MARVEL ENTERTAINMENT, INC.
Marvel Entertainment, Inc. began in May 1933 from a company that only had one stint to release their publication. So they merged with Toy Biz Inc. to expand their market and to use leverage to increase sales and profit.
Using its enormous library of 5000 characters, they set sailed in the different industries through publishing and licensing. They even expanded more market coverage in terms of film production, dvd, on-line series and in gaming platforms. Marvel was able to provide consumer products so massive with top of the line characters that are well known worldwide, the business includes the following markets:
They have 3 Segments in distributing their products and these were:
- Theme Parks
- Toys and Merchandise
- Animated Television
- Direct to DVD Live Action and Animation, DVD/Blu-Ray and On-Line Series
- Comic Books and Graphic Novels
Explore the background to change affecting the current organization
Change is defined as any alteration that should give the structure of an organization to be stronger and consistent. Implementing change should also be clear, guided properly, consulted and analyzed in order for it to be effective and adaptable to all affected like people, technology, economy, industry and in competition.
We must see it as something that will be continually force development and improvement in the organization and how it affects our daily lives. Failure to do so, will lead to further sinking of the business leading to loss in money, manpower, machinery and materials.
The recent change for Marvel was for them to merge with another entertainment business giant Disney. To meet the challenges of both internal and external sources of change, here are some of the factors that affected the organization:
In Marvel, the company has made a lasting impact on doing projects being implemented in the 3 segments mentioned earlier.
As part of a big organization, an entrepreneurial mind set has been manifested in the company’s workforce including providing bigger and better projects to capture a wider scope of audience and at the same time accepting failure and criticism especially through Films and in the Publishing sectors.
Since Kevin Feige took over Marvel Studios as President which focuses on Film Production, he and Marvel had jump started the superhero trend for the new generation of viewers! With his initiative to produce such films as “X-Men” Trilogy, “Spider-Man” trilogy, “Fantastic Four” films and the recently outstanding sales from movies like “Iron Man” and the “Incredible Hulk”, this undertaking even garnered corporate strategy upgrading in covering more grounds in marketing these characters.
Furthermore, its films for the next few years will be leaps and bounds since they have acquired a certified box office studio house from Pixar Disney, it will be a tremendous opportunity for Marvel since it has slumped on the animated projects on both tv series and straight to dvd films. Pixar’s talent and manpower can alleviate this segment further. Also, Marvel still gains access to big studios like Paramount, Twentieth Century Fox and Universal Studios with upcoming anticipated films like “The Amazing Spider-Man”, “Ironman 2″, “The Avengers”, “Captain America” and “Thor” in the next few years.
Its effect on Licensing and Publishing segments has manifested since there is more market recall, consumers are more inclined to buy these stories through publications and making family time more fun on purchasing merchandises and going to theme parks.
Marvel has given emphasis more on generating ideas and lives and dies by it. They just need to make sure that a specific undertaking creates enough momentum on the market specifically to the male demographic since mature, violent, and fantasy oriented storylines are being depicted and focused on.
The Workforce & Employee Attitudes
Employees in the company have worked in teams and producing each project, has their own specific agendas and targets to meet. In every segment there is something that needs to be contributed in order to make change work.
The most recent updates on this category is how former writers and artists are giving a huge impact on acquiring their works on Marvel mainstream of characters. To specify the people that made a huge impact, here are a rundown of names for both Marvel and Disney and how it affected the said organizations.
Jack Kirby – was one of the premiere artists that made a huge contribution in Marvel’s roster of characters in the 1930’s. He was one who made “Captain America”, “Thor” and “The Avengers”, “The Fantastic Four” and the “Silver Surfer”. His genius has brought the much profit for Marvel and sadly it was a one sided situation in terms of benefits which left him underpaid in spite years of intellectual property constraints. Today, his heirs are stopping any project that has something to do with Kirby’s initial works.
This only says how Marvel treats one of its pioneers in building a foundation for Marvel to grow bigger as an organization. This signifies how people can resist to change, and even they have contributed much on the organization they work with, they have been treated unfairly through a bureaucratic type of system.
