...Bankruptcy and Restructuring at Marvel Entertainment Group Chen Ziqiang Wu Libin Lin Yingshuai Deng Linli Lim Yihao 2011/11/29 1. Why did Marvel file for Chapter 11? Were the proble ms caused by bad luck, bad strategy, or bad execution? We think that Marvel filed for Chapter 11 mainly due to its bad business strategy. Three of its six business lines, Trading cards, Stickers and Comic Books started facing the decline in sales after year 1993. There were two main reasons for this decline: First, these businesses increasingly had to compete with alternative forms of child entertainment (mainly video games). Second, the decline in sales was driven by disappointed collectors who had viewed comic books as a form of investment and stopped buying them as company stopped increasing the prices. We believe that the company should have foreseen these events while performing a market research and forming a long-term business and financial strategy. The three unpromising business lines accounted to 61% of total revenues of a company in year 1995. At the same time, the company's financial strategy was based on highly optimistic business expectations and was not suitable for unfavorable turn of demand for entertainment products towards video games. Due to its high leverage (52%), the company was not able to serve all the debt in case of sharply declining revenues. It is obvious that the company did not anticipate the change in customers' preferences and was wrong...
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...Marvel Case Names: Markus Hesse, Hugo Feis, Joost Welzen & Eric Weijman Bad luck * Drop in sales due to strikes in professional baseball and hockey Bad strategy * There is no strategic response to the trend of new forms of entertainment (e.g. video games). Instead, investments are made in obsolete business like trading cards * Unsustainable focus on increasing the number of monthly titles and raising prices, which only temporarily yields returns from buyers who buy them for speculative reasons * Due to this strategy (focusing on speculative buyers), which means fancy covers and high prices, (also due to the changed distribution model), the Marvel comics do not longer appeal to the core readers. The very foundation of the business is therefore neglected * Rationale for the diversification strategy was a mitigate to cyclicality, but this clearly did not pay off. No clear evidence of alternative synergies between the businesses. Moreover, restructuring charges are substantial * Additional investment in declining trading cards business through the acquisition of SkyBox, while Marvel was already showing signs of distress * Drafting an unconvincing reorganization plan, which among others includes an additional acquisition (which raises new risk and debt in the short term). Selling off unsynergetic business units may have made more senses Bad execution * High leverage using overpriced shares as collateral. Given the this leverage in combination...
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...The Marvel case presents two very clear issues faced by the company. - Should Marvel expand the use of their library of characters, or stick with the characters they know to have been successful in past ventures? - How long can these proven-successful characters continue to capture the interest of the public enough to turn a meaningful profit? - Should Marvel expand their business model to include more capital-intensive ventures? - For example, Marvel’s characters are in movies, but Marvel does not produce these movies beyond screenplay contribution In 2009, Walt Disney Company acquired Marvel Enterprises for $4 billion. This business transaction answers the first question: Should Marvel expand the use of it’s library of characters? Yes, it should. The deal with Disney allows Marvel to take this chance with a near guarantee of success. Disney has proven time and again their ability to expand content via creative design and licensing. Marvel offers Disney an entirely new portfolio of characters (already successful due to the booming comic book/graphic novel industry Marvel built) upon which to apply it’s creative genius. Disney essentially acquired a “blank” canvas with 5000+ existing characters and story lines. With the help of Disney’s creative minds and knowledge of past successes/failures, the appropriate Marvel characters will be brought to life in the movie and toy industries, and will likely experience great success. This merger seems to be...
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...Marketing Strategy 8050 Marvel Enterprises, Inc. Case Writing by Xiaodan Dong February, 2008 Marvel Enterprises, Inc. (b) Why was Marvel’s turnaround so successful? Would you characterize that success as a fluke? Or do you view it as sustainable? Why? How? Marvel’s success is not a fluke because its business model is sustainable. Marvel’s new strategy monetized the content library by licensing characters for use with media products. During an era in which mass media is very important in people’s life, only one media tool, publishing, is not strong enough to expand Marvel’s influence to consumers. Comic books can target a very limited market, mostly composed of male teenagers and young adults from 13 to 23 years old. It is very difficult to expand this traditional market. After many years of development, this market has matured and is very stable. Meanwhile, people have been more exposed to movies, televisions, and video games, which more effectively influence people’s consumption behavior than do comic books. All these media modes are able to reach more consumer segments than traditional comic-book publishing. Marvel’s potential to develop increased dramatically when its market expanded to broadcast media. Other consumer products, such as toys, worked in conjunction with media products, these two kinds of products reinforced each other. Marvel’s market expansion developed in both a comprehensive and intensive manner. Marvel emphasized long-term value in its...
