Management Case Study Essay

I.CURRENT SITUATIONA.Past Corporate Performance Indexesi. react Enterprise Incorporated wonder Enterprises, Inc. is an industry-leading level whose core byplay is theatrical role-establish frolic. enquires foundation and success is built on their proprietary library of oer 4,700 characters feature in a variety of media for nearly seventy years (1939-2004). admiration utilizes its character franchises in licensing agreements, and make of comic books through the element of respond Comics.ii.How it was formally organized First Management admiration had its initiative taste of corporate culture when founder Martin Goodman sold the create outfit that began life as judgment of convictionly Comics to Perfect Film and Chemical a comp whatsoever kn hold for film processing and mail recount drug sales in 1968. Perfect grouped inquire under the Magazine Management brand.1972 adage Stan Lee stepping in for Goodman as publisher, while p arnt company Perfect rebranded itself as Cad ence toilet the following year. The wonky Magazine Management Co. now officially became known as marvel Comics Group.iii. bracing human Pictures acquired administration of Cadence Industries for inquireMarvel cheer Group, Inc. (Marvel or MEG), the p arnt company of Marvel Comics and Marvel businesss, was put up for sale as part of the liquidation of its then parent flock, Cadence Industries. Marvel was sold to New general Pictures. Cadence Industries, formerly Perfect Film & Chemical Corporation, was an American manifold possess by Martin Marty S. Ackerman. In 1989, Ronald Perelmans MacAndrews & Forbes Holdings group of companies bought Marvel Entertainment Group from New creation for $82.5 million, not including Marvel Productions, which was folded into NewWorlds TV and movie business.It is a mini-Disney in damage of intellectual airscrew, said Perelman. Disneys got much more highly recognized characters and softer characters, whereas our characters are destinati pe erlessd action heroes. nevertheless at Marvel we are now in the business of the creation and marketplaceing of characters.iv.Going Public, Bankruptcy and acquisition Perelmans GovernanceMarvel do an initial public offer of 40% of the stock in July 1991, giving $40 million from the proceeds to Andrews Group, Marvels then direct parent corporation within MacAndrews & Forbes Holdings. Marvel purchased the trading card company Fleer within a year of going public. In April 1993, Marvel acquired 46% of ToyBiz, for the rights to make Marvel toys. The Andrews Group named Avi Arad of ToyBiz as the president and CEO of the Marvel Films stratum and of New World Family Filmworks, Inc., a New World Entertainment secondary. New World later became a fellow subsidiary of the Andrews Group.In 1993 and 1994, Marvels holding companies Marvel Holdings, Inc. and Marvel Parent Holdings, Inc. were form between Andrews Group and MEG and issued over half a billion dollars in bonds under the burster of Perelman, secured by Marvels rising stock, which was passed up in dividends to Perlmans group of companies. Marvel act acquisitions with Panini, an Italian sticker-maker, in August 1994, and SkyBox International in April 1995. Under the governance of Perelman, Marvel withal purchased Heroes World Distri only whenion, a regional distributor to comic-book shops. Marvels attempt to distribute its intersections directly led to a decrease in sales and aggravated the losses which Marvel suffered when the comic book bubble vote downped.While licensing revenue enhancement reached $50 million in 1995, MEG laid off 275 employees on January 4, 1996. Perelman offered to have the Andrews Group purchase additional shares with an issue for $350 million in November 1996, which would have required ToyBiz to become a wholly owned subsidiary of Marvel. Meanwhile, Carl Icahn began buying Marvels bonds at 20% of their value and moved to block Perelmans plan. The Marvel group of companiesfiled fo r bankruptcy on declination 27, 1996, but the note holders, led by Icahn, occlude this.v.Marvel as Disney SubsidiaryOn August 31, 2009, The Walt Disney Company announced a deal to acquire Marvel Entertainment for $4.24 billion, with Marvel shareholders to receive $30 and near 0.745 Disney shares for each share of Marvel they own. The voting occurred on December 31, 2009 and the merger was approved. The acquisition of Marvel was finalized hours after the shareholder vote, therefore giving Disney full self-will of Marvel Entertainment. The company was delisted from the New York Stock Ex remove under its ticker symbol (MVL), due to the ending of the deal.On June 2, 2010 Marvel announced that it promoted Joe Quesada to headway Creative Officer of Marvel Entertainment. In June 2010, Marvel vex up a television division headed by Jeph Loeb as executive vice president. Three months later, smith & Tinker licensed from Marvel the character rights for a superhero digital collectible ga me for Facebook and Apples mobile platform. On October 1, 2010, Marvel moved its moorages to a 60,000-square-foot (5,600 m2) suite at 135 W. 50th Street, New York City, New York, under a nine-year sublease contract. Stan Lee Medias lawsuit over against Marvel was dismissed again in February 2011.In July 2011, a U.S. District Court judge ruled that Marvel characters co-created by jacks Kirby would remain the property of Marvel.In bunt 2013, Feld