Jim Lee – in the 1990’s considered as the artist of the decade, he catapulted Marvel’s X-Men comic books to new heights, he revamped the teams costumes, co-created a few more characters such as Gambit and Omega Red and even started his own series simply called “X-Men”.
He did sold a whopping $8 M copies, still considered the best selling comic book of all time (Comicbookdb.com, 2009).
But in spite the success, accolades and the good pay, Jim left Marvel to put up his own company in 1992 called Wildstorm Productions to start a new leash in life. His own genius has left him constantly in competition with co-artists and writers which favoued him more since he has accomplishments in every aspect of the business from being a penciller, writer, editor and even a Director so to keep it from declining sales, he founded a buyer from DC Comics and merged his works with the publishing giant starting January of 1999.
Steve Jobs – how can anyone not be familiar with the name? The late CEO in one of the most sought after marketing products of the century, Apple. Formerly a member of the Board of Directors of Disney‘s Pixar Studios.
Steve catapulted the Disney franchise into new heights and mostly well deserved success in Pixar, spanning so many films that made it into the box office. His direction and vision for the company has made one of the world’s most successful stories, enabling a buy out from Disney, it purchased Pixar for $7.4 bn and was the only biggest single shareholder of the company’s stocks by 7%.
John Lasseter – the story teller genius and makes everyone he works with excel in their own field, that is John. Considered one of the best in the business of computer animation, John has made his ideas turn into money and instant success such as “Toy Story”, “Monster;s Inc”, “Finding Nemo”, “Cars”, “Wall-e” and the most recent film “Up”.
These people have transcended the need for change and sometimes counter changes in the organization they work with because there is a reason to do so, not just to prove a point but to help understand the capabilities and capacities they have as employees and officers of the their respective companies.
It may be reasons for money, threats to status, feasibility for the proposed change, but one thing stays the same, it’s how people can make it work whether through perseverance or resistance.
Market Share and Competition
The only thing that remained constant in this category is the demographics of the fans for both the Marvel and Disney. Giving emphasis on market recall Marvel has made a huge impact on young male adults and Disney’s almost 360 degrees circle covering families, young females ranging from 1-30 years of age.
Both organizations have captured most of the consumers’ interests since way back then, their ability to make stories from characters have left a huge impact on the market’s imagination and surrealism.
Also, we need to consider Marvel’s biggest rival DC Entertainment which is under the wing of Warner Bros. Inc. they have recently for this new division for the company to expand projects as well more control on their characters as well. With the same concept of Marvel, DC Entertainment mission is to “strategically integrate the DC Comics business, brand and characters deeply into Warner Bros. Entertainment and all its content and distribution business.” (Outlaw, K, 2009)
Diane Nelson, the former head of Warner Premiere will be the new President of DC Entertainment. Bringing to the post her two decades of experience in strategic marketing, creative branding and content developing and production has helped the company to pull in millions of dollars for handling Harry Potter franchises and projects.
Government laws and regulations
The government as an entity gives so much influence on how companies and businesses cope with everyday operations. With this in mind, here is a sample on how the government gives what is due to the public and consumers.
In order for Marvel and Disney to complete the merging, they need to follow by-laws implemented in the stated contract that makes Disney as the sole company and making Marvel as its subsidiary. Also, for them to understand that the agreement of payment of both in cash and stock will be at $30 per share in cash and an additional 0.745 share in stock from Disney for each Marvel share they own. At the closing date on August 28, 2009, it closed out as $50 per share or $4bn in total.
This will seal and congregate the deal between the two firms and gradually make decisions onwards with regards to future projects allowing both parties to understand profitability expectations, budgeting, manpower and contracts to be signed for the joint licenses for third parties.
It is given notion that change can make or break even a stable company and nothing is exempted to the rule not even Marvel, since it filed its bankruptcy in 1998.
Ike Perlmutter was able to turn the tide in merging with Disney to house their 5000 library of characters from “Spider-Man”, “Incredible Hulk”, “Captain America”, “Avengers” and the “X-Men” to name a few.
