College of Business Administration
ASSE 4311
LEARNING ASSESSMENT III
ADMINISTRATIVE STRATEGY and POLICY
Marvel Entertainment
PART2: INTERNAL and EXTERNAL ANALYSIS
____________________________________________________________
A LIMITED LIABILITY COMPANY SUBSIDIARY OF
Submitted by:
Abdulrahman Al-Mutlaq 200901480
Abdullah Al Zahrani 200700660
Ghalib Al Hammad 200901806
1|Page
I. EXTERNAL ENVIRONMENT: OPPORTUNITIES AND THREATS
A. Societal Environment
a. Economic
1. Entertainment industry is fragmented into different market segments.
2. The global economic recession registered negative impact to Marvel Entertainment’s
operations.
3. People all over the world have particular and specific need for entertainment
regardless of economic condition.
4. Most consumers particularly children and pre-teen age groups are easily lured by
advertisement of characters through all forms of media.
5. Consumers loyalty to brand makes them pay the cost of the product.
6. Affordable products and services appeal to the economic condition of the market.
b. Technological
1. Entertainment is available in variety of ways including online, cell phone and other
platforms.
2. Sales in traditional formats dropped.
3. Recent technological inventions like tablets and Xbox.
4. Wide range of information technology in the industry
5. Innovation and more trendy entertainment medium are accessible.
6. Movies, films and other entertainment are all shown on television and on the net
7. Production employs high technology in creating digital image of characters.
8. Youtube is a very popular, effective and cost-efficient platform for advertising and
promotion.
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c. Political-legal
1. Entertainment industry is regulated through government censorship.
2. Entertainment companies are facing lawsuits from consumer groups for violent
contents of films and movies produced.
3. The threat of piracy and illegal licensing is imminent in entertainment industry.
4. The industry is lobbying for government law to protect intellectual property rights.
5. Parental guidance is necessary for the entertainment industry.
d. Socio-cultural
1. Entertainment industry is a powerful medium to reach consumers.
2. It has extreme influence on the community’s culture, beliefs and traditions.
3. It is a means of educating children and influences their well being.
4. Entertainment by any means is one thing everybody desires
B. Task Environment
a. Threat of New entrants
The possibility of new entrants in the entertainment industry is high. Employees
and key personnel who has gained experienced in the industry breaks away and
established their own entertainment outfit but getting a local or national distribution is
a challenge. Through the use of Youtube, they can easily penetrate the market.
b. Bargaining powers of buyer
Consumers have the power to choose any form of entertainment where they
enjoy most.
They have the ability to patronize or not to patronize an entertainment
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outlet. Consumers are sensitive to the entertainment value of the product or service.
Once dissatisfied you cannot convince them to try again, they will definitely seek other
forms of entertainment. Price can also be a factor. Bargaining power of buyers is high.
c. Threat of substitute product or services
The threat of any substitute in entertainment industry is high. It comes during
holiday seasons and is seasonal. Movie releases are timing during vacations and holiday
seasons. Entertainment comes in many forms and is competing with the limited money
of consumers.
d. Bargaining power of suppliers
Through advances in technology, suppliers are creating new outlets for the
entertainment industry. The winner is usually the company who has the most partners.
Leveraging through partnership tapping the distribution networks provide competitive
advantages to the competing firms.
e. Rivalry among competing firms
The entertainment industry is fragmented and a lot of products from different
companies are offered to satisfy the consumers need for entertainment.
Marvel
Entertainment, DC Entertainment, Sony Pictures Entertainment and Warner Bros are
the main players in the entertainment industry; each has its own distinct trademark.
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C. Summary of External Factors
A. Opportunities
1. Strategic Alliances- Marvel should continue to make strategic alliances, joint
ventures, and licensing deals.
2. Innovation- should make 3D movies and films
3. Online- products and services are continued to be offered online for easy
accessibility and wider market reach.
4. Product and services expansion- expand target market and try different segment,
like creating characters for young girls.
5. Takeovers- the company can ask a bigger and more stable company to take over
Marvel entertainment like Walt Disney Company.
6. Licensing- expand licensing deals to leverage global market opportunities
7. New business ventures- creating their own TV network like Cartoon Network and
create TV series for their characters.
8. Market development in untapped countries - penetrate and introduce the products
to countries where Marvel Entertainment has never been before.
9. Diversification- to minimize risk the company can venture into a different business.
B. Threats
1. Competition- strong multi-media competitors; Marvel Entertainment faces strong
competition from DC Entertainment, Sony Pictures Entertainment and Warner Bros.
2. Economic slowdown- the global economic crisis affects consumer’s buying behavior
decreasing sales of the product.
3. Piracy- copyright piracy is one of the challenges the company is facing nowadays.
4. Changing consumer taste and preferences- Marvel customers may seek other means
of entertainment.
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5. Price wars- the entertainment industry is vast and differentiated each competing for
limited market leads to prices wars causing the company’s sales to decline.
