Why Disney should be acquiring smaller movie studios like Pixar, Marvel, and Lucasfilm?

Combined business capabilities have valuable synergies 

Before the acquisition of Pixar, Disney lagged in computer-generated films. This is a growing market, and Pixar has unique capabilities like its engineers and a culture where the engineers can innovate freely and creatively. The capabilities of Pixar are difficult to imitate as it is challenging to determine what resources are used and how they can be recreated. At the same time, Pixar lacks marketing and distribution muscle. This is an area where Disney can complement Pixar. Disney acquiring studios like Pixar, Marvel, and Lucasfilm will enable Disney to leverage the characters created by these studios. 

Increased market power 

With Marvel’s 5000+ characters, Disney can do what it does best. In total, Marvel movies have generated over 22 billion dollars for Disney. 

Decrease the cost of new product development 

The characters that Disney acquired, along with its acquisitions of LucasFilms, Marvel, and Pixar, will result in a cost decrease of new product development and increased speed to market. Also, Disney’s unique portfolio of brands provides significant long-term opportunities for growth and value creation. 

For these reasons, Disney must continue acquiring smaller studios like Pixar and Marvel.