Mini Case Study on Disney Mergers & Acquisitions by Hannah Khamil Miranda University of the Philippines Strategic Management

1. How Buzz Lightyear,
Iron Man, and Darth Vader
Joined Mickey’s Family
Hannah Khamil H. Miranda
BA 190 – Strategic Management
University of the Philippines
Prof. Mita Angela M. Dimalanta

2. Vision: To make people happy
Mission: To be one of the world's leading producers and
providers of entertainment and information. Using our
portfolio of brands to differentiate our content, services and
consumer products, we seek to develop the most creative,
innovative and profitable entertainment experiences and
related products in the world

3. Values and Ethics:
Innovation
Quality
Optimism
Community
Story – Telling
Decency

4. Disney is the world’s largest media company with
$45 Billion annual revenues.
Disney has grown through high profile acquisitions
which includes,
1. Pixar (2006)
2. Marvel (2009)
3. Lucasfilm (2012)

5. Strategic Alliances and Acquisitions
- Pursue common interests
- Enhance competitiveness
- Increase revenues
Acquisition – Led Growth Strategy
- Disney became a more stable, predictable
and diversified company

6. Internal
Resource
Relevance
Resource
Tradability
Desired
closeness with
Resource Partner
Feasibility of
target firm
integration
Revisit build-
borrow-buy
options or
reformulate
strategy
Internal
Development
Contract or
Licensing
Strategic
Alliance
Acquisition
Low Low High Low
High High Low High
Buy?Borrow via
alliance?
Borrow via
contract?
Build?
Strategic
Resource
Gap
Mergers and Acquisitions, Strategic Alliances
Build-Borrow-or-Buy Framework

7. 1. Why was Disney so successful with Pixar and
Marvel acquisitions, while other media interactions
such as Sony’s acquisition of Columbia Pictures or
News Corp.’s acquisition of MySpace were much
less successful?

8. Disney – Pixar – Marvel Acquisitions
“Disney managed its new subsidiaries more like alliances rather than
attempting full integration, which could have destroyed the unique value of
the acquisitions.”
Sony – Columbia Pictures Merger
“It is a Japanese failure of judgment and an American failure of
management.”
News Corp. – MySpace Acquisition
“Whatever the outcome, the 6-year-old marriage has become the latest
example of what can happen when a traditional media company imposes
its will - and business plan - on a start-up that has not yet reached its
potential.”

9. 2. Given the “Build-Borrow-or-Buy” Framework, in
Implications for the Strategist, should Disney
pursue alternatives to acquisitions? Why or Why
not?

10. Internal
Resource
Relevance
Resource
Tradability
Desired
closeness with
Resource Partner
Feasibility of
target firm
integration
Revisit build-
borrow-buy
options or
reformulate
strategy
Internal
Development
Contract or
Licensing
Strategic
Alliance
Acquisition
Low Low High Low
High High Low High
Buy?Borrow via
alliance?
Borrow via
contract?
Build?
Strategic
Resource
Gap
Mergers and Acquisitions, Strategic Alliances
Build-Borrow-or-Buy Framework

11. The Build-Borrow-or-Buy Framework
- Pursue internal development (build)
- Enter a contract arrangement or strategic alliance
(borrow)
-Acquire new resources, capabilities and competencies
(buy)
*Firms will be able to gain and sustain their chosen
competitive advantages as long as they select the right
pathways in obtaining new resources.

12. 3. Is Disney’s acquisition led-growth strategy is
sustainable? Are there sufficient “Mini-Disneys”
that Disney can acquire?

13. With this strategy, Disney is able to expand their firm and
maximize the full potential of other companies through
mergers and acquisitions.
Disney proves that these decisions give them more creative
talents and ideas that they are able to use to nurture and make
their brand stronger.
Through successive acquisitions, Disney is able to enhance its
competitiveness and gain greater revenues that make their
portfolio more extensive.

14. “Mini - Disneys”
1. Nintendo
2. Dreamworks
3. Hasbro and Mattel
4. Lego Company

15. 4. What effects are expected from continued
disruption of the media industry on Disney? How
should Disney respond?

16. Disney - Netflix Deal - “an exclusive US subscription
television for first-run, line action and animated
movies from Walt Disney Studios”

17. References:
Barnes, B. (2008, June 1). Disney and Pixar: The Power of the Prenup. Retrieved September 2, 2016, from The New York Times:
http://www.nytimes.com/2008/06/01/business/media/01pixar.html?_r=0
Nielson, S. (2014, January 13). Must-know: Could these key threats affect Disney’s profitability? Retrieved September 2, 2016, from Market Realist: http://marketrealist.com/2014/01/key-
threats-might-affect-disneys-profitability/
Leonard, D. (2013, March 8). How Disney Bought Lucasfilm—and Its Plans for 'Star Wars'. Retrieved September 4, 2013, from Bloomberg: http://www.bloomberg.com/news/articles/2013-
03-07/how-disney-bought-lucasfilm-and-its-plans-for-star-wars
Lang, B. (2011, June 15). News Corp.’s Failed Social Experiment: Why MySpace Didn’t Deliver. Retrieved September 4, 2016, from The Wrap: http://www.thewrap.com/news-corps-failed-
social-experiment-why-myspace-failed-deliver-its-promise-28285/
Barnett, E. (2012, January 13). Murdoch: we screwed up MySpace 'in every way possible'. Retrieved September 5, 2016, from The Telegraph:
http://www.telegraph.co.uk/technology/myspace/9012510/Murdoch-we-screwed-up-MySpace-in-every-way-possible.html
ICMR Organization. (2004). Sony-Columbia Pictures: Lessons from a Cross Border Acquisition. Retrieved from ICMR: IBS Center for Management Research:
http://www.icmrindia.org/casestudies/catalogue/Business%20Strategy2/Sony-Columbia%20Pictures%20Cross%20Border%20Acquisition.htm
The Walt Disney Company Home Page. (n.d.). Retrieved from The Walt Disney Company: http://disneycompanyprofile.weebly.com
Nielson, S. (2014, January 9). Must-know: Disney’s unpredictable Studio Entertainment business. Retrieved September 5, 2016, from Market Realist:
http://marketrealist.com/2014/01/walt-disneys-studio-entertainment/
Rothaermel, F. (2015). Strategic Management (2nd Edition ed.). New York, United States of America: McGraw-Hill Education.