Free Essay About Mergers And Acquisitions: Walt Disney And Pixar And Green Wood Publishing As A Potential Candidate For Abbeville Press.
Mergers and Acquisitions
Merger & Acquisition: Walt Disney and Pixar
The Walt Disney Company commonly referred to as Disney is an American multinational and also the second biggest television company of the world. The company was founded on October 16, 1923 by Walt Disney and Roy Disney (Walt Disney Company, 2015) To expand their operations they exercised the strategic option of diversifying their products and services by introducing innovative services and by acquiring companies having portfolio compatible with Walt Disney’s corporate goals. The strategic initiatives were motivated by their sole objective and that was to secure top position in the US television industry, movies and amusement parks (Ibid, 2015) Disney also owns ABC, a telecom company (Walt Disney Company, 2015). On the other hand, Pixar is an Animation studio that has won 26 Academy Awards, three Grammy awards alongside many other awards and acknowledgements. Pixar uses Render Man which is A-list software to give life to inanimate sketches and character. In 1979, Pixar began as a part of Lucas film, but was bought by Steve Jobs in 1986 (Pixar, 2015).
In 2006, The Walt Disney Company bought Pixar at $7.4 Billion. This exchange of money and shares also allowed Steve Jobs to exercise significant influence on Walt Disney because of having considerable stakes in the company as a result of its acquisition. Pixar received 2.3 of Disney’s shares for every one share of Pixar that went to Disney. This has diversified Walt Disney’s operations and increased its presence in other related sectors of the economy (Walt Disney Company, 2015). This merger proved to be beneficial to both firms because subsequent to this consolidated annual profit of approximately $8.9 billion for the year was reported. Walt Disney got the advantage of economies of extension as the aggregate expense for buying a business would reduce and decrease as they create a wide variety of products and services to achieve their corporate goals (Ibid, 2015)
Corporate and Business Level Strategies
The Walt Disney Company operates beyond border and is a highly successful business firm because of its effective corporate strategies and appropriate business strategies. The basic aim and objective of any business-level strategy is to ensure that a company attains its basic goals and keep its focus on satisfying the needs of all of its stakeholders but particularly in the interests of its shareholders without compromising on the customer’s requirements. The economies of scale that was achieved leveraged Walt Disney and enabled it to make profits and increase market share through enhanced services (Norton and Hughes, 2009). Business-level strategy also directs the actions needed to be taken to provide valuable customer service and to gain a competitive position in the industry by outperforming rivals and winning customer satisfaction. This can be done by performing better than competitors and importantly, by utilising and bringing into action all available resources in the most effective manner (Ibid, 2009).
The customers’ expectations and their required level of satisfaction form the basis of any business level strategy. Disney’s Business level strategy is customers oriented and focuses on the demographics and psychographics of the customers. Each Disney Park or movie is made by keeping in view the needs of the target audience by giving adequate attention to all customer preferences. For example when toy story was release, it elicited a great response from the audience, so Disney and Pixar made more parts in order to meet the demand and to keep the audience happy. Disney also keeps a strict check on the safety of the swings in all Disney parks thus delivering quality customer care and keeping the customers satisfied. Disney believes in strong leadership skills and also believes in making all the employees feel happy and satisfied at all times. The company has empowered all its SBUs managers to ensure effective decision making in the organisation and increasing employee morale (Norton and Hughes, 2009).
In order to make its employees feel happy, Disney uses its own exclusive terminology and words to refer to the people working there, for example they don’t use the term employee, instead use words like crew, cast etc (Snow, 2011). Disney believes in keeping its employees happy as they feel that a satisfied employee is more likely to be more productive. For this reason, Disney tries to make the employees feel ‘at home’ even when they are at work. Disney’s corporate level strategy is to provide an unmatchable variety of product and diversification. Disney merges with other companies or purchases them and this is how it aims at achieving diversification. Disney acquires companies and then brings in diversity in its products and services. For instance, by acquiring ABC, Disney went into the market of through television series (Ibid, 2011). The increased business operations and takeover of firms that could enhance competitiveness gives organisation an advantage over others operating in the same industry.
