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Marvel Entertainment Analysis

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Haneen Mahajneh

on 23 January 2014

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Transcript of Marvel Entertainment Analysis

Story of Marvel Entertainment
Comics
 is an artistic medium in which images incorporate text or other visual forms of information in order to express a narrative or idea.
The Marvel Entertainment Group, Inc., is the largest American publisher of comic books. The company got its start during the Depression and grew rapidly during the 1930s as Timely Publications.
Marvel owns 40% of US comic books business. DC Comic, its eternal rival has 32%.
Today Marvel of through licensing is incredibly profitable, each of its employee generating roughly $1 million revenue a year. Today the comic books business represents only 20% of Marvel revenue, the rest is licensing : movies and toys.
The company publishes comic has created approximately 5,000 characters ranging from Spider-man and X-Men, the Hulk, to Blade and Black Panther.
Introduction
Introduction Cont.
Our mission to expand enables our legends like Thor and The X-Men to come to life in unexpected ways. To resonate with people today. And to evolve with generations to come.
Marvel Mission Statement
Marvel Products & Services
Marvel History
Marvel was founded in 1939 by Martin Goodman, as Timely Publications.
Sub-Mariner, the first issue of Martin Goodman was published, and reprinted the following month.
Captain America is introduced to the world.
Timely branched out from superheroes to humor, adding Comedy Comics, Joker Comics, and Krazy Komics, and various lines featuring funny animals.
In the wake of the war, the super-hero franchise weakened, and the comic book industry as a whole went into a slump.
Goodman decided to increase his profits by setting up his own national distribution system, Timely had been converted to Atlas Publishing.
Atlas faced Law suits suggesting that comic books were causing violence in society
Atlas' distribution operations had become a drain on income, and they were shut down.
Goodman was left with no means of distributing his comic books. In desperation, he made a deal with rival D.C. Comics, which agreed to distribute just eight of Goodman's titles a month.
In 1960s the company began to merchandise products that featured their images, such as T-shirts, board games, and model kits to capitalize on the popularity of its large stable of superheroes.
The official name becomes Marvel Comics.
Board of Directors

1. 8 board members: 2 internal members, 6 external members.

2. Board Contains various experts in their fields, and they're a highly active board.

3. Conflicts of interest include: joint CEO and Vice Chairman of the Board position.
Top Management

1. Isaac Perlmutter-CEO and Vice Chairman of the Board, held over 37% of Marvel’s common stock as of 2008.

2. Four additional corporate executives; possess skills required to successfully run Marvel, highly involved in strategic management process, well equipped to deal with future challenges
Corporate Governance
Corporate Governance
Thank You For Listening
Any Questions?

- Library of character– each character has a strong fan base.

- Relies on gifted individuals.

- Maintaining creative control of characters and brands.

- Licensing strengthens bargaining power.

-Calculated risk taking with introducing new characters.
Success factors
- Good customer relations.

-Bring in new readers by refreshing the popular character.

-Good distribution network.

-Cross sell through media relations.

-Diversity of strategies.
Success Factors .. Cont.
- Faced confusion as firms claimed rights to produce films with marvel characteristics.

- Perelman accused of helping to divert $553 million to his other companies.

- Worked to protect the most valuable company assets.

-The structure of content by comic book authorities.
Political and legal environment
- Online comic books in 2007.

- Digital comics online subscription service , providing high resolution Internet access and search capabilities to thousands of classic comic books.

- Graphic novels.

- Digital distribution channels , digital comics unlimited and digital videos, animated content, mobile games.
Technology
DC comics pushed technology beyond static digitized version of print materials by offering a hybrid of comic books and animations called " motion comics" – the first motion comic was the dark knight it could be downloaded from games consoles, and mobile phones
Technology... Cont.
- Expansion of leadership beyond teenage boys to:
* Romantic comics
* Female superheros
* Adult theme comics
* Manga- girl friendly

- Had 8 product lines that targeted different age groups and interests.

- In toys industry focused on 2 target markets:
* Boys 4-13
* Collectors 18-44
* Children footwear and bedrooms
Target Markets- Demographic
In 2009, commemorated its 70th anniversary, and The Walt Disney Company acquired Marvel Entertainment, Inc. for $4.24 billion It has been a  (LLC) since then.

With Marvel shareholders  to receive $30 and about 0.745 Disney shares for each share of Marvel they own

In 2010 Marvel Comics app becomes the first app of its kind

In 2011 :
- Marvel Television division is founded in March 2011.
- jointly publishing Disney/Pixar Presents magazine
2009- Now
In 2012 the first time a major group of Super Heroes have assembled in a feature film – the avengers.

