent; and Director of Disney i.e. Emeritus Roy E. Disney, who possessed around 1 percent of the company’s shares. Pixar shareholders gained 2.3 shares of Disney’s common stock for every portion of common stock redeemed of Pixar. Disney spent about 7.4 billion dollars for acquiring Pixar from the head of Apple i.e. Steve Jobs (Monica, 2006). The approach following this merger is chiefly to persist developing innovative stories, films and characters that attract viewers all over the world (Monica, 2006). The acquisition enhanced Disney’s animation that has helped a lot in stimulating its growth all across its business units. This was undoubtedly a very smart strategic agreement, which certainly benefit Disney’s theme parks, cable and consumer products in long run. Also, Disney attained ownership of the globe’s highly known computer animation studio as well as its resources. They also hold a sound relationship with Apple’s expertise due to Steve Jobs directing Pixar.
Identifying a profitable candidate for Target (the corporation that has not been involved in any mergers or acquisition) to acquire
A corporation chosen which functions solely within the United States and has not been involved in any mergers or acquisitions is Target Corporation. Target is basically an American retailing corporation, which functions out of Minneapolis (Minnesota) (Target, 2015). The company is also regarded as being the second biggest discount retailer within the US. The mission of the company is to make Target the favoured shopping destination within every channel through delivering exceptional value, incessant innovation and outstanding guest experiences through constantly satisfying Expect More (Target, 2015). Target was established during the year 1902, with its head office located within Minneapolis, Minnesota (Target, 2015). The corporation was also ranked 36th on the Fortune 500 in 2013 and is a constituent of Standard & Poor's 500 index. The “Bulls eye” trademark of Target is licensed to Wesfarmers (Target, 2015). The foremost Target outlet was set up during the year 1962 within Roseville, Minnesota. Target expanded and ultimately turned out to be the leading unit of Dayton Hudson Company. Target runs more than 1,934 outlets within the US (Target, 2015).
A possible and beneficial acquisition for Target would be Best Buy. Best Buy has been fighting quite hard lately and has principally turned out to be a showroom for products, which individuals would go elsewhere to buy at a lesser cost. Best Buy is facing challenges for its lack of diversity and customers would instead buy from stores like Wal-Mart and Target. Target could also gain advantage from this merger through taking on brand presence as well as experience of Best Buy in selling appliances and electronics. Best Buy at present runs several outlets, and is in high requirement of a powerful existence online and holds a dwindling position of serving its buyers (Best Buy, 2015). It would prove to be a sound proposal for Target to redesign its electronics segments into Best Buy mini-outlets and make use of its abilities in consumer service for strengthening these divisions (Retailgeek, 2012).
In addition, replacing Best Buy bigger outlets to smaller Best Buy locations within smaller towns and strategic regions having the support of a powerful Target could prove to be highly advantageous. Target could also make use of Best Buy’s leading possession Geek Squad. Moreover, Geek Squad being obtainable within Target outlets for dealing with consumer issues could be a big addition for this company. Also, they could enlarge on the brand of Geek Squad and make available in-home facilities for several products, which are being offered (Best Buy, 2015). The important factor for ensuring that this merger works would be creating a powerful retail presence in competition to rival Amazon.
Target could also provide buyers the chance to purchase products online and if required, for returning they could simple just bring it back to the outlet. In flourishing mergers both corporations would require integrating its corporate frameworks. They hold a benefit in this case due to the reason that both Best Buy and Target headquarters are situated within Minnesota. Regional cultures and distances could be the possible issues in this merger however this could be prevented due to their close distance. Further, this would trim down the issues that this merger would involve. The proposal of taking over Best Buy could perhaps boost Target and take it to the next level in case if they are capable of executing and providing an effective transition into one corporation and develop its abilities.
Evaluating the international business-level strategy and international corporate-level strategy for corporation that operates internationally and make recommendations for improvement
The corporation’s worldwide strategy is expanding its business through way of tapping into different possessions of the Walt Disney Company along with its subsidiaries and also, developing fresh content with actual video game intellectual possession (Walt Disney, 2015). Also, its approach is to persist, its wealth running via renowned branded books for making video games, movies and television shows. Moreover, the company has developed “centers of creative brilliance” within chief regions all over the world for attracting superior quality entertainment content as well as talent (Walt Disney, 2015). Additionally, Disney offers employment prospects to over 700 staff members within chief markets across the globe taking in the UK, France, Japan, Germany, Asia and lastly, Latin America (Walt Disney, 2015).
