Collaboration Relationship: Disney Studios and Pixar - Essay Example

Collaboration Relationship: Disney Studios and Pixar A collaborative relationship between two companies is described as a process through which companies merge their business activities with a purpose of strategically leveraging their business resources for their benefit (Meunier-FitzHugh, Kenneth and Nigel 287). This form of collaboration includes coordination of business activities, communication of data and information between companies and the development of a culture of transparency and trust especially among the managers of the collaborating companies (Ronchi 23). This paper gives a critical analysis of a collaborative relationship between companies with a special focus on the collaboration of Disney Studios and Pixar. The value of collaboration between these companies is described in light of the various concepts of a collaborative relationship between companies. In addition, the challenges that are faced by companies in the implementation of a collaboration relationship are discussed within the essay. The collaboration relationship between the two companies is viewed from the perspective of the business strategies of both companies and the approach of management that the companies employed in this relationship. In the years of 1990s and 2000s, Disney Studios and Pixar had a collaboration relationship in which the companies worked together in the production and launching of famous and successful films and movies. This form of collaboration was motivated by the need to leverage each of these companies’ resources for their own business benefit (Levy and Katie 97). A collaboration relationship of companies is often necessitated by the realization of the management of two companies that these companies need each other so that they would become competitive and survive within the market and industry of their operation (Meunier-FitzHugh, Kenneth and Nigel 290). For example Disney Studios and Pixar needed the resources and business strengths of each other so that they would survive in the movie business. This is demonstrate by the effective film distribution network, launching and marketing abilities of Disney Studios that Pixar needed for it to perform well in the market. On the other hand, the innovative image capture technology and the creativity of creating stories within Pixar were needed by Disney Studios for their success within the film industry (Levy and Katie 97). The management of collaborating companies in addition to the employees of these companies must be able to engage in efficient communication to enable the relationship to work (Singh and Will 498). This form of communication includes sharing of information on the market and the new trends in business activities. For example Disney Studios and Pixar in their collaboration relationship shared knowledge on the film industry and the movie market (Levy and Katie 97). The companies were able to understand the competitiveness of the market through the process of sharing information and data on the market. Through proper communication and information sharing, collaborating companies are able to independently utilize their business strengths to come up with innovative products and strategies which are employed within the market with an aim of making both of the companies more competitive and highly performing as compared to their business rivals (Ronchi 28). Successful collaboration relationship between companies is achieved through trust and transparency in business operations, management and financial reporting between the two companies (Meunier-FitzHugh, Kenneth and Nigel 289). Lack of such transparency and trust in the Disney Studio-Pixar collaboration caused differences and conflicts among the top managers of these companies. For example, Steve Jobs, Pixar’s owner, had frequent conflicts and clashing differences with the executives of Disney Studios. Such managerial differences between collaborating companies emerge from factors such as loss of trust and divergent opinions on business strategy (Singh and Will 497). In addition, if one company feels that there is unfairness in the sharing of the business returns, differences are likely to emanate within the relationship. The value proposition within a collaboration business relationship of companies is demonstrated by the fact that each of the collaborating companies is enabled to effectively and efficiently meet its purpose and objectives through the relationship (Meunier-FitzHugh, Kenneth and Nigel 294). This is because the structure of a collaboration relationship between companies is determined and defined by the purpose and objectives of each of these companies. Therefore each of the collaborating companies stays within the relationship with an aim of getting value for its contribution to the relationship (Singh and Will 499). A commercial dimension within the purposes of Disney Studios and Pixar was the motivator of the relationship. For example, Disney Studios wanted to get value from Pixar’s innovative and advanced technology so that it would get commercial value or gains in the production and sale of its films and movies. On the other hand, the Pixar required using the distribution abilities of Disney Studios to achieve commercial value of its creative story lines of the company’s films (Levy and Katie 97). The organizational strategies of Disney Studios and Pixar were designed to make use of the opportunities within the film industry for growth