Pixar have used its various forms of resources as stated below to build its capabilities and competencies needed in order to gain a competitive advantage in the animated film industry. Financial Capital: Financial capital is the fundamental resource to run the business and is critical for its success. In the early days of Pixar, under the leadership of jobs, he invested $50 million on computer animation which allows Pixar to make substantial breakthroughs in the development of computer generated full length feature films.
Steve success launched IPO and made the company in the billionaire’s club. After receiving the hefty sum of $7. 4 billion acquisition payout from Disney in 2006, Pixar used its financial capital to continue to develop computer animation (e. g. allowed for more lifelike backgrounds, texture, and movement) which has had become one of its core competences for its success. Beside technological competence, Pixar also used its financial capital to heavily invest in employees’ trainings (Pixar University) to enhance the capabilities embedded in human capital.
Human Capital: Among all the resources Pixar have used, human capital is the most critical resources contributed to its success. Tapping on the expertise knowledge from Edwin E. Catmull in animation and John Lasseter in story development, Pixar is able to produce high quality of animated film. Pixar attracting Silicon Valley techies, Hollywood production honchos and artsy animation experts who are worked together to improve its computer animation, develop compelling stories and present visual artistry so as to create high quality animated films.
Given that learning and building knowledge are important for creating innovation in films, Pixar created programs to expand the employee’s knowledge and encouraged them to further their education at Pixar University, which contribute positively to form Pixar’s core competence in human capital. Social Capital: Inside the firm, Pixar has been using Pixar University to encourage collaboration among all employees so that employees cooperate with one another to get the work done. Pixar maintained strong internal social capital by encouraging exchange of ideas and fostering a collective sense of responsibility.
Outside the firm, before Disney’s acquisition, Jobs had made a deal with Disney making use of its established distribution network and merchandise outlets to distribute all its films and split the profits, which also allows Pixar tap on Disney’s marketing Strength and established network capability as Disney guaranteed that they will market Pixar films as they did its own. Even after Disney’s acquisition, Pixar is allowed to operate on its own and its creative culture is protected, it gains full support from Disney that provided all the resources it needed to successfully compete against their rivals.
Organizational Capital: Jobs recognised that not only cutting-edge technology that allows Pixar to rise above most of its competition, but the combination of technology and creativity. In order to build an innovative culture, Jobs fostered a campus-like environment to provide a freewheeling communication platform while Catmull kept the company’s unique innovative culture by transforming their office cubicles into tiki huts, circus tents and cardboard castles with bookshelves that are stuffed with toy. Such innovative culture allows Pixar to generate unique ideas and be both creative on the use of technology and story development.