The Marvel Way: Restoring a Blue Ocean

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1.      A competitive strategy is considered a long term plan devised by an organization after review and examination of the strengths and weakness of other companies with similar product with the aim of achieving a competitive advantage. This may involve actions to attract more customers, improve the company’s market position, and withstand the pressure of competition in the market. In the case of Marvel, this strategy never applied in ensuring its success; the company had never make effort to compete it major competitor, DC comics but rather sold its distribution arm and certain books to DC. The company’s unique strategy that had seen it succeed is the leadership and innovative strategies. Isaac Perlmutter and Avi Arad from Toy Biz joined the company and introduced a well-structured leadership strategy that could see the company recover from bankruptcy. Instead of developing a competitive strategy, the leaders structured the business into five major brands including comic books, trading cards, toys, character, and Marvel studio in which the company characters could motion pictures. They also came up with unique ideas including focusing on upcoming talents, reducing the leadership chain, and using limited space in order to reduce costs. These attempts made the company to recover its losses. Additionally, rather than adopting the red ocean (competitive) strategies such as differentiation and cost reduction, Marvel’s success is associated with blue ocean strategies.

2.      If Marvel decided to higher top-tier movie stars and well known directors, the company would have still made same revenues they obtain from the less-known actors. In the case study, Cuneo claimed that the strategy of the company was to consider new characters who had similar fine talents as the movie stars. He states, “We though the heroes, the stars, were the characters and there were many fine actors who could play these roles and we did not need to pay expensive talents” (11). Marvel ensured that the directors and the actors considered were as talented as the known heroes. As such, the performance of the company could have still been the same. In addition, since star actors demanded a lot of money which the company never had at the moment, considering such talents could have resulted to further bankruptcy of the company.

3.      Marvel broke the value/cost trade off in its attempt to make success because it created value to customers at a reasonable (low) cost. Instead of compromising the value of the services and goods the company produced with the limited finance available, Marvel ensured that the films and books produced met the demands of the consumers. This could be observed in the sales made; in 2015, movies sold made $21.7 billion compared to its competitor, DC-based movies which generated only $5 billion.

4.      Value innovation is a blue ocean strategy principle that focuses on identifying unexploited market spaces that are yet to be identified by key competitors. Value creation, on the other hand, refers to the process of manipulating the competitive market functions with the aim of taking value from stakeholders within or outside the corporation to experience growth. In the case study, the use of value extraction strategy had been adopted by Pereleman who adopted low quality, high pricing, and underperforming acquisition techniques to get more profit. This could offer short term benefits including short-term profit maximization, short-term capital markets, and excessive short-term pay for top managers. However, in the long term, value extraction results in bankruptcy, oversized parasitic sector, and financial losses. Value innovation had been adopted by Isaac Perlmutter and Avi who considered the need to identify a new market niches, and exploit unique talents rather that the expensive movie stars. This has long term benefits including reduced competition in the industry, growth of revenues, and the establishment of new ventures.

5.      Marvel’s noncustomer targets were college students. The company decided to produce comic books that involved post-adolescent escapists with the first one being Village Voice in 1965. With this new target market, the company was able to make profits including selling over 35 million books each year and inspired more than 500 fans every day. In 1967, the company sold six million books each month to serve the identified market niche.

6.      The Strategy Diamond had been created by Fredrickson and Hambrick to show the key pieces of strategy that must be put in place and integrated in order to observe success. Arenas refer to the choices that a company makes in regards to competition including the product, service market, or geographical location (Rothaermel 12). In the case of Marvel, the company decided to identify a noncustomer niche to enhance its competitive advantage. The products and services have always been sold worldwide thus enhancing the profit margin. Differentiators are the factors allowing a company to “win” or become successful in its target arenas (Rothaermel 13). These may include price, imager, and reliability. Marvel Company has always been reliable in its production of films and comic books. Accompanied with fair prices, the company manages to observe growth. Vehicles are the drivers towards achievement of company’s goals (Rothaermel 15). These may include the type of licensing, development processes, and types of ventures. In the case of Marvel, the company has a joint ventures with various companies, and operates through licensing. Staging and pricing entails the speed of strategic advancements made by a company. Marvel has a well-structured plan to identify its decision points; it first broadened its product arena before broadening its geographical arena. Economic logic reflects how all the other elements are integrated to satisfy key stakeholders. Marvel has ensured that all the five strategies including arenas, differentiation, staging, and vehicles are integrated to promote growth.

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