Table of Contents

Table of Contents...................................................................................................2 Current Situation ...................................................................................................3 Current Performance...........................................................................................3 Mission Statement...............................................................................................3 Objectives........................................................................................................... 3 Strategy.............................................................................................................. 3 Corporate Governance .......................................................................................4 Internal Environment ............................................................................................4 Strengths............................................................................................................ 4 Weaknesses........................................................................................................ 6 IFAS Table........................................................................................................... 9 External Environment...........................................................................................10 Opportunities....................................................................................................10 Threats.............................................................................................................. 10 EFAS Table........................................................................................................ 11 Porters 5 forces ...............................................................................................12 SFAS Matrix..........................................................................................................15 Conclusions & Recommendations ........................................................................16 Sources................................................................................................................19

Current Situation
Current Performance
Marvel Entertainment is an American entertainment company, formed from the merger of Marvel Entertainment Group Inc and Toy Biz Inc. The company is famous for its superhero characters. Well-known characters include Spider-Man, X-Men, Fantastic Four, Iron Man, the Incredible Hulk, Captain America, and Ghost Rider. In 2008, the company divided its operation into three parts: Publishing, Licensing, and Film Production. The publishing segment created and published comic books, trade paperbacks, custom comics, and digital comics; the licensing segment directed the licensing, promotion, and brand management for al Marvel characters worldwide; the Film Production segment plan to make self-produced feature film based on characters which had not already been licensed to third parties.

Mission Statement
With a library of over 5,000 characters, Marvel Entertainment, Inc. Marvel's operations are focused on utilizing its character franchises in licensing, entertainment, publishing and toys. Areas of emphasis include feature films, DVD/home video, consumer products, video games, action figures and role-playing toys, television and promotions. Marvel will keep trying to leverage its character franchises in a growing array of opportunities around the world.

Objectives
Marvel's objective is growing through operates in the production of toy manufacturing operations, licensing, and publishing of their famous characters. The company publishes comic books of superheroes primarily for their young male readers. Moreover, the company licenses its characters to industry giant for the use in consumer products, from movies, television programs and video games to toys, electronics, footwear, and collectibles.

Strategy

Marvel pursued a strategy of focusing on licensee relationship with fewer, larger licensees who demonstrated superior financial and merchandising capability. Marvel's expanding digital distribution strategy was used for operating across segments with Global Digital Media Group. Furthermore, Marvel also completed a number of acquisitions to expand into other areas, such as manufactures of trading card, toys for their famous character.

Corporate Governance
The board of directors in Marvel Entertainment has plenty experience on managing company staffs. They are leaded by the chairman of the board of directors, Isaac Perlmutter, who was a director since April 1993 and served as chairman of this board of directors until March 1995. These old directors have or had a number of other businesses in all areas out of Marvel Entertainment. As we researched on the Internet, the Board of Directors held eleven meetings during 2006. Each incumbent director attended at least 75% of the aggregate number of Board of Directors meetings and applicable committee meetings during the year. The Board of Directors committees include the Nominating and Corporate Governance Committee, Audit Committee, Compensation Committee, Film Slate Committee, and Strategic Planning Committee.

In 2008, Perlmutter is vice chairman of the board and chief executive officer in the company. His total compensation and Maisel David, executive vice president of Marvel Studios, are the top two among all directors and corporate officers. All of these directors and executives have certain periods working and serving for Marvel Entertainment for decades. They deserve to lead the company and make decisions for companys shareholders.

Internal Environment
Strengths
Ability to stay relevant

Having more than 5000 characters, Marvel succeeded in creating relevant characters that were suggestive to real people, with real situations, in the real life. This enabled Marvel to retain the attention of old aged readers,

while attracting new ones over time. This strategy empowered them to target more age groups. This capability to meet the demand for all target groups since 1939 is definitely one of the main strengths that kept the company so successful on the long run, and that created brand recognition all over the world.

Strong brand awareness

Marvel managed to generate an international trend through its main characters (X-men, Fantastic 4, Hulk, Spider-Man, etc.), their marketability and their strengths. These strong characters were actually Marvels marketers. With innovation and inspiration, Marvel managed to shape super-heroes that would have a great appeal to the readers in no time and insuring this appeal on a long-run. These aspects assured them the spot of industry leader with a market share of 40%. Good management of their distribution chain

Marvel managed to expand their distribution channel in such a manner that they would reach all their target groups. The decision of the distribution centres was also made so that they would create more brand exposure. Their comic books were distributed through comic book specialty stores, traditional retail outlets (bookstores and newsstands) and on a subscription basis. Furthermore, Marvel extended their reach of new readers through internet integration, on-line comic books and motion comics.