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...Marvel Enterprises, Inc. (b) Why was Marvel’s turnaround so successful? Would you characterize that success as a fluke? Or do you view it as sustainable? Why? How? Marvel’s success is definitely not a fluke and its business model is very sustainable. Because Marvel’s new strategy chose to monetize the content library via licensing characters for use with media products. In an era during which mass media is so important in people’s life, only one media tool - publishing is not strong enough to expand Marvel’s influence to consumers. Comic books can only target a very limited market that most is composed of male teenagers and young adults from 13 to 23 years old. It is very difficult to expand this traditional market significantly. After many years development, this market has become matured and very stable. Meanwhile, people are more and more exposed to movies, televisions, and video games, which are very effective to influence people’s consumption behavior than comic books. All these media tools are able to reach more consumer segments than traditional comic-book publishing. Marvel’s potential to develop has increased dramatically when its market has significantly been expanded by broadcast media. Other consumer products, such as toys, work with media products reinforced each other. This market expansion develops not just in a comprehensive manner, but also in an intensive manner. Marvel emphasizes a long-term value in its new management. They plan career for each...
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...When Marvel had filed for Chapter 11 and bankruptcy they were truly In a time of hardship. In the mid 1990s, Marvel experienced sharp declines in both businesses, causing them to file for bankruptcy in December 1996. The problems were caused by a number of things, but I would have to say bad strategies overall being the biggest reason in which they had to file for bankruptcy. Marcel had six principle lines of business. Sports & Entertainment Cards, Toys, Children’s Activity Stickers, Publishing, Confectionary & Consumer Products and Licensing of characters. While continuing to run the company and trying to maintain operations constant, Marvel was not paying attention to the hottest means of entertainment that was trending; video games. Had they been paying attention to the industry they would have developed a strategy to enter this market. Also, the interest of comic books by consumers were falling sharply, which was another thing Marvel neglected to address. The new restructuring plan suggested by Perlman had three parts. First was an investment of $350 million by Andrew Group. Investments made by Andrew Group will relax the Cash flow position of Marvel. It will in turn increase its net cash reserves, after the acquisition of Toy Biz, by $33.5 billion. Next, as just mentioned was the acquisition of Toy Biz. Toy Biz is engaged in the business of manufacturing toys based on Marvel characters. It generates cash flows of approximately $60 million per annum which can be used to...
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...Marvel Comics Stan Lee Dominick White ASA College Miami On December 28 1922 a hero was born. The creator of some of the best comics and superheroes known today; Stan lee is the Godfather of comic books. With his trusty sidekick Jack Kirby they both played a major role in creating Marvel comics. Lee’s creative mind was responsible for creating the fantastic four the incredible hulk doctor strange and the most famous Amazing spider-man. He was fortunate to have a good up bring, go to college which allowed him to start his career as a young writer; and continue as comic book icon. Stan Lee is an American comic book writer editor publisher media producer, actor, and even television host. He is the former president and chairman of marvel comics. He has created many of the marvel's superheroes we know today. He is responsible for almost all the superheroes we know today, except for Marvels rival DC comics of course. Stanley Martin Lieber was born on in New York City to Romanian immigrants Celia and Jack Lieber. With part of his childhood spent during the Great Depression, Lieber and his younger brother, Larry, watched his parents struggle to make ends meet for the family. Lieber, who later shortened his name to "Lee" as a writer, went on to be hired as an office assistant at Timely Comics in 1939 and became an interim editor for the company in the early 1940s. Lee also served domestically in the Army during World War II, working as a writer and illustrator. Co-creating the...
