Disney and Marvel: A Synergy of Epic Proportions

Disney and MarvelMARVEL ENTERTAINMENT, INC.

Company Profile

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:

 Licensing

  • Theme Parks
  • Toys and Merchandise
  • Gaming

Film Production

  • Animated Television
  • Direct to DVD Live Action and Animation, DVD/Blu-Ray and On-Line Series

Publishing

  • Comic Books and Graphic Novels
  • Interactive

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 organzsation 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:

Internal

Corporate strategy

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.

Kevin FeigeSince 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 with upcoming anticipated films like Spider-Man 4, Iron Man 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.

Marvel

Marvel UniverseJack KirbyJack 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 LeeJim 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 favoured 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.

Disney

Disney WorldSteve JobsSteve 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 LassesterJohn 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. John is the Chief Creative Director for Pixar and Disney Animation Studios and for Walt Disney’s Imagineering, he is the current Principal Creative Director. These people have transcended the need for change and sometimes counter changes in the group 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.

External

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 teams 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.

DC Comics

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 NelsonMeaning, all types and forms of distribution licenses whether film, media, tv franchises and other interactive platforms that can be covered will be instilled to ensure market dominance. 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 agreed as $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.

Economic conditions

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 it 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 Marvel 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 organization for quite some time now:

  • Competition and Market share
  • 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 conglomerate 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.

“Disney should be able to leverage its global reach, execution, and distribution capabilities to grow Marvel’s brands and business opportunities.” (DiClemente, A, 2009)

With that in mind, Disney has plans to put these characters in a joint venture on projects on television, theme parks and movies.

The Avengers Cast

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 organizations, 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 boundlessness organizations 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.

Bob IgerThrough 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 channeling 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.

The systems and stakeholders that can be implemented in Marvel and Disney are more direct to employees and the corporate executives.

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 teams. 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.

Sweven DwarfsWhile 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.

Unfreeze-Transition-Refreeze Model

This model signifies highly on how Marvel and Disney by joining together will be able to apply all things needed for the new company 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 company 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 its upper management to pull through.

Business Process Re-Engineering

With this new concepts and target specific to computerization and new media platforms and technologies, Marvel and Disney may have been one of the best conglomeration of two media based giants.

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

Marvel StudiosWith 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.

Marvel and Disney merged because of these reasons:

Marvel

Walt Disney Studios - Buena Vista Street

  • 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.
  • 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.

Disney

Disneyland Park - Anaheim, CA

  • 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 organizations 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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