Full vertical integration

The decision of producing their own films was definitely a choice that has boosted not only their revenues, but also their brand recognition globally. Marvel generated from Marvel Entertainment Inc. 5.5 billion dollars in 2007, making it a cash cow. This decision provides them better control and greater flexibility in respect to the release timing.

Strong licensing relationship

The licensing relationship helped Marvel to extend their brands in other industries as well, which was again great for their brand recognition and for increasing their customer reach. Early the licensing segment delivered over half of the companys net sales in the year. Strategic partnerships with experienced companies, such as Hasbro for the toy industry or Hallmark for party supplies, were key success factor for Marvel to meet their reach and further extend it. Furthermore, expertise form the partners was useful for Marvel since it was new in the segment. Innovative spirit

The executive management of Marvel could be considered doing well in keeping up the innovative spirit of the company. Huge focussed in placed on not just looking for new targets but also, to keep their existing offers still relevant to existing customers. With this operational strategy, Marvel was able to nurture a wide range of customers. Marvel was constantly looking for new ways to increase costumer experience, for instance, the company opened the Marvel Mania as a theme restaurant appealing to younger generations where its famous characters where exhibited. Maintaining such wide range of customer base is very strategic to profitability and maintaining leadership position in the industry.

Weaknesses
Lack of stars in their business portfolio

The company is heavily relying on their current cash cows and they havent come up with a new brand/character in a long time now. Even though their current brands are strong and provide new business opportunities and thus, big revenues, the company might run out of cash cows on the long-run.

Poor Stakeholders Management

Due top the fact that, marvel could not manage it stakeholders properly, the firm ran into disputes not just with its former employees, but also with its freelancers. Dissatisfaction amongst these stakeholders could directly or indirectly affect the firm negatively. For instance, even though former employees do no more play any active part of the company, however, they could still act ambassadors of the company. Leaving the company with a negative feeling and attitude could result to bad words of mouth with could in turn affect the reputation of the company. Also failure to cultivate good relations with writers could affect the companys productivity due to it high dependence on freelance writers. For instance, such mismanagement of stakeholders led to a 100-day strike in 2007-2008 of the writers Guild of America, which significantly slowed down production progress. Poor implementation of its licensing strategy

Although most of Marvels growth is coming from licensing, the companys lack of adequate and clear licensing rules could compromise this strength to reduce efficiency. Confusion amongst licensing partners implies lack of clear licensing strategy which could increase the chances of dealing with conflicting partners. Such grey areas could lead to some serious problems

in the longer term. Such problems could be fallout with important partners and even brand dilution. Risky financial performance

The financial performance of Marvel Entertainment Inc. is performing unsatisfactorily. The company has unstable, fluctuating revenues. The main volatility is generated through the volatile licensing revenues. In addition, Marvel has a vast increase in its non-current liabilities due to the expenditures in film facilities. Hopefully this investment will bring sufficient profits to Marvel Entertainment Inc. Yet the facts is what an analyst should look at, and facts say there is a high level of risk caused by the large investment in film facilities. Due to it, the vulnerability of Marvels financial situation is getting unstable. The debt to equity ratio in 2007 has reached 60 percent which is the realistic limit of safety. Any higher value means that a company has been aggressive in financing its growth with debt. This can result in volatile earnings as a result of the additional interest expense. The whole risky picture is accompanied to low rate of return. Each of the factors is reviewed separately below for more details. Volatile licensing revenues

The impact of revenues has a crucial effect to a companys performance. Not many people would be interested to invest their money in an insecure and highly volatile instrument. If they still want to do so, they expect a very high rate of return. That is actually how Marvel won its investors. They accumulate a return on sales of 26 per cent in 2005. Yet in 2006 the high volatility has rounded up their return on sales to just 17 per cent, which is still sufficient but not as much as expected from investors in the previous period. Then in 2007 is observed a new peak of 30 per cent. If investors looked at the Return on Equity ratio, things are much worse than expected for that risk. In fact Marvel should wonder who has decided to invest his or her money in the company. A share price in 2007 should cost around 19 dollars. Yet the return that investors receive is around 9 percent. The share price in 2006 was a bit higher, close to 20 dollars according to a simple calculation from the case, and its dividend was around 3 per cent. Simply Marvel performs poor, in fact below the industrys average.

