Disney & Marvel Case Analysis

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Critics make fun of Disney’s acquisition of Marvel and while there are some potential constraints both to the individual companies and their union, the synergy of combining the world’s largest media conglomerate and the number one comic book in the nation outweighs theses constraints and will strengthen Disney’s overall competitive advantage. This union will allow Disney to both horizontally and vertically integrate itself, expand geographically and diversify who it appeals to as an audience. Marvel is the number one comic book company in the U.S. and has extremely high profitability. Even further, Marvel has vertically integrated into other operations by using its main competitive advantage, its popular characters, to create movies such as Thor and Iron Man, consumer products collectibles and much more. Marvel’s competitive advantage is clear in the profitability of its films. Marvel’s character based films grossed more than DC Ent.’s character based films by approximately 1.25 billion dollars. Constraining Marvel is that while they have highly popular characters many of them are already licensed to other companies. Disney may not be able to capitalize on these characters but they can receive revenue from these licensing deals. Disney being the world’s largest media conglomerate has a competitive advantage in its brand and its size. Disney’s size has allowed it to vertically integrate their operations so they can use their own studios to produce their own movies. They have amusement parks in which they can use their own characters and consequently strengthen their brand. Competitors like Time Warner do not have amusement parks. Disney can also handle their own merchandising and sales of consumer products. Even further, Disney has sizeable operations in movies, shows and television stations. A huge constraint on Disney is that they are a family brand, with the exception of their 80% ownership in ESPN, most of their other media caters to women and children....
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