Entertainment agreed with Marvel to take a leak a Marvel Character ground live arena show. Marvel was also launching a sunrise(prenominal) pop culture and lifestyle web show, Earths Mightiest Show.Current MissionMarvel Enterprises Inc. aims to successfully meet the needs of its customers by continuing to design, develop, market and distribute character superheroes that made the Companys name famous. It also aims at offeringits customers fresh and different characters all the time. Not only that, but Marvels goal was also to secure the best-in-class licensing first mates in all categories of its divisions in business.Current Objectives1.To root if Marvel can still increase the growth in their profit at a high level.2.To widen the range of their licensing activities.3.To continue to maintain have over the quality of the product, from design to final applied science and execution. 4.To determine if Marvel could continue to capitalize on a trammel set of prominent characters, to the highest degree notably Spiderman or could decide to shift focus to a larger set of lesser- known characters that might have the potential of becoming blockbuster characters but were largely unknown to the wider public. 5.To determine if Marvel could reckon beyond its current business model and coach on more capital-intensive but also fat activities.Current StrategiesMarvel was acquired by Toy Biz and was named as Marvel Enterprises Inc. In line with the change of its name was the total change in its management. The start was a difficult one. Marvels virgin strategy was first aimed at monetizing the content library via licensing characters for use with media products (such as toys, apparel, collectibles, and food). Managing the library of characters to foster semipermanent value was the second key focus of Marvels new management. Retaining some form of control over the creative process- to ensure the quality of the content that featured Marvel characters was the third main strategic dimension. Marvels management team hired well-known artists and writers to lead its creative efforts in the publishing division, including popular writers from the film and television industry, and had started to sign exclusive contracts with key creative talent.Current PoliciesSome of the policies implemented by Marvel Enterprises Inc. to its management are 1.Excluding its Spider- Man character from the deal with TBW (Hong Kong based autarkical Company) in creating the product design, marketingand sales because Spider-Man ha s a separate deal with Sony Pictures.2.Maintaining an incredible performance for its Toy division because competition was so intense at this industry. 3.Maintaining a wide channel of dispersal of its products. 4.Pursuing a modify base of studio partners, both to ensure their commitment to each project and to mitigate risks regarding Marvels motion picture division.5.Widening the range of its licensing activities for its characters. 6.Investing in profitable investment-related activities.7.Strictly implementing rules and linguistic rules in its management. 8.Maintaining an effective internal control over its management.II.Corporate GovernanceA.Board of Directorsi.DirectorsMarvels Board of Directors has three classes of coachs with staggered three-year terms.Sid Ganis and James F. Halpin were elect at the 2008 one-year collision as Class I directors to serve a three-year term.Morton E. Handel, F. hawkshaw Cuneo and Isaac Perlmutter were elected at the 2007 yearly opposition a s Class III directors to serve a three-year term.Richard L. Solar was elected, along with Avi Arad, who later resigned, at the 2006 annual meeting of stockholders as a Class II director to serve a three-year term. The Board of Directors elected James W. Breyer to replace Mr. Arad in June 2006, and Mr. Breyer is serving out the remainder of Mr. Arads term. In July 2007, the Board of Directors increase the size of the Board by one Board seat and elected Laurence N. Charney to serve as a Class II director until this annual meeting. to each one of Mr. Solar, Mr. Breyer and Mr. Charney has been nominated for election to a new three-year term at thisannual meeting.ii.Other DirectorsJames W. Breyer (Class II), 47, has been a Marvel director since June 2006. Mr. Breyer has served as a partner of the te Valley-based venture capital firm, Accel Partners, since 1995.Laurence N. Charney (Class II), 61, has been a Marvel director since July 2007. Mr. Charney retired from his position as a Part ner of Ernst & three-year-old LLP in 2007, having served that firm for over thirty-five years and engagement acceptance across all advantage lines. Mr. Charney served previously at Ernst & Young as an audit partner and was Marvels audit partner for its 1999 through 2003 audits. Mr. Charney is a elderberry bush(a) advisor to Plainfield Asset Management LLC, a hedge fund based in Greenwich, CT that specializes in special and distressed situations.Richard L. Solar (Class II), 69, has been a Marvel director since December 2002. Since February 2003, Mr. Solar has been a management consultant and investor. From June 2002 to February 2003, Mr. Solar acted as a consultant for Gerber Childrenswear, Inc., a trafficker of popular-priced licensed apparel sold under the Gerber name, as well as under licenses from Baby weirdie Tunes, Wilson, Converse and Coca-Cola.iii.Directors Whos Terms Are ContinuingFor