One of the main reasons for the volatility was the revenues from licensing. In order to make a more obstinate research, should be reviewed the values of prior years than 2005. Based on 2005 to 2007 information this is what could be concluded. Immense increase in non-current liabilities

The large increase in non-current liabilities is caused by the large investment in film facilities. After a year of poor performance it is very brave to make such a large investment, yet it turns out it has partly repaid, since the income in 2007 is 30 per cent compared to just 17 in 2006. Increasing debt to equity ratio

2006 = 369000/938000 = 0.4 2007 = 636000/1077000 = 0.6 Values are in thousands

These are the debt to equity ratios for 2006 and 2007. As it can be observed from the financial instruments, Marvel has financed all its expansion by debt, which is improper. Despite the repetition, lets sum up once again: it result in volatile earnings as a result of the additional interest expense. Goodwill

Goodwill is seen as an intangible asset on the balance sheet because it is not a physical asset such as buildings and equipment. In the early 2000s many firms have artificially inflated their balance sheets by reported excessive goodwill value. During the years International Accounting Standards were introduced to evaluate goodwill properly. The problem of Marvel probably, is not artificial goodwill creation, the problem is that all those comics heroes that they created and assigned a high market price to them may be practically non-sellable. Simply imagine you have a retro car whose market value is high, since it is very rare. Yet probably there is no one who wants to buy it any more since it is insecure, highly expensive on maintenance costs, etc. The case with the Marvels heroes goodwill is similar. No one will be willing to buy them, so their market value is very high.

IFAS Table
Internal factors Strengths Ability to stay relevant Strong brand awareness Distribution chain 0.075 0.075 0.05 0.15 0.15 4 3.5 2.5 5 4.5 0.3 0.2625 0.125 0.75 0.675 Characters people can relate to Are being present globally Detain a good management Producing their films Engaged in profitable strategic alliances Company is heavily relying on its current cash cows. Unstable and highly fluctuating revenues. Low return on investments. Poor performance and poor share price. Significant increase in non-current liabilities Weig ht Ratin g Weighted Score Comments

Vertical integration Strong licensing relationship Weaknesses No stars in their portfolio Risky financial performance

0.15 0.20 0.05 0.10 1.00

3 3.5 2 2.5

0.45 0.7 0.1 0.25 3.6125

Volatile licensing revenues Increase noncurrent liabilities Total Scores

The IFAS table stands up for the analysis of the performance of a companys internal factors. It is generally a summary of its core strengths and weaknesses. To each of the factors is assigned a weighting factor in percentages. Later on is assigned a rating showing the performance of each of these 5 factors of the company. The weaknesses usually receive a grade from 1 to 3 and the strengths receive a grade from 3 to 5, of course according to their general performance. Ratings are in the range of 1 to 5, 1 meaning poor and 5 meaning excellent. Together the weighting factor and the rating form a weighted average score that is later on summed up. Its total is the overall performance of the company according to its internal factors summary analysis. A final score of 3 plus means, there is potential in the company, but just the appropriate management is missing or its messing it up. Of course a company that has a high score can easily reach the bottom, and a company with a lower score is hardly going to reach a top, unless some bright management ideas come into action. Marvel scored a 3.62, which implies that the company is performing slightly above the

standard score with respect to other companies or competitors. Therefore it could be concluded that the company is doing just ok in responding to issues concerning its internal environment.

External Environment
Opportunities
Increasing role of the internet and social media

The increasing role of the internet and social media in the entertainment industry reveals huge opportunities for Marvel. As the IT age continues to explode, more people could be drawn into the gaming and filming industry which in turn provides opportunities for Marvel. Through social media and the innovation in the gaming industry, older generation could be reached through online, for instance online readers and by offering more matured online social themes. To this respect, marvel is doing pretty well, evidently through the establishment of the Global Digital Media Group. This group was strategic to Marvels intention to exploit the growing digital segment, specifically in digital video and mobile gaming. Also responding to this growing internet world, Marvel boosted interests amongst its existing readers by offering them the Marvel Digital Unlimited. This new medium of reading was meant to keep up with the pace of the increasing internet role in the entertainment industry. Increasing number of comic books collectors

Marvels goal is to reach two main target markets: boys, primarily aged 4 through 13, and collectors aged 1844. These collectors of comic books are an influential opportunity to Marvel Entertainment Inc. Since these are people whose childhood was obsessed from comic books, they would be glad to start collection some old editions of comic books. If Marvel starts printing out some old comic books and target them to collectors, they would all be glad to enlarge their collection. It is a short term opportunity since it can easily be accomplished.

