Illumination just kind of crept up on Disney.
Disney has always been acutely aware of the presence of DreamWorks Animation and considered them to be their most formidable competitor. I think they saw Despicable Me to be a fluke success and that the studio was a one-trick pony. I think this holiday season is where Disney realizes that they have their most ferocious competitor to date.
Illumination is planting future flags all over the release schedule for the forseeable future near Disney's releases. Of course, we have Sing opening in just days to red-hot buzz within the industry and social media. Does anyone doubt that Despicable Me 3 will own next summer as far as animated films go? Does anyone think that their Christmas release, an animated Grinch That Stole Christmas, will dominate that holiday frame? To make matters worse, they do all of this at 1/3 to 1/2 of what typical Disney/Pixar films cost to produce.
Now...Universal bought DreamWorks and it will also be overseen by Illumination's Chris Melendri. Universal is also gunning for Disney's market share in the theme park business. Never...never has Disney had a competitor like this.
Edit: The cash-cow business of merchandising is doing spectacularly well also. They've owned it this year with SLoP alone.