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...Jess Jones Persuasive Paper: Marvel vs. DC November 3, 2015 One of the most controversial topics for teenagers and adults alike is the topic of which comic brand is better, Marvel or DC? DC and Marvel fans have been at each other’s throats since the 1950’s. “The battle between DC and Marvel is eternal. First it was in the comic shop, then it was on the Internet and most recently, it’s on the big screen (Lussier).” says Tsujihara. DC characters are better because their status is more realistic and attainable, they are more popular among the children, and DC characters work hard for their strengths and powers and use them for good. There are two categories within DC: the gods, such as Wonder Woman and Superman, and the iconic underdogs, such as Batman and Green Lantern. The gods are from another planet or universe and are normally the ruler’s child. They use their powers to protect their land. The underdogs are the favorite in any story and work the hardest. They are not born with any powers, but they want to help so they make a way. The underdogs are the people we look up to and admire the most. They are good men and/or women whom we strive to be like. Everyone looks up to Bruce Wayne because he is a good guy who wants to turns the bad events in his life into profit for others. Marvel literally has no characters that work for their superhero status. People love Marvel and support it and they wonder why their children do not want to work for what they get. Children start...
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...1. Why did Disney acquire Marvel? The acquisition of Marvel to Disney’s will add an unique portfolio of brands provides significant opportunities for longterm growth and value creation .The acquisition of Marvel will offer a similar opportunities to advance the strategy and to build a business that is stronger than the same of each company parts. The keys advantages of this acquisition are : 1. 2. 3. 4. 5. 6. 7. 8. 9. Product diversification and increase its business by taking benefit from theme parks to television shows. Reinforce the creativity and brand .( Producing films and brands that could generate sequels and spin-offs ) Introducing new product distribution over the world showing up in Disney’s stores Marvel products.( Consumer product : adding Incredible Hulk underpants and Iron Man lunch boxes ). Marvel has a great talent in movies creativities which Disney can not deliver with stories that appealed to teenage boys : So Disney is missing a segment which is important as a complementarity for its product. Marvel has a vast Library as assets of superhero more tha 5000 characters :Iron Man ,Increadible Hulk Thor … Increase Disney’s to gain a new consumers and capitalize the new preferences customers. Increase the geographically expand for Disney around the world which will help for a better growth of the firm . Marvel will have also a support from Disney profitability for funds to produce more movies and to be able to access to Disney organization and structure and experience...
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...Acquisition of Marvel The Walt Disney Company (“Disney”) is one the most recognized and powerful brand names in the entertainment industry according to Datamonitor 2007. This is their biggest competitive advantage, combined with the fact that they hold a strategic array of assets (world’s largest media conglomerate) that helps the company to fully-exploit characters. On the other hand, Marvel’s biggest competitive advantages are both intangible assets: their intellectual property (characters like Spider-Man, Hulk, X-Men, etc.) and their creative potential (development of new characters). With the acquisition, Marvel will now serve as a source of “raw materials” for Disney’s businesses (theme parks, cartoons, movies, toys, etc.) while Marvel will benefit thanks to the capabilities of Disney’s advertising. Now with Disney and Marvel combined, they have eliminated Warner’s competitive advantage of having a Comic Studio backwards integrated to their corporation, which guarantees a continuous flow of exploitable material (characters). Nonetheless, Disney holds a notable competitive advantage over their competitor: they are more diversified: they have theme parks, consumer products and interactive media. Currently Disney is facing some critical issues after the acquisition, and they are: - Marvel’s most famous characters are compromised to Disney’s rivals. - Some of Disney’s main characters are out-dated (Pinocchio, Mickey-Mouse, Donald Duck, etc.). - Marvel could lose...
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...Although many people assume that the creators of Ms. Marvel are depicting a rebellious teenage minority, I believe that they are showing a teenage minority trying to balance the pressures put onto them.Through the comic book Ms. Marvel, the creators argue that there is a lot of pressure on teenage minorities in America because they need to fit in with their peers while preserving their culture. Though the creators would assert that there are a lot of external pressures put on teenage minorities, they certainly acknowledge in their comic book that peer pressure is a factor. In other words, the creators are showing us that teenage minorities experience pressure to fit in with their peers. In the beginning of the comic, the creators show Kamala...
