1) Should Disney buy Pixar? What are its alternatives?

 
Yes. Disney should buy Pixar. The deal would provide Disney with an in-house supplier of the best in
computer-animated entertainment. Disney can benefit from the acquisition due to the following reasons:
 Disney would get access to the rich resources and capabilities of Pixar. Disney is facing problems
with its 3D CG technology. The costs are high and the training for staff has heightened tension and
decreased morale. Pixar owns superior 3D CG technology which can produce high quality animated
movies. This is reflected in the fact that all 5 of Pixar’s movies have done extremely well at the box
office. The deal would also help Disney get access to the proprietary software systems of Pixar i.e
RenderMan, Marionette and Ringmaster. Acquisition of these resources and proprietary software
would help Disney make animated films faster than its competitors and at a fraction of their cost.
 Pixar spent 10 years to build the culture of creativity, technology, and blending. It would be
impossible for any other company to develop such a culture in-house within a short period of time. It
makes complete sense for Disney to acquire this complex resource that they cannot build.
 Pixar is looking to be self-reliant and make movies independently or they are looking to find new
partners. This acquisition would enable Disney to eliminate the potential competition from Pixar.
 Disney relies heavily on Pixar for its characters and its revenue and operating income. Home videos
and character-related sales had long tails and the potential to generate revenues for many
years. Sequels to successful movies were another important source of revenue. Thus, it would make
sense for Disney to