How does Pixar use strategic management? What is Pixar’s competitive strategy, and what is the basis of Pixar’s competitive advantage?

Since Pixar launched Toy Story in 1995, it had released 17 other films, each of which debuted at the top of box office charts. However, in 2015 Pixar had released The Good Dinosaur to less than stellar reviews, and this followed a year without any releases and less than rave reviews for the 2013 sequels Monsters University and Cars 2. This led many industry observers to question whether Pixar had lost some of its creativity since it became part of the Walt Disney Company in 2006.

Pixar’s track record had made it one of the world’s most successful animation companies. The string of successful releases since Toy Story’s success in 1995 – Up, Cars, Ratatouille, and Wall-E —suggested that Pixar had continued to flourish despite its 2006 acquisition by the Walt Disney Company for the hefty sum of $7.4 billion. In 2013, Pixar’s Brave received an Academy Award nomination for best animated feature. This was not unusual: Toy Story 3 had been nominated in both the best picture and best animated feature categories in 2010, and it became the first animated feature to gross more than $1 billion in theatres worldwide. Wall-E had won the Academy Award for best animated feature in February 2009, and with this win, Pixar had claimed its fourth feature length animation Oscar, which represented half of the eight trophies that had been handed out since the category was added in 2001.

Concerns at the time of the acquisition were that Disney’s difficulties resurrecting its animation department would have a negative effect on Pixar’s unique creative culture. However, actions taken by Pixar’s major original investor, Steve Jobs, president Edwin Catmull, and “creative” vice president John Lasseter had not only made Pixar successful, but were becoming mutually beneficial for both firms.

After it acquired Pixar, Disney placed Catmull and Lasseter in charge of the combined animation business of both Pixar and Disney. Tangled, Frozen, and Big Hero6, which were commercial and critical successes, were made at Disney under the supervision of these Pixar heads. Catmull had continued to point out the firm’s commitment to take whatever steps might be necessary to put out the best possible film. Pixar was dedicated to having its lengthy process of playfully crafting a film replace the standard production line approach that had been pursued by Disney. The delay in the release of The Good Dinosaur was a signal that high standards would not be compromised for the sake of a steady flow of films.

But Pixar had had difficulty stepping up its pace of production. The firm had built up its workforce to well over 1,000 employees, had handed over directorial duties to new talent, and had added new divisions. Since a large part of its success could be attributed to the talent that the firm was able to recruit and train to work together, there was some concern that this talent pool was finite, and therefore might constrain Pixar’s ability to grow. This was even more concerning considering the increasing competition as more and more studios tried to grab a share of the animated film market. Could Pixar continue to develop hits, both for itself and for Disney, and hold onto the creative talent necessary to do so?