The Marvel Way: Restoring a Blue Ocean
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ARBUS 300 Case SubmissionNAME AND STUDENT NUMBER (as it appears on Learn): Misha Sajjad | 20719578CASE NAME: The Marvel Way: Restoring a Blue Ocean[pic 2] 1. When reviewing the evolution of the Marvel business model, where is there evidence of the firm experiencing a “red ocean”?When revising the evolution of the Marvel business model, the permanency of a “red ocean” was quite evident in the beginning. We see the business slowly plummet as the founder of Marvel; Martin Goodman decided to sell his company to conglomerate Cadence Industries who did not have a single idea about publishing. This led to them hiring Sheldon Feinberg, former CEO of Revlon, who believed in an unethical work method. Although Marvel produced high-quality comic books, “the lack of fair play” (40) caused the people to become lethargic, and the poor management caused Marvel to become surrounded with the dangers of the Red ocean. Sold to New World Entertainment, the business boomed and considering their lack of knowledge in arts; they turned to Wall Street where investor banker Drexel Lambert proposed to sell the business to corporate raiders, specifically his client Ronald Perelman. Expanding into trading cards and purchasing three companies including an Italian company called Panini, Perelman obtained “46% of toymaker Toy Biz” (41). With Perelman’s idea for raising the prices of comic books that contained one of five superhero cards, the buyers stopped their purchasing of collecting comics and the trading cards causing Marvel to drown in the Red Ocean.
2. When reviewing the evolution of the Marvel business model, where is there evidence of the firm experiencing a “blue ocean”?As the industry of comic books grew, the competition became tougher for Marvel, and its current bankruptcy. With a strategic vision, Toy Biz “majority owners” (42) Isaac Perlmutter and Avi Arad took Marvel under its wings and renamed it to Marvel Enterprises. Perlmutter decided to hire a “turnaround specialist” (44) Peter Cuneo, who commissioned Marvel’s several most traditional characters to Sony, Twentieth Fox Century, and Universal Pictures for exclusive movie rights. This strategy, however, brought in much-needed capital to Marvel in the form of “upfront payments and increased licensing royalties giving the company a breathing space” (44) to move in a vital direction. David Maisel, Hollywood veteran, suggested that Marvel produced its movies instead of licensing their characters and needlessly sacrificing massive profits. Perlmutter hired Maisel as the COO who was later promoted to Chairman of Marvel Studios, and with eighteen months of that vision, Iron Man was finally launched grossing $585 million globally. Marvel Studios decided to move to California above a car dealership and work their creative minds off. The buyer group of the movies was mostly people who enjoyed storytelling and relate to the character. By reducing the cost of production with lesser known actors and car chase scenes, Marvel produced a much realistic cinematic experience while bringing in blooming profit.