Appunti Corporate Strategy A.A. 2022-2023

CASE STUDY DISENY-PIXAR

STRATEGIC PROS PIXAR

• Disney is a leader in the market, we can sell to take advantage of the momentum;

• Disney knows Pixar, due to several collaborations and to the presence of Steve Jobs

• Exploit the synergies with Disney, since it is well-known and has a higher power/possibility

to create value also with other companies

• Very high price

• Disney pays a lot

• Have access to the distribution network of Disney

STRATEGIC CONS PIXAR

• Possible threats and loose of competitive advantage (Pixar technology);

• Pixar is a very solid company

• They can destroy its culture, by taking the IP

• Disney wants movies that can create new characters for franchises (not like Up or Inside Out),

so limits to our creativity

• How would it be to work with other players?

• Disney will retain the IP, so they can exploit franchises

If Disney does not close the agreement, Pixar has some alternatives:

→

- Develop its own distribution network so much investment, impossible

- Look for another distributor →

- Negotiate another agreement with Disney it is very hard and it would be a nightmare. For

example, who has to decide about next characters? During Christmas time, who has the window to

release a new movie? Who has the right to go ahead with the development of characters? What about

the % of profits for Disney?

CONS OF DISNEY TO ACQUIRE PIXAR

• It is very expensive

• Pixar being part of Disney will not work in the same way

• Is the technology that we are buying the one of the future?

If Pixar does not want to close the agreements, Disney could have different alternatives:

➢ Negotiate another agreement;

➢ →

Internal development takes a lot of time, it is costly, the likelihood of unsuccess is very

high;

➢ Hire someone from Pixar → is hard for loyalty, employees love the company Disney was

famous to fire their employees while Pixar to hire them so none could ever move from Disney to

Pixar.

The M&A was a success, Disney bought Pixar by keeping it independent saving the culture of this

company. Disney is managing everything related to merchandises, distribution and so on. Pixar,

through its movies, is trying to push reflections. In M&A there are always Pros and Cons, always

stress the risks that there are.

RENKTOKIL INITIAL

It is an English multinational based in London, which provides services in B2B that protect and

enhance lives. This is the world’s leading commercial pest control and hygiene service provider.

Rentokil is in the pest control, to control and monitor infestations, to protect other businesses from

pest. With Initial there is another business line, in order to protect people from batterias. For more

than 90 years, they have been served customers with disinfection and pest control services, hygiene

scent marketing services interior landscaping and green solution’s services.

services, premium

In December, they finalised the acquisition of Terminics specialized in termails. In 2021, they grew

by 10% in revenues. The strategy followed is a combination of internal growth and acquisitions. They

protect people from the dangers of pest-borne disease and the risks of poor hygiene, by enhancing

of people and the reputation of their customers’ brands.

lives with services that protect the health

In Italy, hey work through 11 branches. In the mid of 2017, Rentokil Initial Italy acquired CWS Italy.

The fact was that CWS was bigger than Initial, with more employees and revenues. The smaller

bought the bigger, but loss-making. Together they became the n.1 in the market by far, together they

made a lot of sense.

The complementary business mix was characterized by: washroom, floorcare, workwear (e.g.,

doctors that wear an uniform) and product sales. They were very similar, but also different from the

logistics set up. CWS had an heavy infrastructure, which was generating a lot of costs.

When you have to face a very complex project, “slight the salami”. The phase 1 and n. 1 priority was

to bring CWS into profits in 6 months (within a company on the stock exchange, you need to deliver

money). Phase 2 was the operational integration, while phase 2 IT and legal part.

Fundamentally is to define objectives, clear ones, and these are: create value, profitable growth and

generate cash (“cash is the king”). Clear strategy as well was needed, which was based on a service

excellence:

➢ Continue to service customers with same passion, dedication and high standards;

➢ Meet customers expectations;

➢ Focus on customer retention.

Then, there was the increase of service offering:

➢ Introduce a complementary value proposition of products and services;

➢ Implement upsell & cross-sell.

Finally, there was the higher geographical coverage (with more services branches).

The creation of a project team was the first thing to do, because the companies were different and had

different culture (1 was german and the other one English). Hence, the project name chosen was

“Tango” (“it takes 2 to Tango”). The project areas were: F&A, HR, IT, sales&marketing, hygiene

ops and logistics. Each working stream had projects: for instance in the HR, internal communications

is essential since all people must be aligned. In the sales&marketing, the main issue was the loss-

making customers. At the end, they lost less customers than they expected. The key factor was

training well sales people, a lot of preparation to create arguments to answer to objections. One single

touch point can be enough to ruin the relationship with customers, everyone must be right and aligned

with customers’ expectations.