Threats

Increasing sophistication of piracy and copyright infringements

As the IT and online media is developing the sophistication of online piracy is also increasing. This could pose serious threats on Marvel not just on the

faking and marketing its products, but also on the scale on which such activities could be carried. Nowadays, the internet has increased the chance of hackers to infringe patented properties and extract market material and on very large scale. As this activity is expected to continue at least at the meantime, the whole industry is bound to suffer from its effects, for instance in price and other aspects. Competition

From the table of top Licensing companies we could see that, Marvel is facing intense competition within the industry. Although the company seems to be doing well based on its financial condition, however, it appears to be have up to four competitors above it on the table in terms of sales. This implies that these competitors do not just have greater market share, but also the financial and technical capacities to threaten Marvels market share. Competitors like Disney even extend Marvels competition beyond the character licensing and tangible product offers, to intangible offers like parks. Such offers are not just appealing to kids but to the whole family setting, which makes troubling substitute. Splintered market

Due to the fact that, Marvel and other companies in the industry are largely dependent on cosmic characters and licensing, there is a threat of splintering the market. Marvel alone has about 5000 characters which could increase in the future due to changing taste of targets customers. This is also the same for major players in the industry. Continuous invention of new characters to meet taste of the same customers could cause an overload of supply in the market that splits up the market in small niches instead of in large. This could lead to decreasing revenues and profitability for the entire industry because all the producers have to produce more product groups, but smaller amounts since there are a lot of characters somewhat popular instead of several very popular ones.

EFAS Table
External Factors Opportunities Increasing role .30 of the internet and social 4.0 1.2 Active strategy in the digital Weight Rating Weighted Score Comment

media Comic book .25 collectors Threats Piracy and .15 copyright infringements 3.0 0.45 4.5 1.13

offering An emerging market niche

Taking active step to protect its trademarks and copyrights all over the world Diversifying offerings away from its original cosmic publication. For instance entering the film production The more characters there are offered, the harder the market is to approach since the characters will serve small niches instead of large segments. 4.23

Competition

.25

4.0

1.00

Splintered market

.15

3.0

0.45

Total Scores

1.00

Marvel scored 4.0 on its weighted score for internal factors, which implies that the company is performing above the standard score. Therefore it could be concluded that the company is doing pretty well in responding to issues concerning its external environment.

Porters 5 forces

Competitive rivalry - High

Marvel faces a lot of rivalry from Walt Disney and NBC Universal since they also operate in the publishing, licensing and Film production market for comic characters. The three of them are the main producers in these markets and they all have their own strong brands/characters in their portfolio. In the individual markets, there are also major competitors to Marvel. For example, in the publishing market, Marvel experiences competition from Dark Horse Comics (subject of Warner Bros) and DC Comics. Besides, Marvel faces competition in markets it is not actively operating in. The competition also extends to markets they licensed their characters for. Marvel licensed their characters to Hasbro (toy industry), SEGA (video games industry), Leapfrogs (Electronics industry), Hallmark (party supplies industry), General Mills (Food & Beverages industry), Johnson &Johnson (Health & beauty industry), Reebok (Footwear industry), Crocs Inc. (Footwear industry), Foot locker (Footwear industry), Fruit of the Loom (underwear industry), other license agreements were with Wal-Mart, Target, Pottery Barn, Nordstrom, Fred Segal, H&M, 20th Century Fox Lionsgate entertainment, FOX, Universal studios and SONY. Since all those licensees are conducting the main operations in their markets, Marvel still is facing competition in these markets since the success of the licensees in their markets, also depends a lot on Marvels performance and vice versa. Therefore, Marvels brands face indirect competition in tens of markets instead of just three direct competitors, so you can say that Marvel faces stiff competition. Besides the hard core fans of certain characters, the mainstream viewer easily switches to characters of competitors if the story does not attract them. That makes marvel extra vulnerable for their competition, however, this works both directions.