and increment of market share (Stanley 3). This describes the value proposition that enabled these companies to implement a collaboration relationship. Mutual self interest of companies in their strategic plans motivates them to merge their business activities and resources and as a result gain from the value propositions of each company to meet strategic objectives (Singh and Will 498). However the value propositions of each company should be defined so that each of the collaborating companies would determine the congruency of the propositions to its strategic plans, interests and objectives (Meunier-FitzHugh, Kenneth and Nigel 287). It is therefore argued that without a mutual interest between Disney Studios and Pixar, a collaboration relationship would not have been achieved. The collaboration agreement between Disney Studios and Pixar was achieved though proper design and implementation of the operational, economic and engagement models (Singh and Will 497). These models define the value propositions of the collaborating companies which allowed them to achieve business success as presented within their strategic plans and objectives. The success of these companies is demonstrated by the successful films such as Young Sherlock Holmes and Star Trek in addition to significant milestones in the film industry (Stanley 16). The role of the operation model in the collaboration agreement between Disney Studios and Pixar in their success is demonstrated by proper and collaborative decision making, consultation among stakeholders, definition of standards, roles and responsibilities. On the other hand the economic model of these two companies allowed them to effectively share costs and profits. The collaboration relationship between Disney Studios and Pixar was characterized by innovativeness as one of the major attributes of an effective collaborative culture (Stanley 17). This is disclosed by the remarkable research that was employed by the two companies on the needs of consumers as a basis for the production of films through the use of innovative technology. In return, high quality films and movies were presented by the companies to their market which made them to achieve significant growth. For example creative and innovative production technology and software applications were developed by Pixar as part of its value propositions in the relationship which was designed to enhance the ability of the companies to meet their strategic goals (Levy and Katie 97). In addition, innovative marketing strategies were employed by Disney studios which made the consumers of the films to have an appeal and desire for them. It is because of this that the companies achieved high sales and returns. For a collaboration relationship between two companies to achieve success, all stakeholder categories of both companies must be involved in business processes, activities and decisions. The decisions that were reached within the Disney Studios- Pixar relationship involved the executive management of both companies as one of the important stakeholders of the company (Levy and Katie 97). More importantly, the production of the films and movies by these companies were designed to meet the needs of the consumers who are argued to be the most important stakeholders of the companies. The suppliers and distributors of both companies were also involved in the business activities of the collaborating companies through effective communication. Furthermore the retailers of the films and movies of the companies is an important category of stakeholders who took part in the business operations and contributed to the success of the companies. In order to achieve a successful relationship with the society, both companied adhered to their corporate social responsibility. This includes the human resource management and consciousness with the environment. Collaboration relationships between companies are often faced with numerous challenges which would result into a split up of the collaborating companies. These challenges are often influenced by the approach to management which is employed by each of the collaborating companies (Meunier-FitzHugh, Kenneth and Nigel 291). The success of the collaboration relationship between Disney Studios and Pixar was challenged by the management approaches of these companies in regard to decision making, conflict resolution and communication. These challenges led to conflicts and differences between the management of the two companies. Regardless of these challenges, the two companies needed each other’s resources for success in the industry. Managerial challenges within Pixar are for example attributed to the poor sales that threatened the existence of the company’s business within the market. Works Cited Levy, Steven, and Katie Hafner. "Pixar's Magic Kingdom." Newsweek 129.11 (1997): 72 Meunier-FitzHugh, Kenneth Le, and Nigel, Piercy. "Exploring the Relationship between Market Orientation and Sales and Marketing Collaboration." Journal of Personal Selling & Sales Management 31.3 (2011): 287-296 Ronchi, Stefano. "Collaborative Markets in B2B Relationships." Supply Chain Forum: International Journal 12.3 (2011): 22-34 Singh, Kulwant, and Will Mitchell. "Growth Dynamics: The Bidirectional Relationship between Inter-firm Collaboration and Business Sales in Entrant and Incumbent Alliances." Strategic Management Journal 26.6 (2005): 497-521 Stanley, T. L. (2006). Pixar's magic touch could reanimate Disney. Advertising Age, 77(4), 3-28. Read More