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Walt Disney’s acquisition of Marvel is a smart move to not only maintain Disney’s success in the entertainment industry, but to further its’ competitive advantage, success, and profitability. In relation to corporate strategy, Walt Disney should consider vertically integrating themselves into more partnerships to keep up with competitors, such as, Time Warner (DC Comics, Warner Brothers). In terms of business strategy, Disney should aim to be the competitor with dual advantage to combine both low-cost and differentiation strategies. This highlights marketing to be a functional strategy that Walt Disney should be highly focused on as they will need to continue advertising their products, additions to their parks, resorts, and more. Overall, Walt Disney should consider all strategies mentioned above, however should also consider focusing on product development and market development by taking into consideration what Marvel adds to their competitive advantage over Time Warner.
Similar to Disney, Marvel has been successful at creating well-known and memorable characters from Iron Man to Thor to Black Panther to Daredevil and others. Not only are Marvel’s characters well-known, they also succeed in selling merchandise in relation to the films by diversifying into consumer products, apparel, collectibles, footwear and more. By combining Marvel’s already created success with that of Disney’s this should realistically increase profits for Walt Disney because of the gain in assets. However, competition does remain as companies such as Time Warner (DC Comics) also generate success through well-known characters The Flash, Green Arrow, Batman, Superman, and more. So how does Walt Disney gain the competitive advantage?
How it works
On a corporate level, Walt Disney should consider creating partnerships with other creative companies to improve their new product development. By partnering with other firms and creatives, they will have the potential and insight from new minds and imaginations to create more unique characters to compete with Time Warner’s DC and Warner Bros. The creation of more films and characters will aid in the continuation of Walt Disney’s brand and success of well-known characters to create profit through additional theme park rides, apparel, consumer products, footwear, and more.
Prior to the acquisition of Marvel, Walt Disney appeared to have been using a differentiation business strategy to keep up with competitors. The acquisition of Marvel creates an interesting take on their business strategy and what they should do moving forward. Walt Disney should not only focus on high costing products, but also those low-costing such as their consumer products sold at Walmart. The goal is to be the competitor with dual advantage to take advantage of low cost products, but also those higher costing such as the products in their retail stores. With the acquisition of Marvel, Disney not only holds onto their products as an asset, but now also those of Marvel. Disney has a competitive advantage over Time Warner in the sense that they cater to almost every population around the world in their films, products, and parks with a strong emphasis on family through their films from Moana to Coco to Princess and the Frog.
Functionally, Disney should continue to spend a significant amount of their budget on marketing to maintain the advertising of their films, parks, apps, tv shows and more. By having high market penetration, Disney can grow the sales of their existing products, attract customers, and showcase new products. By acquiring Marvel, Disney should also focus on their market development by growing their business into new market segments. For example, by acquiring Marvel (who owns comic books), in which Disney did not have, they are now able to establish operations in new markets to compete with Time Warner who does have comics under DC Entertainment.
Overall, by acquiring Marvel, Disney is now able to compete with Time Warner in other operational and market segments than they were able to before, for example comic publishing and licensing. Disney can also begin to incorporate Marvel characters (those not under another company’s licensing) into their theme parks, or even open a new park dedicated to their characters. They can also continue to fight for the rights of those characters Marvel is unable to produce to add even more assets. Disney may even consider creating a Marvel network, in which their functional strategy being focused on marketing could create new branding around. As Disney often uses diversification to support their business growth, the acquisition of Marvel seems to have been a smart choice for their growth. Disney is growing their presence not only domestically and internationally, but they are also seducing a new audience than before. This should gain them the competitive advantage of Time Warner, not only in profit, but also in diversification.
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