Marvel discontinued its Marvel Adventures imprint in March 2012, and replaced them with a line of two titles connected to the Marvel Universe

Marvel announced its Marvel ReEvolution initiative
- Infinite Comics
- A line of digital comics, Marvel AR, an application software that provides an augmented reality experience to readers and Marvel.
2009- Now... cont.
"Today, we're the #1 comic publisher in the world, as well as a major player in the movie, consumer products, digital and television industries."
Conclusion
Marvel History
Marvel History
By the end of the 1970s, the market for comic books was reduced to an all-time low. Readers had lost interest in comics.

In 1980s Marvel began to target
different demographics
in the market, and began to use new distribution outlets including shopping malls. Marvel’s revenues continued to grow through character license agreements.
Marvel History
1988 Ron Perelman, through his Andrews Group and MacAndrews & Forbes holding companies, acquired Marvel from New World Entertainment for $82.5 million.


In June of 1991, Perelman announced that Marvel would sell its stock to the public for the first time.
Marvel History
Marvel History
In the spring of 1993, Marvel invested $7 million to buy 46 percent of Toy Biz Inc., a New York-based toy manufacturer.
Throughout the early nineties, Marvel completed a number of acquisitions to help distribute its products and services.
Marvel Mania was opened as a theme restaurant with servers in costume and menu selections with superhero descriptions.
MARVEL TRENDS
MARVEL SUCCESS
FACTORS
Weaknesses
Threats
Competitive Analysis
SWOT
Strengths
Opportunities
Licensing
Publishing
Films
Market Share
Market Growth Rate
Marvel BCG Matrix
14.7%
40%
Low
0%
High
50%
Middle
5%
Low
0%
Middle
20%
High
50%
Porter's 5 Forces- Industry Analysis
THEAT OF NEW ENTRANTS
BARGAINING POWER OF SUPPLIERS
THREAT OF SUBSTITUTE PRODUCTS
BARGAINING POWER OF BUYERS
RIVALRY AMONG EXISTING
INDUSTRY FIRMS
M/H
H
H
H
H
There is a possibility of new entrants in the entertainment industry. But it’s not very easy as there is a high competition in the industry.

Some employees may collaborate together to create a new product to compete, but getting a local or national distribution is challenge for them.
In 1997, Perelman was accused of helping to divert over $553 Million from Marvel to his other companies before the bankruptcy. the suit was finally settled when Perelman agreed to pay former shareholders $80 Million in 2008.
Financial Performance
Strategies
Window strategy
42.78%
2.7%
6.7%
1.7%
Source: ---. “Increasing global CRO market growth forecast.” Goldman Sachs Pharmaceutical Services. Sep 23, 2003.
In 1941 Captain America is introduced to the world. With the arrival of this character, Timely's comic books sky-rocketed in popularity.
Expansion Strategy
Had its own Distribution System (Atlas News Company)
Including Stickers (Panini), toy rockets (Quest) and small publishers (welsh publishing and Malibu comics).
Partnerships
Forward Strategy
Joint Venture
With Sony to develop Spiderman movie franchise.
Acquisition
Expanded into foreign markets and distribution channels and product line expansion :
- Comic book specialty stores
- traditional retail outlets
- subscription base
5 years master toy license with Hasbro to have exclusive right to make action figures, plush toys and certain play-toys also partnered with several companies like Sega for video games and Leapfrog for electronics.
2008
Licensing: 80% of revenues
205 m revenues
employees: 225
Licensing Publishing Toys
Net Sales 56% 26% 18%
Growth: 14%
"Our talented employees have been the masterminds of our success since 1939. And with your help, we can ensure that our future is even more amazing than our rich history, and that our characters' stories continue to be told in bigger, more innovative ways around the world."
Goodman sold Atlas, including the Marvel Comics series, to Perfect Film and Chemical Corporation, which was then re-named Cadence Industries.
Marvel was sold by Cadence to New World Entertainment for $46 million in 1986.
e-Comics Theft.
Economy Recession.
Substitutes Products.Intellectual Copyrights and Ownership.
Foreign Expansion- New Markets.
Modern Comics' Designs for New Segments.
Technological growth.
Long-term Licensing Agreements.
Lack of Marketing.
Weak Position in Foreign Markets.
Marvel is viewed as comics-only company.
Brand Recognition.
Corporate Culture.
Controls over Half the Market in the USA.
User-friendly Website and online services.
Has 8 Product Lines within 3 Main Segments.
Suppliers have a lot of power in determining price and quality of comic book paper.

In addition, they now are creating new outlets for the entertainment industry through technological advances.
The threat of any type substitute in the entertainment in industry is high.

Alternate sources of media, including video games, music, movies, or television shows are available many alternative magazines and news papers are also available.
There are many alternative entertainments and media to choose from.

Low cost of switching brands.

Buyers' preferences may change over time.
There are few similar size competitors (DC, NBC Universal, Warner Bros.) and industry growth is slow. And their products are similar to one another.
Full transcript