Introduction
Marvel is among the most well-known studios focusing on all types of products, from comic books to movies. However, its fate did not always include massive success and popularity. While being successful at the beginning of its existence, it faced major issues that nearly led it to bankruptcy. As a result, while Marvel faced many struggles, it was able to gain financial health and prosperity again with the approaches of the new leadership team.
Problems/Issues
Marvel is a company that has existed for almost a hundred years, focusing on creating a universe of superheroes, including comic books, toys, cards, and a film studio. However, during its existence, the corporation has faced multiple issues. The first issue is the change of management, which took place in the 1980s (Chan Kim et al., 2021). As a result, value extractors acquired control of the company, severely misaligning property, revenue, and employees. This issue led to the filing of bankruptcy (Chan Kim et al., 2021). Another significant issue that Marvel had to deal with involves increased liability. Marvel had to pay hundreds of millions in debt annually, and their cash flow was problematic (Chan Kim et al., 2021). Such a financial burden led to licensing many of their movie rights to third parties. Thus, the main problems of Marvel involve debt, which stems from unprofitable business operations and poor management.
Possible Solutions
Among the possible solutions are two cut unprofitable business operations and redo organizational structure. The unprofitable business operations might involve card business, comic books, and toys. According to Marvel, it “did not break out revenue or profitability for the trading card business separately from the toy business in 1998” (Chan Kim et al., 2021, p.6). Therefore, focusing on comic books, trading cards, and toys can involve a bigger risk due to emphasis on specific customer groups of a certain age range. As for the studio, Marvel mentioned that its goal in terms of a film studio was to increase the demand and popularity of its characters and movies (Chan Kim et al., 2021). Moreover, it can be useful to invest more money in the production of new movies and the introduction of new characters.
Considering the rise of social media and the film industry, Marvel can benefit from the promotion of new movies and characters. Another possible solution for the debt issue is management change, which can lead to a decrease in financial burden and a solid organizational structure. The company might need a more experienced team of professionals who will change the corporate culture and financial approaches that will focus on strengths and opportunities rather than point to weaknesses and threats.
Recommend Solutions
After reviewing possible solutions, the recommended one would be cutting less profitable businesses, such as trading cards, comic books, and toys, and focusing on the production of films. In the technological era, this can be a useful approach since streaming movies through platforms like Amazon Prime Video, Apple TV, or Netflix can be possible. Moreover, it will be possible to release movies in movie theatres. Therefore, there will be less focus on risky business operations and more emphasis on strengths and opportunities.
Expected Outcomes
Hence, the expected outcome of such recommendations and their application is the increased revenue that will stem from the focus on the promotion of the studio and its movies. Moreover, there can be less debt in Marvel’s case since bigger revenue will lead to higher income, which will allow Marvel to rehabilitate from debts and then start investing money in research and development. Therefore, such a recommendation can lead to a stabilization of Marvel’s financial health.
Reference
Chan Kim, W., Mauborgne, R., & Olenick, M. (2021). The Marvel way: Restoring a blue ocean [PDF]. Web.