The Disney-Lucas Negotiation
General Information
Walt Disney is an American largest and widely known company that deals with mass media and entertainment services. It is situated in Walt Disney Studios Complex in California. Walt and Roy, the two brothers, founded the Company in 1923 as a Cartoon studio. During that time, the Company operated on two names: Walt Disney Productions and Walt studio. However the name was changed to Walt Disney Company in 1986 and established itself as the American best Animation Company. Few years later, Disney diversified into the production of live-action films, theme parks and television programs. Since then, the Company has established corporate divisions to help in market more family-oriented brands considered to be mature content.
Walt Disney has surprisingly announced that it would like to purchase LucasFilm belonging to George Lucas. The Company is prepared to pay a staggering $ 4 billion to acquire the studio. The payment method was evenly split between cash and stock. LucasFilm Company has only one shareholder, who is George. Therefore Disney Company is better placed in the negotiation process as it does not need to involve many people in the acquisition of the Company. The fact that Disney will acquire the Lucas’ Company will be beneficial as it will promote it as the world leader in animation and the best producer of films. It will get the opportunity to earn massive revenue from the already established Wars media and Merchandise Empire.
Lucas is 68 years old and has decided to sell his multibillion empire because of his retirement plans. He believes that in a few years, he will not be able to manage the business because he is the sole proprietor of the Company. Disney Company needs to approach Lucas in such a way that he will see that his retirement plans are going to be met by the selling of the Company. The concern of many as far as retirement plans is the old age diseases, clothing, and food. It is, therefore, an excellent idea for Disney to take into account such factors in the negotiation process.
You are the CEO of Disney Company with annual revenue of $ 11 billion, and you would like to purchase LucasFilm, which has been announced to sell at $ 4 billion. Since the Company is a renowned Wars Star film producer, it will tremendously boost sales at Disney Company. Therefore, the foregone$4 billion to acquire the Company is a wise decision. Disney Company has several shareholders that dictate the operations of the Company. The success of the Company has been due to their combined effort in the management of Disney. This means that they have the potential to reap huge benefits from LucasFilm Company since it has acquired immense success under the leadership of one person.
It is worth noting that George Lucas has decided to sell his Company at will and not through some convictions. So Disney needs to structure the negotiation process to include the objectives of the owner. In most cases, the selling of a property involves many people to ensure transparency and accountability, as provided by the law in every country. Therefore, the owner welcomes bidders to mention the prices they are willing to pay in purchasing the asset. The person who mentions a higher price than others wins the bid typically. In our case, Lucas might have welcomed several other potential buyers. As CEO of Disney, it is your turn to employ excellent negotiation skills that will ensure that you will the entire negotiation process.
To achieve immense success in the Entertainment industry requires a combination of skill sets that produces something the viewers likes the most. George Lucas is one of the people who are best talented in moving the crowds with the techniques he has been employing in the production of his films. With such methods, he obtained significant success in the production of Star Wars through his LucasFilm Company. For Disney to reach the stature of the Company, it will take a long time and massive investment of resources. Therefore, the acquisition of Lucas Company is the best idea to consider. The initial capital for running the Company is extremely low, considering that the Company had already acquired the licensing. The only expense that Disney will incur is the exchange cost as the law requires the exchange of a property to be legally executed through the respective legal authority.
You are about to meet Lucas for the negotiation deal. You Company has the potential to pay the price that Lucas announced in releasing the Company. The payment method, in this case, is bank transfer as it involves a significant amount of money. Before meeting Lucas, you must have met with Disney’s shareholder to talk about the purchase of the Company. In the discussion, shareholders might have decided to add some benefits to stay on top of the other competitors. You should relay the same information to Lucas during your meeting with him. The terms in the negotiation process should be adhered to, and the closing deal established.
Analysis of the Negotiation
At the end of the negotiation process, Walt Disney managed to purchase LucasFilm Company. This shows that the CEO of Disney company applied fair and effective negotiations skill in the process. For negotiation to be successful, the parties involved should consider the interests and objectives of each other. Another vital thing that helps one to achieve success in the negotiation process is the preparation before meeting the other party. During the day of the meeting, each party involved should observe active listening skills. In my opinion, all these techniques contributed to the success of the purchase of the Company by Disney. Research has been done to establish practical skills for negotiation. Therefore, having prior knowledge of such skills is crucial before you engage in any negotiation process to ensure that you avoid the shortcomings that may arise.
Negotiation is an excellent way of exchanging a product, property, or service. The deal between Disney and Lucas Company is a complex one that requires both parties to come together and discuss the terms of exchange so that at the end of the process, each party is satisfied. Conflict does arise in the negotiation process if each party would want to achieve the best out of the deal. However, this should not be the case as it should be a peaceful process. Conflict ensues where one of the parties gets emotional, and when this happens, likely, the exchange won’t be successful. It is, therefore, essential to avoids emotions in negotiation and disagree with the other party politely and convince him/her to accept your opinion.
People carry out negotiation process differently. This depends on the ability of the person to identify the state of mind of the other person. Whichever way the person chooses, he/she should avoid a word that may stir conflict. From the negotiation between Lucas and Disney Company, it is clear that both parties knew effective negotiation techniques. The process was prosperous and peaceful. Lucas released his Company to Disney, which in turn released the agreed amount, and the deal was closed. All in all, negotiation is an essential factor in every business. It is, therefore, crucial for every person to learn practical negotiation skills.