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...Case Analysis: Marvel Enterprises, Inc.__________________________________________ Marvel Enterprises, Inc is an industry leader of character-based entertainment, building its foundation on publishing comic books and licensing character rights over the past seventy years. After encountering some hardships in the late nineties, Marvel repositioned itself as a powerful global firm under the leadership of new CEO, Peter Cuneo. He developed a strategic recovery plan, allowing Marvel to overcome bankruptcy through the monetization of its extensive content library, long term development of characters, and the assurance of high-quality for all Marvel-related products. However, by 2004 concerns arouse regarding the sustainability and continued growth potential of this business model. Marvel needed to determine whether continuing their focus on popular characters was a sustainable strategy or if it was necessary to expand into lesser known characters to reach a larger audience. Cuneo also wondered if Marvel should venture past is current business operations to invest in content creation, rather than licensing the rights to others to do so. Marvel is currently competing in a red ocean, attempting to exploit existing demand and outperform its rival competitor, DC Comics, vying to obtain a greater market share. In order to do this Marvel should consider creating two divisions of character development. The first will focus solely on maintaining popularity and profitability of well-known...
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...The Marvel and DC franchises are two of the most popular comic book and movie companies. Being rivals has made choosing a side very difficult. With countless comic books in their past, but eventually, every fan must choose a side. The story of mythical heroes with extraordinary powers saving their kin from villains dates back to ancient history. The Greek Scribe Homer gave us earthly warrior heroes battling with one-eyed monsters and women with snakes for hair. In the Middle Ages, the enduring tale of a mythical hero was that of King Arthur, a man who wielded a magical sword to save his kingdom from ruin. These days, the average person might be hard-pressed to suspend belief in such gloriously bloody stories, but that hasn’t stopped us from telling tales in which Good is pitted against monstrous Evil. The most prevailing of these modern heroic tales have been the creations of storytellers whose medium is the comic book, and in turn, the film industry. Today we’ll compare two of the champions of the comic book genre, in this episode of The Infographics Show, Marvel vs. DC. First we’ll start with an introduction to DC, which is often hailed as ‘the...
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...Bankruptcy and Restructuring at Marvel Entertainment Group 1. Why did Marvel file for Chapter 11? Were the problems caused by bad luck, bad strategy, or bad execution? What is the amount of debt of MEG (the operating company) and the Marvel Holding Companies (Marvel owners)? The Chapter 11 bankruptcy provided an opportunity for all the major stakeholders to evaluate their options regarding their investment and control of Marvel. Bankruptcy alleviated Marvel’s immediate cash shortage, protected it from creditors and some litigation, and provided Marvel with a ‘fresh start.’ Bad strategy: Diversified youth Entertainment Company Bad execution: Overpaying for acquisitions There’s a combination of bad strategy and bad execution caused the problem. First, Perelman attempted to “expand the industry pie” and decrease marginal costs, which instead only worked to distract Marvel from producing quality product. Besides, Perelman showed a poor judgment in several acquisitions aimed at building Marvel into an entertainment empire but which only further distracted the company and paid more than he could earn from the acquisitions At the year 1996, there are more than 70% debts at Marvel entertainment group. The public debts issued by Marvel Holding Companies are 47.2% of the old shares and 9.1% new shares by the time reorganization plan 2. Describe and evaluate the proposed restructuring plan. Will it solve the problems that caused Marvel to file for chapter 11? The...
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...In the article, the last few paragraphs were most engaging because the writers twisted Marvel movie themes around in a way that the general viewer would not expect. Actors such as Chris Evans and Chris Hemsworth are sex symbols in of themselves, but recent movies depict them as super beings who do not seem to need relationships. Furthermore, this emphasizes the “dangerous message” that relationships hinder people’s ability to perform their duties, whether that be fighting supervillains or protecting the world from alien invasions. By pointing out the fact that superheroes give up their need for love and relationships for the “greater good,” the writers reinforce the observation that the Marvel movies portray the characters in an unrealistically...
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