each member of the Board of Directors whose term of office as a director continues af ter the annual meeting, set forth below is the directors name, age as of March 9, 2009, caput occupation for at least the last five years, selected biographic information and period of service as a director.Sid Ganis (Class I), 69, has been a Marvel director since October 1999. Mr. Ganis is the President of the honorary society of Motion Picture Arts and Sciences, the organization that awards the Oscars. Mr. Ganis has been President of Out of the BlueEntertainment, a company that he founded, since September1996.Out of the BlueEntertainment is a provider of motion pictures, television and musical enjoyment for Sony Pictures Entertainment and some others. From January 1991 until September 1996, Mr. Ganis held various executive positions with Sony Pictures Entertainment, including Vice head of Columbia Pictures and President of Worldwide marketing for Columbia/TriStar Motion Picture Companies.James F. Halpin (Class I), 58, has been a Marvel director since March 1995. Mr. Halpin re tired in March 2000 as President and Chief Executive Officer and a director of CompUSA Inc., a retailer of ready reckoner hardware, software, accessories and related products, with which he had been employed since May 1993. Mr. Halpin was a director of Life Time Fitness, Inc. from February 2005 until August 2008.F. Peter Cuneo (Class III), 64, was Marvels President and Chief Executive Officer from July 1999 through December 2002 and served as the half-time Special Advisor to Marvels Chief Executive Officer from January 2003 through December 2004. Mr. Cuneo has been a Marvel director since July 1999, and since June 2003 he has served as a non-executive Vice Chairman of the Board of Directors. Mr. Cuneo is a senior advisor to Plainfield Asset Management LLC, a hedge fund based in Greenwich, CT that specializes in special and distressed situations. Mr. Cuneo is a also director of Iconix Brands, Inc.Morton E. Handel (Class III), 73, has been the Chairman of the Board of Directors of M arvel since October 1998 and was first prescribed as a director in June 1997. Mr. Handel served as a director of Trump Entertainment Resorts, Inc. from June 2005 until November 2008 and as a director of Linens N Things, Inc from 2000 until February 2006. Mr. Handel is also a Life Regent of the University of Hartford and is active on the boards of not-for-profit organizations in the Hartford, CT area.Isaac Perlmutter (Class III), 66, has been Marvels Chief Executive Officer since January 1, 2005. Mr. Perlmutter has served as a senior executive of Marvel Characters B.V. (a wholly owned subsidiary of Marvel Entertainment,Inc. that owns and licenses Marvels intellectual property library) and its predecessor-in-interest Marvel Characters, Inc. since January 2007 and has been employed by Marvel as Vice Chairman of the Board of Directors since November 2001. Mr. Perlmutter has been a Marvel director since April 1993 and served as Chairman of the Board of Directors until March 1995.B.Manage menti.Board Meetings and delegacysThe Board of Directors held at least 10 meetings annually. Each incumbent director attended, during the year, at least 75% of the aggregate number of Board of Directors meetings and applicable mission meetings held during the period in which he served as a director. The Board of Directors committees include the Nominating and Corporate Governance perpetration, study Committee, Compensation Committee, Film Slate Committee and Strategic Planning Committee.ii.Corporate Governance CommitteeThe Corporate Governance Committees function is (i) to identify individuals qualified to become members of the Board of Directors (ii) to advise individuals for selection by the Board of Directors as nominees for election as directors at the following(a) annual meeting of stockholders and (iii) to develop and recommend to the Board of Directors a set of Corporate Governance Guidelines and the modification of those guidelines from time to time. The Corporate Gove rnance Committee is comprised of Messrs. Halpin (chairman) and Ganis. The Nominating and Corporate Governance Committee met three times annually. The Board of Directors has determined that each of Messrs, Halpin and Ganis is nonsymbioticiii.Audit CommitteeThe Audit Committees function is (i) to directly appoint, retain, compensate, evaluate and, where appropriate, terminate Marvels independentregistered public accounting firm (ii) to assist the Board in its oversight of the justice of Marvels financial statements, Marvels compliance with legal and regulatory requirements, the independent registered public accounting firms qualifications and independence, and the performance of Marvels internal audit function and the independent registered public accounting firm and (iii) to prepare the report required to be included in Marvels annual proxy statement, which follows.The Audit Committee is ultimately responsible for pre-approving audit and non-audit services provided by its independ ent registered public accounting firm including the compensation to be paid for those services. The Audit Committee has established a form _or_ system of government regarding pre-approval of audit and non-audit services, and has delegated its authority to pre-approve audit and non-audit services to its chairman, who reports any such pre-approvals to the