Research Of Marvel Threat Of Bankruptcy

Problem Statement

Marvel is very narrow minded by putting its main focus on masculinity and age demographics. Marvel’s main target market was boys from the ages of 4-13 and collectors from the ages of 18-44, meaning that they were only attracting a very tiny piece of the overall potential market. Marvel Enterprises, being named as the number one comic book publisher and licenser in the United States and owning 40% of the comic books business there, soon began experiencing slower than ever growth in publishing. This is a great deal for Marvel Enterprises because their main sources of income were not only being generated from comics books, but also from licensing movies, toys, and video games which altogether accounts for 80% of revenues. Since the main focus were on males, and earnings by the company would be greatly affected by whether a boy liked or disliked the character. Not focusing on expansions and new market developments could lead Marvel Enterprises into yet another bankruptcy stage.

The focus on new themes, products, and service is at minimum, meaning that it would be very difficult to attract a new target market such as the females. Very little of the 8, 000 characters are actually seen as “superheroes” by the public. Poor marketing strategies and little to no effort in introducing new characters would make it very difficult to attract a new target market. Marvels focus on many brands may bring an issue to the company as opposed to just focusing on the main brand and branching out from there. Lack of introduction to new characters for other demographic groups will make it difficult for Marvel to expand into foreign markets and attain a higher market share of customers. This means the expansion above and beyond teenage boys into the female sector including romantic comics and female superheroes. Generally speaking, Marvels problem is being a house of brands, focusing on many of its popular male characters, and not on the single Masterbrand which can attract new audiences.

Stagnant growth is not seen since the target audience is too narrow by putting its focus mainly on male-focused superheroes due to gender biases as well as too much confidence into previous successes without diversifying its portfolio and focusing on the underdeveloped segment. The problem with this is the stereotype that exists with Marvel which can lead to a declining market in the future. The audience that Marvel attracts is very narrow, and more focus needs to be put into attracting a new market such as the female viewers.

Situational Analysis

Rivalry among existing industry firms

Marvel’s main competitors are DC, Warner Bros, and NBC Universal, and the products offered by them are very similar to Marvel’s. Due to the large fixed costs, it is difficult for a new firm to join the film industry. However, due to the low marginal costs, it is also not wise for a firm to exit the film industry because of the much greater upward potential. Currently, Marvel is experiencing slower industry growth compared to its competitors.

Threat of new entrants

Due to fairly high competition in the film industry, it would be difficult for new entrants to enter. New entrants may have difficulty capturing a slice of the pie in the market due to the big film companies capturing many customers. For new entrants, there would also be barriers due to the difficulty of distributing the product to a great majority of customers. One the other hand, due to personal tastes, many consumers might be interested in smaller films. Due to the advances in technology, amateurs would also be able to make their own movies. Threat of substitute productsThere is also threat of substitute goods due to the fact that there are most likely always cheaper alternatives and little to no cost of switching. For example, Netflix offers the same movies for a cheaper, one-time monthly charge which is lower than the cost of one ticket to the movie theatre. Due to the expensive and increasing ticket prices, consumers could well be switching to online movies and television watching. Renting a movie is also a substitute threat to Marvel. However, watching a film online is not the same quality, so many people will still choose the movie theatre which in general will reduce the risk of Netflix.

Bargaining power of buyers

As we know, in the entertainment industry there are many other alternatives media to choose from, and the low cost of switching also helps with that. Since customers do not have strong brand loyalty and their preferences may change over time, it makes it very easy for them to switch.

Bargaining power of suppliers

The power of suppliers in the entertainment and film industry is high. If the supplier produces goods, in this case comic books in great quality, then their power increases, which in turn increases their price. The power fluctuates depending on the skill of the supplier, meaning that good quality and good price will appear to the consumer. In Marvel’s case, famous actors and best equipment will play an important role in selecting the supplier.

