Pixar
The Balanced Scorecard Approach
•
Toy Story was nominated by the Academy Awards for best picture and
best animated feature and grossed more than $1 billion worldwide.
•
Claimed 4 Oscars for best animation since 2001.
•
Pixar is a “tightknit company of long-term collaborators who stick together, learn
from one another, and strive to improve with every production” and has built a
reputation for long-term affiliation and contributions throughout the entire
organization (Taylor, 2008, para. 6).
•
Competes against Dreamworks (creator of Antz) and Sony (creator of Cloudy with
a Chance of Meatballs).
•
Disney’s talent for animation is what sparked the creation of Pixar by Edwin E.
Catmull in 1975.
Pixar issues and concerns:
•
The 2006 acquisition by the Walt Disney Company (creator of Wreck-It Ralph and
Tangled) brought with it concerns as to whether or not Pixar could continue to
produce record-breaking animated films.
•
Can Pixar increase production without compromising the high standards the company
was founded on.
•
Is Pixar capable of continuing to make good decisions their customers and
shareholders have come to expect?
•
Can they continue to make creative films and expand production capacity?
Balanced Scorecard
Customer Perspective

What needs must Pixar meet and serve?

Pixar creates value by ensuring fun for the whole family.

Adults can look forward to going to see a kids movie (with or without the kids) bringing
out the kid in everyone!

Toy Story I, II, III

It’s a Bug’s Life

Monsters Inc.

Finding Nemo

The Incredibles

Takes advantage of new technology and social media sites (Facebook, Twitter, and Instagram)
in an effort to keep track of the public’s likes and dislikes.

Continues to perform to customer standards by providing animated films with captivating
storylines.
Internal Business Perspective

Core competencies surround a unique approach to making exceptional
films and the fact that “quality is more important than quality” (Dess,
Eisener, Lumpkin, 2012, p. C218).

Preserves its lengthy process of crafting films to ensure consistency
and continue producing high quality and creative films.

Addition of new division to meet the growing demands and faster
production pace in an effort to generate more ideas for new films.
Internal Business Perspective

Achieved First-mover Advantage against its competitors:

“Pixar was the first to move into the digital animation movie technology
and used its know-how to gain access to Disney’s brand name reputation in
animation, storytelling, merchandising might, and its distribution channels
through an alliance that was beneficial to both firms” (Afuah, n.d., p.
151).

First to pursue digital animation technology: “Pixar had a chance to
cooperate with Disney and take advantage of its storytelling capabilities
and distribution channels to complement its digital animation technology
so as to create the likes of Toy Story and Finding Nemo” (Afuah, n.d., p.
113).
Innovation and Learning Perspective

Inspiring and motivating people creatively is what keeps Pixar at an advantage
competively.

Human Capital:


“Individual judgment is enhanced by organizational judgment” (Davenport,
2010).

Pixar’s management has a high degree of autonomy. At the same time,
feedback from all levels is taken very seriously!

Talent consists of highly creative: Hollywood production directors, writers,
artsy animation experts, engineers, storytellers, and technologists.
Pixar has established itself as an organization dedicated to learning:

Pixar University: 110 different courses available

A “complete filmmaking curriculum, classes on painting, drawing,
sculpting and creative writing” and every employee is encouraged to
dedicate up to 4 hours a week on utilizing these courses(Taylor, 2008).
Innovation and Learning Perspective

In its drive to achieve competitive advantage, Pixar takes advantage
of its Information Capital:

Consistently develops groundbreaking software systems:

“Marionette, Ringmaster, and RenderMan, and a laser recording
system for film—Pixarvision” (Afuah, n.d., p.395).

Development of new animation software, called Luxo, to allow for
a fewer number of animators per movie.

Using computers to produce a unique style of creative moviemaking.

Technological achievements help develop creativity.
Innovation and Learning Perspective

Organizational Capital:

Free-wheeling entrepreneurial culture sets an environment in
which creativity is key.

Creative Workspace & Work Environments: office cubicles
transformed into tiki huts, circus tents, and cardboard castles.

Encourage collaboration while reducing collective burnout
 Doctors
and Masseuse are available weekly or as needed.
Innovation and Learning Perspective
 Pixar
continues to share internal knowledge in an effort
to continuously satisfy the growing needs of its
customers and shareholders.
 Another
key to Pixar’s success is its commitment to
challenging the status quo and fostering creativity
throughout its organization!
Financial Perspective

Profitability

Although animated films cost 30% less than traditional films, they take
considerable time to develop.

Pixar understands it’s the storyline that is the driving force behind
successful movies.


The Company Motto is “Where story is King”
Operating Efficiency

Increasing production could solve this, however the number of employees
will also double creating additional concerns as to quality, production
pace and the consistency of operations.
Financial Perspective
Revenue

In 1995, Toy Story grossed the
third highest animated film of
all time, earning $362 million in
worldwide box-office revenues;
Shares of stock rose from $22
to $33!
References

Afuah, A. (n.d.). Strategic Innovation: New game strategies for competitive
advantage. Retrieved from
http://psbm.org/Ebooks/Strategic%20Innovation%20New%20Game%20Strategi
es%20for%20Competitive%20Advantage.pdf

Davenport, T. (2010). Five ways Pixar makes important decisions. Havard
Business Review website. Retrieved from https://hbr.org/2010/07/how-tomake-good-decisions-les

Dess, G., Eisner, A., & Lumpkin, G.T. (2012). Strategic Management (6th ed.)
McGraw-Hill, New York, New York ISBN – 13 9780078029318

Taylor, B. (2008). Pixar’s blockbuster secrets. Harvard Business Review
website. Referenced from https://hbr.org/2008/07/pixars-blockbustersecrets
Instructor’s Comments

Here is my summation of the problems/challenge at Pixar: The challenge is to
continue to create new films which depends on creative, highly motivated
employees, leading-edge technology, and world-class leadership. Dr. Rodgers