Company Background
Pixar Studios, based in Emeryville, California, is a visual effects studio with numerous nominations and awards for its ability to advance technologically and creatively. The production of films, merchandise, and other related items for the younger generation is a crucial area of the company’s activities. In addition, the company appears in the production of toys based on their works, which are also popular. It occupies a large share of the entertainment industry by producing much content. An interesting fact is that Pixar combines the artistic skills of its workers and technological innovations to create computer animations.
However, all this is possible thanks to competent management regulating all company components. By studying Pixar’s management strategy, it can be learned how to properly allocate resources to create unique content. In this case, the three most intriguing elements are how the company combines employee talent and technology, resource management, and development strategy. Pixar is a brand with high standards; therefore, the best efforts are always required from employees. This fact is also interesting because it constantly forces people to improve their skills. It also ensures the outstanding quality of the feature films the company releases. To understand how Pixar has succeeded, it is essential to look at every aspect of its operation.
Background
The studio is known as one of the producers of entertainment content, but it is crucial to study what aspects led to this. Pixar Studios was founded in 1985 after Steve Jobs acquired Lucas Film’s graphics sector and made it an independent company (Dess et al., 2020). Pixar later merged with Disney as a subsidiary. Ed Catmull and John Lasseter served as the company’s president and chief creative officer, respectively. These two managers oversaw all significant aspects of the company’s work, from idea creation to production process and product release. Their hard work aimed to take the company to the heights of its entertainment industry. Pixar has several family cartoons such as Monsters, Inc., Up, Finding Nemo, and Toy Story, for which it is best known. Throughout its existence, the company’s employees have received 11 Oscar awards and 40 nominations for this award. Pixar is one of the leaders in its industry of producing entertainment content for the young generation.
However, all this became possible only thanks to the ability of managers to create the right working atmosphere and build relationships between team members to achieve better results. The company is always striving to improve and bring new aspects to the industry that can help it outperform the competition. This approach means that employees should always try to do their job perfectly, even if it is already at a high level. This provides a search for new concepts and strategies for making films. The company believes that creativity is used to the maximum only when the creativity of employees generates many ideas that can be brought to life (Comparably, 2022). Breakthrough ideas like these have helped Pixar succeed in creating content.
Mission
As stated earlier, Pixar sets itself high-performance standards, which is reflected in its mission accordingly. According to Dess et al. (2020), “Mission statements have the greatest impact when they reflect an organization’s enduring, overarching strategic priorities and competitive positioning” (p. 43). The company has many different resources, such as skilled workers, equipment, and experience. Pixar’s mission is to combine all of these components to create animations and artwork with the best stories, memorable characters, and storytelling that audiences of all ages will enjoy (Pixar, n.d.). Such a mission indicates that the company is focused primarily on content consumers who can be both adults and children. Such claims by the company are the main reason Pixar achieved so many box office successes. After all, combining technology and artistic talent is a winning strategy to become a leader in some fields. At the same time, an organization with these resources must know how to manage them properly, otherwise, financial performance may drop significantly. A mission statement is a key tool in the implementation of any strategy as it decides what must be carried out (Cortés Sánchez, 2018). Pixar can confirm this since its activities directly reflect what is written in the company’s mission.
SWOT Analysis
A detailed analysis of the environment should be written to understand how the company can develop further and what factors influence its course. According to Dess et al. (2020), “Environmental scanning involves surveillance of a firm’s external environment to predict environmental changes and detect changes already underway” (p. 51). Such a review can be carried out with the help of a SWOT analysis, which shows in detail the advantages and disadvantages of the company.
The company’s strengths can be considered modern technological computer graphics standards and effective management. In addition, the high-quality end product and sales of animation-related products are also strong points. The company’s weaknesses are the long terms of development and production of films and their high cost. In addition to this, the limited release of the film affects the volatility of earnings. Opportunities for the company are cooperation with Internet resources and mass media to raise awareness about new films. In addition, the company can expand by releasing films for different audiences and capturing new markets. The threat to the company is the failure of the film, which will shake the position and allow competitors to increase their market share. Another threat can be digital piracy, which reduces the company’s film income.
A SWOT analysis of Pixar reveals the company’s strengths, the areas in which the brand excels, and what sets it apart from the competition. In addition, the weaknesses that keep the company from achieving results are studied and what needs to be improved (Benzaghta et al., 2021). It lists the opportunities that the brand can use to grow further, as well as the threats that could harm the company.
Porter’s Five Forces
Regarding the threat of new entry, animation producers can significantly reduce costs by reducing the cost of producing the following product. This gives the company an advantage over competitors because their costs will be much higher when entering the market. As for purchasing power, the company cooperates with various resources to advertise its product. According to (Dess et al., 2020), “A business that strives for a low-cost advantage must attain an absolute cost advantage relative to its rivals” (p. 120). In addition, since films are rarely released, Pixar has teamed up with some studios to release video games based on their animations.
On the supply side, Pixar has a low, low concentration of suppliers because the business is focused on media content. From the threats of substitution, we can highlight the fact that the development of technology leads to the fact that the neural network can draw something almost as beautifully as Pixar does (Miller, 2019). In a highly competitive environment, Pixar has no worries as the industry never shrinks, and all the key players are large enough to divide their spheres of influence.
References
Benzaghta, M. A., Elwalda, A., Mousa, M. M., Erkan, I., & Rahman, M. (2021). SWOT analysis applications: An integrative literature review. Journal of Global Business Insights, 6(1), 55-73. Web.
Comparably. (2022). Pixar Animation Studios mission, vision & values. Web.
Cortés Sánchez, J. D. (2018). Mission statements of universities worldwide: Text mining and visualization. Intangible Capital, 14(4), 584-603. Web.
Dess, G., McNamara, G., Eisner, A., & Lee, S. (2020). Strategic Management: Text and Cases (10th ed.). McGraw-Hill Higher Education (US). Web.
Miller, A. I. (2019). The artist in the machine: the world of AI-powered creativity. Mit Press.
Pixar. (n.d.). A collaboration between art & technology. Web.