Audit Committee at its next meeting. In accordance with the Audit Committees pre-approval policy, the Audit Committee does not engage its independent registered public accounting firm to perform non-audit services that are precluded by law or commandment or any services that would impair the firms independence.iv.Compensation CommitteeOur chief executive officeholder is invited to attend meetings of the Compensation Committee and to offer recommendations on compensation of other executives or directors, but he does not vote in the committees final determinations, and decisions concerning his own compensation are made in his absenc e. The Compensation Committee has the authority to retain compensation consultants to assist it in making its decisions.During 2008, the members of Marvels Compensation Committee were Messrs. Halpin and Ganis. N all of those individuals was an policeman or employee of Marvel, or of any of its subsidiaries, during 2008 or formerly, nor did either of them have any relationship requiring disclosure in Transactions with Related Persons, Promoters and Certain Control Persons, below. none of our executive officers served in 2008 on the compensation committee of anyother company that had an executive officer serving as a Marvel director. None of our executive officers served in 2008 as a director of any other company that had an executive officer serving on our Compensation Committee..v.Executive OfficersBelow are the positions held with Marvel, and selected biographical information for our executive officers, other than Mr. Perlmutter, whose information is found under About Our Directors, above.1.Alan Fine , 58, has served as Executive Vice President and Chief Marketing Officer of Marvel Characters B.V. (a wholly owned subsidiary of Marvel Entertainment, Inc. that owns and licenses Marvels intellectual property library) and its predecessor-in-interest Marvel Characters, Inc. since May 2007. Mr. Fine also has served as Chief Executive Officer of Marvels publishing division since September 2004. Mr. Fine served as Chief Executive Officer of Marvels toy division from August 2001 until that division was unopen in early 2008.2.David Maisel , 46, has served as Executive Vice President, Office of the Chief Executive since September 2006 and became Chairman of Marvel Studios in March 2007. From September 2005 until September 2006, Mr. Maisel served as Executive Vice President, Corporate knowledge and from September 2005 until March 2007, Mr. Maisel served as Vice Chairman of Marvel Studios. From January 2004 to September 2005, Mr. Maisel served as President and Chief Oper ating Officer of Marvel Studios. From October 2001 to November 2003, Mr. Maisel headed Corporate Strategy and Business Development for Endeavor Agency, a Hollywood literary and talent agency.3.Simon Philips , 40, has served as President, Worldwide Consumer Products since October 2008 and as CEO of Marvel Animation since January 2008. Mr. Philips served as President, Marvel International from November 2006 to October 2008. From November 2003 to November 2006, Mr. Philips served as the Managing Director of 4Kids Entertainment International. Mr. Philips servedas chief executive officer of LDI, a licensing and swap company, from 1996 to 2003.4.John Turitzin , 53, has served as Executive Vice President, Office of the Chief Executive since September 2006. From February 2006 until September 2006, Mr. Turitzin served as Marvels Chief Administrative Officer. Mr. Turitzin has also served as Executive Vice President and General way since February 2004. 5.Kenneth P. West , 50, has served as Executive Vice President and Chief Financial Officer since June 2002.vi.Code of EthicsMarvel has adopted a code of ethics applicable to its principal executive officer, principal financial officer, principal accounting officer or controller and persons performing similar functions. We have also adopted a code of business conduct and ethics which is applicable to all employees and directors.III. EXTERNAL ENVIRONMENT OPPORTUNITIES AND THREATSA.Social Environmentstinting/Demographic ForcesEntertainment industry is targeting sectioned groups that have been long ignored including ethic cultures, language, religion and women and in case by case basis adults only products.Technological/Physical ForcesEntertainment is available in variety of ways including online, cell phone, and on-demand video. Sales in traditional entertainment merchandise has dropped. Social/Cultural ForcesEntertainment has reached out to the community conscious in educating it on events and beliefs in the community. policy-making/Legal ForcesEntertainment outlets are facing parental lawsuits to prevent particular products from being place and/or sold in a market or setting. Producers mustkeep vigilant on product content in order to deal with either self regulated or government regulation in order to guarantee an investment return. The threat of piracy and illegal licensing is at stake in the entertainment industry. The entertainment industry lobbies to protect copyrighted product.B.Task EnvironmentCompetitorsThe entertainment industry no consider how fragmented it appears much of what is produced. In terms of entertainment is held closely by three US based media conglomerates, Disney, Viacom, and Time Warner. These conglomerates direct the entertainment market and the direction of the media. The