Power of suppliers - Low If you view the classical suppliers, there is barely any real power of suppliers. Besides raw materials like paper, design software and other materials necessary to produce the products for their publishing work and producing movies, Marvels suppliers arent that much of a worry for Marvel. So the power of suppliers is low. When you look to it in a more abstract way, licensees of marvel characters are also suppliers to Marvel. They give Marvel access to their knowledge and distribution networks to sell and promote their characters. They have a lot more power than Marvels classical suppliers. Because if Marvel cant get to agreements or does not meet the licensees demands, they will lose access to those markets, including the licensees expertise and distribution network in those markets.

Power of buyers - High

Power of buyers is relative high in the markets Marvel is operating in. Of course, you have the diehard fans of certain action heroes, but to attract new fans of certain characters, Marvel needs to make sure that they develop attractive comic stories as well on paper as on the screen. The mainstream comic viewers switch easily to characters to competitors if their movies or comic stories are better. Just think of Donald Duck and Batman. Besides suppliers, licensees are also buyers, the power of buyers in the licensing market is high, and buyers want to sell products with Marvels characters on it because that boosts sales. However, since licensing is 25% of Marvels total sales and we could safely assume that Marvels characters dont have that big of an impact on the licensees annual sales, there is more on stake for Marvel than there is for the Licensees, that increases the power of buyers.

Threat of substitutes - Medium There are a lot of substitute goods for Marvels products. In the core, Marvel sells fantasy characters in fantasy worlds in many different shapes like in movies, comics, toys and many others. There are many ways for consumers to spend their leisure time or dive into a fantasy world. Think of other movies, books, board games and video games. If you zoom out even further and focus on how people can spent their leisure time, there are thousands of alternatives for reading comics, viewing comic movies or any other product Marvels characters are involved in. So the substitutes are limitless for Marvels products.

Threat of new entrants - Low Entry barriers are very high in the comic industry. It needs years even decades let readers accept new stories. An organization will look at how loyal customers are to existing products, how quickly they can achieve economy of scales, would they have access to suppliers, would government legislation prevent them to encourage them to enter the industry. Marvel has some barriers when open film production segment. It used to license to third parties and get million dollars no matter how much that film earned. When they figure the film market accept their comic heroes fly in the movies, Marvel decides to produce films itself. Marvel has its own stories as scenarios. Thus for new entrants of comic movies, they needs time to deposit a new version of a new hero.

SFAS Matrix
Strategic Factors Weig ht Rating Weighte d Score Duration Shor t X Intermedia te X X X Lon g Film production Engaged in profitable strategic alliances Volatile revenues. Low return on investments. Company is heavily relying on its current cash cows. Active strategy in the digital offering comments

(S4)Vertical integration (S5)Strong licensing relationship

0.10 0.15

5 4.5

0.5 0.68

(W2) Risky 0.15 financial performanc e (W1) No 0.10 stars in their portfolio (O1) .15 Increasing role of the internet and social

3.5

0.53

0.3

4.0

0.6

media

(O2) Comic .15 book collectors (T1) Piracy .10 and copyright infringemen ts

4.5

0.68

An emerging market niche X Active step to protect its trademarks and copyrights all over the world Select carefully which characters to promote

3.0

0.3

(T2) Splintered market

.10

3.0

0.3

Total:

3.89

SFAS table is a very useful tool combining all main factors. It is an all-round analysis, which can be very important to get you informed about a companys position only by itself. SFAS summarizes 2 of the most important strengths, weaknesses, opportunities and threats and assigns to each of them a new weighting factor. The rating is kept the same. In addition to that is added a duration of the period that each factor will be in use. In Marvels case the company got an average SFAS score of 3.89 which is higher than just the IFAS and lower than the EFAS. As a whole Marvel performs well, since it is a very influential company for its market and there are some threats that can be turned into opportunities as well as opportunities to expand their market share and brand awareness. However Marvel should take care of its debt reliance and the lack of star products in its portfolio. All in all 3.89 is exactly what Marvel deserves for its performance.

Conclusions & Recommendations

When you get to the core of Marvel, they exploit their resources well in a market that faces stiff competition and external challenges in a struggle to remain profitable. However, their income from the licensing market is volatile and mainly depending on the popularity of Marvels existing characters. That also highlights another long term issue they have, they seem to lack real stars. Their successful characters are all cash cows, but you dont see any rising star among