Major highlights that affected the company was their Publishing house Marvel Comics, it has been finding ways to recover from on and off sales in the market. Here are some factors affecting the organisation for quite some time now:
- other publishers in the market
- redundant storylines
- talent shortage
Basically recession is everywhere and it deeply impacts on how businesses manages to recover from losses like assets, profit, employees, clients, customers the lists goes on. That’s why they find ways to make the organisation work and survive the crisis and one significant alternative is through merging.
Marvel was bought by Disney on August 31, 2009, by a staggering $4bn (£2.5bn) enabling big house names such as “Mickey Mouse”, “Winnie the Pooh”, “Snow White” to profitable characters such as “Spider-Man”, “Incredible Hulk” and the “X-Men” to name a few.
With that in mind, Disney has plans to put these characters in a joint venture on projects on television, theme parks and movies.
The two companies has the same business strategies, since the joint venture has covered all bases from both the male and female demographics which they can easily sell around the world in any type of media platform, third-party licensing agreements and other business opportunities.
Here, we will able to discuss and provide certain aspects of how Marvel have transcended into different industries that could help alleviate the third party licensees.
One example is through Hallmark, characters of Marvel can help synergize connection with people across countries and continents, with a vast global resources and locations, Hallmark’s joint venture with Marvel makes more business lucrative for both organisations, social expression products range from electronic, mobile messaging and Crayola (a subsidiary of Hallmark) arts and crafts products.
“Millions of consumers are passionate about Marvel movie and animated series characters,” said Karen Mitchell-Layton, Hallmark Vice President of Licensing.
“It’s important to Hallmark to provide meaningful products to help people celebrate and emotionally connect with each other.” (Marvel, 2009)
As defined, Bureaucracy is a type of management or administration that has a hierarchical type of implementation through offices and also having fixed procedures.
In terms of Marvel and Disney both are considered tall or boudaryless organisations that can influence the market and put up strategies that start from its Executive Officers down to the staff. Here are the numbers:
- Disney – 150000 employees across the varying business over 3 continents with over $37.8B turnover from last year’s profit.
- Marvel – employs only 300 staff with its domestic and overseas offices with $676M turnover last year.
Basically, the peak levels of both companies is that they have generated well known characters and has standed the test of time. Who does not know “Spider-Man” or “Mickey Mouse”? With these type of cultural background, it has a staying power and market recall that is very commendable for all stakeholders.
On the other side, they are very well known that competition is very rampant and wants to take over the best in the business. Other problems include employee retention and demand for their sales are set to have high expectations.
Through Marvel and Disney’s head executives, Bob Iger and Ike Perlmutter knew that merging these two giants would create better opportunities for business growth and expansion of both entertainment based companies.
Bob Iger as Chief Executive of Disney sees these merging as covering more ground on the young male demographic which they are trying to get back since they are more inclined in the female demographic which is the target specific of these themed characters.
“There are so many opportunities to mine both characters that are known and characters that are not widely known,” (Iger, B, 2007). On the other hand, Ike Perlmutter Marvel’s Chief Executive has more concerns on saving the company from further bankruptcy since it started in 1998. He has given Marvel to become more flexible in terms of channelling various markets.
Develop systems for understanding and involving others in the process of change
Bureaucracy is the main argument her for both the organizations, while focusing on their respective developments towards change. Both parties should understand how both management and employees can overcome the old policies and procedures which keeps on pulling them back in terms of progress.
Iger is said to have fast-tracked plans to cut Disney‘s corporate bureaucracy make it more friendly to creative people. This has to be a statement that needs backing up from the both ends. Now the case scenario would be handling Marvel the best computer generating geniuses from Pixar to enable market strength and dominance.
Thus by far, both have been making drastic changes that enable them to have more control over the other in terms of team development and functional and divisional system. Since a bigger organization is taking over, a lot of adjustments are being made in order to ensure corporate governance are manifested and implemented within the structures.
