Thursday, October 21, 2010

Pixar: Generic Strategies

There is a tough-minded business strategy behind Pixar's we're-all-in-this-together workplace. A single animated feature takes four or five years to complete, the last 18 months of which feel like a breathless sprint. In such a high-stakes environment, even the most outrageously talented individuals are bound to suffer creative setbacks. One reason Pixar has produced such a string of hits is that the organization has learned how to hang together under the pressure.

Pixar also targets the mass market with its movies, but adopts a differentiation strategy, using its unique capabilities in story-telling and animation to produce signature animated movies that are hard to copy, and for which customers are willing to pay to see and own. Apple also targets the mass market with its iPhone and iPod products, but combines this broad scope with a differentiation strategy based on design, branding and user experience that enables it to charge a price premium due to the perceived unavailability of close substitutes.

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