their characters. So on the long run, Marvel will have challenges to remain successful in their business by increasing popularity of other characters or to maintain the popularity of the current characters and come up with new ideas how to exploit that popularity. Marvel seems to have its challenges ahead of them. Strong will, innovation, brand awareness, and strong partners in various partners seem essential for Marvel to survive, and it seems they have those resources. So, since the resources are there at Marvel to survive and grow into the market, but how are they going to exploit their strengths to improve their weaknesses, exploit the opportunities and avoid the threats? Those answers are answered in the following paragraphs. Weaknesses The weaknesses of Marvel are mainly financial ones and need to be solved. However, there are also two weaknesses from a strategic point of view. Likely, the lack of stars in Marvels portfolio and weak stakeholders management. To tackle the lack of stars problem, Marvel could analyze closely what gaps are there, what type of characters are not their yet in the market and got a unique personality and abilities. Looking at the launch of movies like The Hulk, Iron man and Captain America, when those movies become a success, Marvel could exploit them through all the different markets they have partners in. If they, in continuation of the buzz the movies create, are able to create more adventures of these characters in games, movies, TV shows, comics etc., Marvel could develop new growing groups of loyal customers and create themselves new stars. The second weakness, poor stakeholders management, finds its problem in its own employees, resulting in a major strike. Marvel should realize that they thrive and depend on their employees unique creativity to create a buzz around their characters and to exploit that in terms of profit and growth. A good advice would imply to be more reluctant on their demands, and be easier on them. In the end, when the creative staff is demotivated or on strike, Marvel will not be able to create new scripts, that keeps Marvels characters popular. Opportunities There are two main opportunities in the market for Marvel, the growing role of internet, including social media, and an increase in comic book collectors. Concerning the internet and the growing role of social media, Marvel could exploit it by developing online fan shops, where fans can buy products of their favorite characters. This could be done in cooperation with the partners of Marvel in the different industries. Other activities exploiting the internet and social media, are fan pages through social media, releasing news and information about the characters through social media, online games, release trailers of new movies, create communities where collectors can trade or discuss their items, sell online comic books in PDF file or in a more secured way, and many others. Internet a simplification of communication between consumers and companies, the opportunities to increase brand loyalty and sales seem to be limitless.

The comic book collectors seem to be more of a niche, but are nevertheless Marvels most loyal customers. Marvel could publish special editions of comic series in just a little different style as the regular ones. Maybe in the style of how comics were produced a few decades ago, special guides with detailed information about the characters (Star Wars publishes those kind guides as well), arrange fairs where collectors could buy products related to their favorite characters, etc. to increase revenues and increase the bond between fans and character. Threats Copyright infringement, Competition and Market saturation are the most severe threats Marvel is facing. Copyright infringement is the major threat to the industry as a whole, since the estimations are that $23 billion were lost for the industries Marvel is operating in. So far, not a single company has the right answer on how to respond to these issues. Suing persons who unrightfully copy Marvels products is an option, but an extremely expansive one and highly doubtful if it would cause any effect. A more experimental option that is mostly tested by music producers is to offer products of Marvel digitally for a low fee. In this way you take out the arguments for downloaders that buying authentic products is more of a worry since you have to physically buy or order it, and it will be affordable. Of course, it will not deteriorate online copy right infringement, but it would be a good start to offer products that are more compatible to todays consumer behavior and demands, instead of to stick to the traditional ways of selling off products. Offering Marvels products on this way will increase sales volume since the products are very easy to get access to and it is cheaper. Also the fact that production costs will decrease tremendously, it does not necessarily mean it will affect the profitability of the industry. Copy right infringements for non-digital products like cheaply produced shirts, toys in mainly Asia, is another problem, for now, there seems no easier option then to sue producers who illegally use Marvels characters on their products. Marvel faces stiff competition of Walt Disney and NBC Universal, who have their own strong brands. It is hard to compete with them, since their characters have their own strong personalities, who have their own loyal customers. The only way Marvel could compete on them is to stay innovative on channels the company uses to offer their products through and product development in cooperation with Marvels partners in the different markets. Marvel also could identify niches and segments in the market and select appropriate characters from their large portfolio to approach them with. This also helps Marvel to create new stars. The final threat is a splintered market, it could arise in shape of an overload of different characters offered to the market. To avoid this, it is key to select the characters Marvel promotes carefully to avoid a completely splintered market. If Marvel and its competitors are very selective in the characters they promote, they will avoid that the market has too much to pick from so that avoids that Marvel has to produce more product groups, but smaller amounts of each, due to a splintered demand; because that could affect profitability and productions/ distributions efficiency.

Sources
"Tuesday Mar 20." Investopedia. Web. 20 Mar. 2012. <http://www.investopedia.com>.