SWOT Analysis

Strengths

Marvel has many strengths including brand recognition and brand loyalty from its consumers. This is due to the strong brand consisting of a wide range of successful products such as comic books, movies, and the licensing of toys.

Another strength is that their library consists of 8, 000 characters. Marvel controls 40% of the comic book market in the United States and has high movie turnover rates for its films. Marvel also uses various methods to distribute its products such as using giant retailers, shopping malls, as well as online distribution.

Weaknesses

Marvel has a very weak position in foreign markets/global positioning. Over 70% of annual revenues are captured from only one market (USA). Marketing skills are also at the bear minimum. Marvel is also viewed as a comics only company. Portfolio is mostly limited to “superheroes”. Due to the weak legal experience, the company is unable to fully protect its copyright and trademarks.

Opportunities

There are opportunities to expand into foreign markets. Opportunities to reach out to the female portion of the market for comic books. This means new designs and the introduction of female superheroes. Technological growth such as increasing the use of internet and partnering with other entertainment industries is also an opportunity. Long-term licensing agreements can provide monetary growth in the future. Events and theme parks set up can in turn increase amount of customers coming to the films. Producing more movies for different Marvel’s characters. Wide scale of characters that can be used to produce sequels.

Threats

The major threats are substitute products which could be cheaper and provide a higher benefit for the consumer. DC is a threat to Marvel if its growth rate increases faster than Marvels.

Another threat is many people using eBooks instead of physical copies which would diminish print publishing. Another major threat is e-comics theft.

Alternatives

First Alternative

The first alternative to help solve the problem to begin to gradually grow publishing’s is too put forth an expansionary policy. In Marvel’s case, this means expanding into foreign markets and other distribution channels. Diversifying geographically would bring in more customers. They need to market their product because currently Marvel is viewed as a comics only company. It would cost more, but it could potentially bring in more customers and be more profitable for the company in the long run. Since their brand is very recognizable, and they control over half the market in the United States, could mean that they will do a good job in international markets. Use talented employees and distribution channels to attack Asian’s markets by creating new oriental characters. They can try to leverage its franchises in a growing array of opportunities around the world, including features films, consumer products, toys, video games, animated television, direct-to-DVD and online. Use developed distribution channels to enhance the digital division. Create oriental characters and enhance online distribution to increase international market share. Move before competition to the Asian markets. Increase international market to allocate risks around the globe (in economic slowdowns especially). There is great interest in Marvel characters internationally. Marvel should explore creating international characters in other markets like Japan. Increase the publishing revenue from foreign markets. Licensing of international consumer product. Possibility of partnering with Japanese anime companies to create animating movies.

Second Alternative

Second Alternative would be to diversify the Marvel portfolio. Capitalizing on the most popular characters, but at the same time trying to focus on the lesser known characters. Only a handful of characters were given the title “Superheroes”. This gives the opportunity for lesser known heroes to grow popular and find a fan base. The creation of new characters can give Marvel the opportunity to gain more monetary value. This would mean that Marvel would introduce its lesser known heroes as opposed to always using its core heroes. This could be more profitable in the long run by providing growth potential. The building of Marvel Universe and introducing new heroes with known “superheroes”. We can see that each character has a strong fan base. They can also bring in more readers by refreshing the popular character. The characters’ stories should continue to be told in bigger, and more innovative ways. Use popular characters, talented staff to produce new movies’ sequels. Capitalize on the success of the existing movies to produce more. Ability to perform a strategic alliance, with animation company (like Pixar) that show interest in working together.

Third Alternative

They can build a theme park to attract for kids. This can help to capitalize on its characters’ popularity. Use finance and popularity to create Park. Use professional offices to manage the Park’s project. Creating Theme parks with Marvel characters. Expand in Europe, Asia, Middle-East, targeting the fans worldwide. Conflict with Universal, that hold a license for some of Marvel’s Characters in Orlando, Osaka, and Japan. Cannot use characters assigned to Universal studios. The need of enough capital.