Disney puts in high efforts and resources at research and development for gaining knowledge about its target marketplace offering them the chance for growing on a worldwide level. The company also tries to stay latest with the technique, which kids utilize, the kind of shows they prefer watching, and the way they integrate technology within their lives. A good example of this is the way how Disney provides discounts on Facebook and Twitter. Disney is also familiar with the fact that a number of individuals do not hold the chance of coming to the US for visiting Disney Land or Disney World (Walt Disney, 2015). For this reason, the company made a decision to build theme parks across the globe for serving all people. Every Disney Park is adapted to the home cultures.
The Corporate level strategy of Disney chiefly revolves around branding. The Company has been divided into several brand extensions, segments and co-brands. Primarily, the Walt Disney Motion Pictures Unit functions as its individual brand together with a number of extensions taking in Walt Disney Pictures and Television, Pixar Animation Studios and Miramax Films. Further, the Disney television unit runs ABC News, ESPN, Disney Channels etc. However, Interactive advertising is managed through Disney Interactive Media unit and encompasses Disney.com, ESPN.com etc. Apart from this, leveraging brands within the theme park sector is considered to be very significant for grabbing hold of repeat business as well as new customers. Disneyland makes use of classic stories and fairytales from feature movies in order to catch the attention of the customers. A lot of their advertisements utilize well-known concepts like each and every girl desires to become a princess, so which character or princess is you? Lately the company’s advertising endeavours were directed towards celebration, inquiring the watchers "What would they celebrate?" Furthermore, the Company prolongs to bring into play its tradition as well as the characters with which people fell in love several years ago as their most important branding power and position.
Proposing one business-level strategy and one corporate-level strategy for corporation that does not operate internationally
In selecting an international business level strategy, Target needs to firstly devise domestic-market approaches. This is important for the reason that they might be capable of utilizing few of the abilities and key abilities it devised within its local marketplace like a basis for building upon within the international marketplaces. The international strategy best suitable for Target would be multi-domestic strategy. It’s a global strategy wherein operating as well as strategic decisions are decentralized to strategic business divisions within individual nations or areas for offering every unit the chance for tailoring products as per the domestic marketplace (Hitt, 2012). A multi-domestic strategy is basically an approach through which corporations try achieving utmost local reaction through customizing their product offering along with marketing strategy for matching diverse national situations (Hill. and Gareth, 2012).
Marketing, production and R&D practices are likely to be set up in every chief national marketplace where business is carried out. Further, an alternate application of the concept outlines the arrangement of multi-national companies. Multinational or International corporations attain economies of scale by way of joint overhead and advertise alike items within distinct nations (Hitt, 2012). Multi-domestic corporations hold separate head offices within distinct nations, thus gaining higher localized organization however at the greater expense of forgoing economies of scale from centralization and cost sharing.
The chief reason behind choosing this strategy is for Target to be successful globally the receptiveness of the domestic market must be really high. Target would be capable of implementing this approach in case if they lay emphasis upon customer needs and desires; competition; legal and political framework and lastly, the social standards of a specific marketplace. Every market would be distinct and Target would require placing emphasis upon marketplaces in every nation and concentrate on its competition along with the consumers wants. This would lead to Target having to modify its services and products for catering to global marketplaces. Multi-domestic approach expands company’s domestic marketplace share since they are capable of paying focus upon the domestic marketplace requirements (Hitt, 2012).
The corporate level strategy best suited for Target is value-creating strategy. The value-creating strategy is one where the company attempts edging out its rivals through attaining higher marketplace share (Hill. and Gareth, 2012). This strategy attempts to insert perceived and real value to the products of the company through exploiting economies of scope i.e. the abilities and resources of the company, which could be shared all through the company for reducing costs and perk up competence (Hill. and Gareth, 2012). A chief concept behind this approach is diversification: providing higher products to higher customers in the marketplace for dominating the overall marketplace share. Since Target would be new to international market, this strategy would help the company to form good presence and attain its share of the market.
Best Buy. (2015). Retrieved from http://www.bestbuy.com/
Davis, S. M. (2002). Brand asset management: How businesses can profit from the power of brand. Journal of Consumer Marketing, 19 (4)
Hill, C. and Gareth, J. (2012). Strategic Management Theory: An Integrated Approach. Cengage Learning,
Hitt, M. A. (2012). Strategic Management: Concepts and Cases. Mason: Cengage Learning.
Monica, P. R. (2006). Disney buys Pixar Retrieved from http://money.cnn.com/2006/01/24/news/companies/disney_pixar_deal/.
Retailgeek, (2012). Best Buy deploys QR codes to enhance shopping experience. Retrieved from http://retailgeek.com/best-buy-deploys-qr-codes-to-enhance-shopping- experience/
Target (2015). About Target Retrieved from https://corporate.target.com/about/history.
Walt Disney (2015). About Disney Retrieved from http://thewaltdisneycompany.com/.
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