M & A Potential Target: Abbeville Press and Green Wood Publishing
Abbeville Press has its headquarters in the city of New York. It is an independent publisher of books that are on fine arts. Abbeville was founded in the year 1977. Abbeville is now also incorporating digital technology. For Abbeville Press, the publication of illustrated books is a distinctive specialty as it requires more effort due to the standard of editorial, designing and the graphics involved. Abbeville now also has many e-books and iBook’s as well (Abbeville, 2015). This company is adjusting and incorporating the changes that are taking place in technology. Abbeville Press comprises of craftsmanship and delineated books for a global readership. Abbeville Gifts is an imprint which creates journals, stationery, and other printed stock. In 2007 the organization reported the release of Abbeville Family, another division that had a great variety for children, young adults, and families. Abbeville is a small independent company yet has been very successful and so is a good option for a merger or an acquisition.
Abbeville has won awards for the following titles-Botticelli (1990), Travels with Van Gogh and the Impressionists (2007), Giuseppe Panza (2007). Abbeville has won many more award and acclamations (Abbeville, 2015). Abbeville should merge with Greenwood Publishing Group, which is a well-established publishing house that produces educational and academic content. Greenwood started off in Westport, Connecticut. This merge will aid both the firms achieve diversification as Abbeville has technology for publication of illustrated books and Greenwood has resources for academic content. When put together, both these firms will be able to earn more profit. Greenwood was founded by Harold Mason, a librarian in 1967. When it started, the press would only reprint books that were not being published any more, they were also called “out of print works” (Galpin and Herndon, 2007).
When the company was bought by William House in 1969, the press went through intensive development and expansion. When Greenwood was run under Hagelstein the new president, the content being published went from being reprinted material, to scholarly content. This massive redirection of resources led to the publication of over ten thousand books, which in those days was a lot. Greenwood Publishing Group, Inc. presently publishes books and journals that are solely academic and those that are based on ‘general’ topics, are aimed at librarians or are reference titles for academic purposes. This merge would be beneficial for both the firms as they will be able to produce different types of books, this will attract more customers and will also help increase sale. Greenwood’s forte is academic and serious content, whereas Abbeville’s forte is that of illustrated books, designing and graphics (Abc-Clio, 2015). If they both merge their expertise and technology, they will be able to produce good quality content and the merging of expertise may also result innovated and different types of literature. They may be able to create something different and extraordinary.
Corporate and Business Strategies
Abbeville does not operate internationally. One Business strategy that it can use, is to translate the books into other languages and then circulate them I foreign markets. Although online reading has increased a lot, yet many people still prefer to hold a book in their hand when reading. A business strategy is focused on the customers. By translation books into other languages, the sales will go up as more people will be able to read them. As more people buy and read books, will help the press bump the sales of the press. By translating the books into different languages, Abbeville will be catering to the needs and wants of more people and hence will be more likely to earn more profit. By keeping books translated in languages on their shelves (Abbeville, 2015). Abbeville will be able to attract more people as this will become its USP.
The corporate level strategy could be to develop a seed fund. So instead of merging with a rival, money should be allocated to provide authors or potential writers with a seed fund. This will help minimize costs in the long run, and it the quality of work is good, it will help increase profits. Abbeville can set a particular grant for authors, which should be enough to cover freelance editing and cover designing and maybe even a little marketing charges and in return, can receive the compensation in the form on ten or twenty percent of the sale as well. As get the right to refuse the publication. This will prove to be a successful corporate strategy as it will help them achieve their target which is increased sales and profit (Norton and Hughes, 2009).
Abbeville.com,. (2015). Abbeville Press | Art Books, Illustrated Books & Photography Books. Retrieved 22 February 2015, from http://www.abbeville.com/
Galpin, T., & Herndon, M. (2007). The complete guide to mergers and acquisitions. San Francisco: Jossey-Bass.
Norton, A., & Hughes, J. (2009). E2 - Enterprise management. Oxford, U.K: Cima/Elsevier.
Pixar.com,. (2015). Pixar. Retrieved 22 February 2015, from http://www.pixar.com/
Sherman, A., & Sherman, A. (2011). Mergers & acquisitions from A to Z. New York: American Management Association.
Snow, W. (2011). Mergers & acquisitions for dummies. Hoboken, N.J.: Wiley.
The Walt Disney Company,. (2015). The Walt Disney Company. Retrieved 22 February 2015, from http://thewaltdisneycompany.com/