Licensing segment competes with a diverse range of entities that own intellectual property rights in characters. These include DC Comics (a subsidiary of Time Warner, Inc.), The Walt Disney Company, NB C Universal, Inc. (a subsidiary of General electric automobile Company), DreamWorks Animation SKG, Inc. and other entertainment-related entities. Many of these competitors have greater financial and other resources than we do. The Publishing segment competes with numerous publishers in the United States. Some of the Publishing segments competitors, such as DC Comics, are part of structured entertainment companies and may have greater financial and other resources than we do.The Publishing segment also faces competition from other entertainment media, such as movies and video games. The Toy segment competes with many a(prenominal) larger toy companies in the design and development of new toys, in the procurement of licenses and for adequate retail shelf space for its products. The larger toy companies include Hasbro, Mattel Inc., and Jakks Pacific, Inc. Many of these competitors have greater financial and other resources than the Company. The toy industrys highly competitive enviro nment continues to place cost pressures on manufacturers and distributors. discretional spending among potential toy consumers is limited and the toy industry competes for those dollars along with the makers of computers and video games. The Film Production segment competes with other film producers, including major studios such as Twentieth Century Fox and Sony Pictures (which also produce films licensed by our Licensing segment). Many of these producers are part of integrated entertainmentcompanies and have greater financial and other resourcesThreat of New EntrantsThere is always the possibility of new entrants in the entertainment industry. Producers and/or manufacturers may create a product to carve out a particular market or segment niche. The industry has a history of employees banding together to create a new product to compete in the already in the full field, but getting a local anaesthetic or national distribution is challenging smaller entertainment providers team with already established distribution unit have an excellent chance of breaking ground into the market.Threat of Substitute ProductsThe threat of any type substitute in the entertainment industry is high. Most often than not, the threat comes in time of gift giving season when marketing dollars are spent more to sway people from one product to the other. This time of the year is also filled with hopes of new products entering the market to capture a hungry audience. Bargaining Power of SuppliersSuppliers are creating new outlets for the entertainment industry through technological advances. The succeeder for battle technological supremacy will lie solely on which technological outlet has the virtually partners.Bargaining Power of BuyersConsumers have the ability to patronize or not to patronize an entertainment outlet. However, the limited ownership prevents consumers from believing they will never deal with a company they have been dissatisfied with in the past.IV. INTERNAL ENVIRONMEN T STRENGTHS AND WEAKNESSESA.Corporate StructureMarvel is a multidivisional company that has three segments which are highly integrated and vertically differentiated. Licensing The Licensing segment earns revenues from selling rights to movies, television production companies, video game publishers, and merchandise manufacturers to use itscharacter properties. The licensing business concentrates on a few large licensees, and attempts to manage and re-segment opportunities with its characters, creating classic editions, youth editions, and movie editions to take advantage of every revenue opportunity. Publication The Publishing segment produces, markets, and sells comic books. This business publishes comic books and novels about the companys characters, and licenses characters from other sources and turns them into graphic novels. Toys The Toys segment collects royalties and service fees from Hasbro. The company has an exclusive toy merchandising agreement with Hasbro (HAS) until D ecember 31, 2011, that began in 2007. Prior to this, most revenues in the Toy segment were made from toys produced by Marvel. Movie Production The movie production arm of the company was set up to independently produce films and grow revenues. The new Films segment produces films featuring Marvels characters like Iron Man.B.Corporate CultureHonesty and integrity are the key organizational values of Marvel. The company gives importance in maintaining company reputation as well as fairness and awareness even with competitors.Marvel considers its almost 5000 character library as 5000 assets. The company looks forward to become even larger with the Disney merger. The company shares many shared values and maintains a constant renewing process.Marvel provides its people with Corporate Governance Guidelines, Corporate Code of Business wear and Ethics, and Code of Ethics for CEO and Senior Financial Officers. These provides them with a brief description of their obligations and offer ins truction concerning how to conduct their business in a manner consistent with their high ethical value.C.Corporate Resources1.Marketing2.Finance3.Research and Development4.Operations and Logistics5.Human Resources6.Information Systems