Strategic alliance is an agreement between two or more organizations, with the aim to achieve a result one of the parties cannot achieve alone. As in the strategic alliance each company maintains its autonomy while gaining new opportunity, it could help a company to develop more effectively, expand into a new market or develop an advantage over competitors, among other possibilities. Would it be a good solution for Disney to create a strategic alliance with Pixar? Pixar’s family oriented content meshes well with Disney’s brand and is an important cog in its cinema/home video distribution, theme parks and consumer products divisions. Both Disney and Pixar are highly successful brands, ...view middle of the document...
There is also opportunity to get a wider access to target market and enlarge distribution channels.
However, becoming a partner with Pixar, Disney‘s communication would be less efficient as it would lost control over the decision-making process. Also, the management involvement would get weaker. Disney would no longer be able to keep control over such an important issue as product quality, operating costs, employees, etc. The fact of the danger of misunderstandings which can lead to the breakdown of the agreement cannot be missed.
Furthermore, there also appears the risk that Pixar’s will change priorities, strategies or leadership, causing the alliance to falter.
Although, creating a strategic alliance with Pixar, Disney would save a lot of money, their profits just like costs will be shared. What is more, the barriers to future fininacing opportunities appear.
Disney cannot predict what to expect in the long-term cooperation in alliance with Pixar. There would probably appear unexpected disappointments and changes in the point of view.
Undoubtly, Pixar would benefit if it was in strategic alliance with Disney. However, it seems that Disney has more to loose than to gain and strategic alliance is about bringing mutual benefit one company to another. As Disney is very powerful company, the risk of losing its unique community identity and autonomy appears. According to this Disney should consider a different way of cooporating with Pixar because from a longer-term perspective, this alliance is not fundamental to achieving a bussines objective for Disney and could become critical in the future.