P.S. you do not have to fear to talk with customers about price increase, it is tough but it can be very

successful!

The more complex piece of work was IT, they have to re-analised all the internal processes that

required clear strategy and process gap analysis for all sales processes.

In a transformation program, day 1 is crucial: what do we do? Communication is key always,

especially in restructuring. A program manager (someone who is well organized) was appointed to

deal with all the projects, each one has a preparation time and then there is the execution. The media

can change, but the principle remains the same.

Managing change, in any transformation you have to manage change and the best who explained this

was Kotter with 8 steps of change model.

The first phase relates to the creation of a climate for change:

1. Establish a sense of urgency

2. Create the guiding coalition

3. Develop a change vision

The second phase was to engage and enable the whole organization, since the transformation requires

that everyone is engaged:

4. Communicate the vision for buy-in;

5. Empower broad based action;

6. Generate short-term wins (e.g., 6 months to achieve profits)

The last phase is to implement and sustain change:

7. Never let up;

8. Incorporate change into culture.

The change curve model is formed by time and a positive/negative impact. With knowledge of the

change curve, you can plan how you’ll minimize the negative impact of the change and help people

to adapt.

Conflicts will always arise, they are present on a daily basis and it is a matter on managing them.

The second business case is the Customer Experience & Digitalisation 2022-2022, which started from

the development of digitalization.

They started to create more solutions for customers to be in contact with them, namely the Customers

Portal. The Proof of Service can be digitalised, they have implemented also a Digitalized Signature

Customer Contracts (which once negotiated with the sales recap. and agreed, they are sent to

customers). Customers did not have to call or write emails to get what they want, because of self-

serve, and this reduced also inquiries. This involved a reduction of paper contracts to be archived, of

customer disputes, quicker resolution time and improved CX experience. The re-organization was on

the front, back office and service planning from 3 departments into the creation of 1 CX team.

ENTRY MODELS

Growth that creates value

Competences on modes of growth can influence appropriate mode of growth, which industries and

how they move are linked both to objective (e.g., targets) and subjective (e.g., experiences) issues.

When deciding how to enter in a new market, we have:

To choose the best mode to enter;

To consider the background of the company.

Choice of entry modes could be also linked to the history of the company and to managers, like their

“preferred mode of entry”,

successes and failures. Each company has a for example Mondadori does

not use JVs or Campari usually uses M&As.

Modes of growth

The entry modes can be divided in two main categories:

• →

Internal solution organic growth (growth with internal solutions);

• →

External solution Acquire a company or a piece of a company (ownership):

- Acquisition;

- Merger of equals;

- Minority investment (just for a small part of the shares).

Agreement with a company (partnership):

- Joint venture;

- Strategic Alliance.

Joint Ventures

It is a partnership, they are very complex and usually do not work. It is a new company set up by 2

companies and they are shareholders of this new legal entity, which is in charge of developing a new

project. Example: Smart was a JV between Swatch and Mercedes, so they founded this company 50-

50. They decided to do so because it was impossible to have an agreement (namely, an alliance), since

plan everything and forecast the situation is not possible in this context. JV are justified by the need

to share risk, or due to some laws, and can be:

➢ Vertical → sequential activities: it means that we have two partners that build a new company

and one is running the operation A and the other the B and both are in sequence;

➢ Horizontal → one activity.

The reasons to do it are:

• Impossibility to define right and obligations for each partner and the growth of the market;

• Partners working in different countries (so, to overcame national legal barriers).

Mergers & Acquisitions

Merge → two companies putting together. It occurs when two firms agree to integrate their operations

on a relatively coequal basis.

Acquisition → one company buys another company. Someone is buying and selling something

because the game is getting bigger. It involves one firm buying a controlling interest in another, with

the intention of making the acquired firm a subsidiary business within its portfolio.

The M&A types and degree of control are:

✓ →

Low-touch ownership This type of acquisition is used to preserve and grow the existing

company that already performs well. Examples are Microsoft-LinkedIn and Fiat-Ferrari;

✓ →

Merger under equals when both sides bring considerable assets into the merger. Ex.