In Team Development, Wherein a few items were discussed earlier on how this will play out in the long run for both organizations. Factors in included are high rates of redundancy, maintenance of manpower and retaining them has been a struggle since they are very well known and competition for a post within the organization is really stiff.
For Functional and a Divisional System to work, the top management should look at performance and accomplishments are being implemented carefully to ensure business competitiveness and continuance.
While the other item mentioned above focuses more on the diversity of the systems used wherein there is much focus on what specific divisions can help to uplift the whole organization. Control over one division exerts too much pressure and conflict inside the system and thus making it difficult to maintain.
The objectives of the companies involved is more on managing with a sound structure and well adept Executives that can really guide people to the right direction in order to achieve a common goal.
This model signifies highly on how Marvel and Disney by joining together will be able to apply all things needed for the new organization to grow and expand the business, maintain and exceed in sales, deliver the best customer service and commit to the public’s interest and the market’s continuous patronage.
The first step is Unfreeze, this means that giving people in the organization to think about their future and relatively, make more progress by taking the next step on their careers and mindset to where the organization needs to go and to what direction.
The next step in Transition,in this phase, the momentum of an individual or the organization takes momentum and these elements should accept change and the progress in undertakes in order to know better how to cope up with upcoming problems the organization might face in the future.
Significant to Marvel and Disney’s merging is the question who will stay, who will be transferred to another department? Who will be the next Executive or Manager to take over the group? What are their plans? And How do we cope up with the new set up for the organization?
Lastly, Refreeze gives emphasis on when we get there we stay put and expand our roots for growth. In this case, Marvel and Disney has so many projects coming from all angles from film, tv series, merchandising. Expansion of the business in general will need people to do the brainstorming and focus group discussions on how will opportunities and threats will have to make these two companies work on it. It may take a while for it to develop and for progress to come into fruition.
But still, concentrating on the business will be the next thing to be a mind set for both employees and it upper management to pull through.
Business Process Re-Engineering
In this model, it is stated by Davenport, to actualize BPR the following approach must be undertaken:
- Develop the business mission and process objectives
- Identify the business process to be re-designed
- Understand and measure the existing processes
- Identify IT levers
- Design and build a prototype of the new process
With both companies having large manpower, outsourced offices in and businesses in a global scale, it is imperative to use this model in order for them to understand what situation they are in considering that there is competition, conflicts in the organization, excessive use of non-structured communication and gradual improvements in each division is important for them to be recognized.
So many questions are undermining an employee and also the Top management’s minds right now. But important thing is the step has been taken and though making that journey will be a difficult one, but the focus is t will be for the best and taking it positively and with pro-activeness will get the organization through the obstacles.
- To be able to revive market dominance in the publication sector. (main competitor is DC Entertainment, a subsidiary of Warner Bros.).
- To be able to produce better animation based films and series both direct to dvd and in television. To add, accessing to its own studios like ABC, Walt Disney Pictures, Buena Vista International and the like.
- Lastly is Pixar, Disney’s premiere animation studio will get them through with the current slump since it has produced box office films like “Cars”, “Toy Story”, “Wall-e” and the most recent “Up”Q.
- To get more profit from third party licensing, since Disney is more globally inclined in terms of business opportunities, Marvel will get a chance for more shelf space for merchandise across thousands of retails stores from Disney.
- To be able to capture more from the male demographic since Marvel’s library of characters are inclined to gritty violence, fantasy and are action based.
- To generate more revenue on their slumping Theme Park rides, we can see in the near future “Spider-Man”, “Iron Man”, “X-Men” and other characters from Marvel in Disneyland parks and other theme parks in the US, Canada, Europe and Asia.
To summarize, the given research from both organisations will need to adapt in a very competitive world and taking advantage of new resources, capabilities, capacities, manpower and pool of talent. Now at their disposal, these should give them enough contingencies to face the new challenges ahead and we believe that it’s all coming into fruition seeing the catapulted success of individual superhero films since 2008 from “Iron Man” 1 and 2, “Incredible Hulk”, “Thor” and “Captain America: The First Avenger” which will culminate into the ultimate synergy of all…”The Avengers”!
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