SUMMARY OF EXTERNAL FACTORS (EFAS)
EXTERNAL FACTORS
Weight
Rating
Weight
Comments
0.05
0.04
0.05
0.1
0.04
4.5
4.5
4.5
4
4.5
0.225
0.18
0.225
0.4
0.18
Intensify partnership
Improve design and creative story line
Increase licensing deals
Penetrate untapped Market
Utilize the opportunity
0.04
0.3
0.3
0.05
0.03
3.5
1.5
2
1.5
2.5
0.14
0.45
0.6
0.075
0.075
Innovate products
Consider pricing strategy
Intensify security
Research new trends
Consider production efficiencies
2.55
Not affected by the threats
OPPORTUNITIES
Strategic Alliance
Innovation
Licensing
Expansion
Diversification
THREATS
Competition
Economic Slowdown
Piracy
Changing Consumer Taste
Price Wars
TOTAL SCORES
1
6
II. INTERNAL ENVIRONMENT: STRENGTH AND WEAKNESSES
A. Corporate Structure
1. Marvel’s structure has a well defined roles and functions.
2. Follows a single line of command from the top to the bottom
3. Strong conviction to succeed and perform the objectives
B. Corporate Culture
1. Marvel Entertainment has developed positive and creative culture among its people
2. Total quality management prevails in the whole management.
3. Commitment and loyalty to company products
4. Remain united and focus to the company’s objectives
5. Creativity and innovative minds in working
6. Management and employee’s commitment to support to the company’s goals
C. Corporate Resources
a. Marketing
1. Effective, efficient and well defined strategic market plan.
2. Advertising is well supported
3. Spends millions for advertisements
4. Market surveys on viewership and box office tickets
b. Financial
1. Declining annual revenues
2. Company reserves are closely monitored
3. Marvel Entertainment has vast corporate resources
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c. Research and Development
1. Creative design is well funded by the company
2. On-going discoveries and testing on what characters the consumers will find
more appealing and interesting.
d. Operations and Logistics
1. Partnership with distribution networks
2. Products are sold to different production outfits.
e. Information System
1. The company subscribes to the availability of Information Technology
2. Utilizes the internet for advertising and promotion.
3. Has state-of-the-art imaging technology
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D. Summary of External Factors
A. Strengths
1. Strong Brand Recognition and Loyalty- Marvel is one of the most popular names in
entertainment industry. It has established fan base and loyal followers especially
the children and pre-teen age group.
2. Film production- Marvel Studios, the film segment of Marvel Entertainment, is set
up to independently produce films to increase revenues capitalizing on its popular
characters.
3. Asset Leverage and Cost advantage- the company’s nearly 70 years of character
history is an extremely valuable intangible asset that produces unlimited revenues
with little maintenance cost.
4. Portfolio of characters- Marvel Entertainment is one of the world’s most famous
character-based entertainment companies with over 8,000 popular characters
featured in various forms of media.
5. Licensing- the company earns toy licensing revenues through a deal with Hasbro.
Other licensing fees come from character use in consumer products such as clothing
and video games. Marvel Entertainment has only few comparable companies or
direct competitor because of the company’s licensing business model. The company
is the 4th leading licensor in the world at 5 billion in retail sales.
6. Publishing- through Marvel Worldwide, the company is the number one comic book
publisher with a 40% market share.
7. Box office success- each Marvel character based film have taken in an average close
to 400 million in worldwide box office receipts.
8. Competencies in Sales and Marketing Strategies- the company’s proven sales and
marketing strategies has driven sales volume.
9. Toy business- Marvel has entered a licensing deal with Hasbro for its toy business,
capitalizing Hasbro’s competitive advantage in this area.
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10. Capitalize Video Games Market- to keep up with the current trend; Marvel
Entertainment has entered licensing agreement for video games.
11. Worldwide audience- the company has a worldwide presence
12. Creative Writing – they have their own creative style of story writing, their Stories
are based on characters.
13. Online - products and services are offered online, a marketing and selling strategy.
B. Weaknesses
1. Limited target market- primary target market for its comic books has been male
teenagers and young adults in the 13 to 23 age group. The toy segment products are
aimed primarily at boys aged 4 to 12 and collectors.
2. Smaller than competitor- DC Entertainment, Sony Pictures Entertainment and
Warner Bros are bigger in size and operation compare to Marvel Entertainment.
3. Weak management team – the company suffered major setbacks because of
departure of key leaders.
4. Weak, damaged brand- many still viewed Marvel Entertainment as a comic book
company despite its adoption of new name. The company had been into bankruptcy
and has a damaged reputation.
5. Declining sales- sales has been declining
6. Fluctuating financials- the company assumes too much risk.
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SUMMARY OF INTERNAL FACTORS (IFAS)
INTERNAL FACTORS
Weight
Rating
Weight
COMMENTS
0.03
0.05
0.3
0.3
0.04
4.5
5
5
4.5
4
0.135
0.25
1.5
1.35
0.16
Popular and established
Exploit opportunity
Monitor the execution
Excellent opportunity
Maintain good performances
0.04
0.05
0.04
0.15
3.5
3.5
4.5
4.5
0.14
0.175
0.18
0.675
Study possible expansion
Increase production
Examine the root causes
Press release
Reputation buildup
4.565
Higher than the acceptable
level of 3
STRENGTHS
Strong Brand Equity
Asset Leverage/Cost Advantage
Comprehensive Strategy
Licensing
Highly innovative and creative
WEAKNESSES
Limited market
Relatively small in size
Fluctuating Financials
Damaged brand
TOTAL
1
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