The evolution of Marvel’s original strategy in 1939

The Marvel Way: Restoring a Blue Ocean

  1. What was Marvel’s original strategy in 1939? Describe one evolution of this strategy and the current strategy?

Martin Goodman founded the Marvel in 1939 as a comic book company. The company’s original strategy was all about the delivery of me-to-knockoffs and some original work in small scale. However, an oncoming red ocean coerced the company into changing its strategy to the production of original content targeting old demographics and college students. The strategy, blue ocean, delivered a handful of creativity leading to the creation of Marvel characters that began as simple individuals that later grew to reluctant superheroes. To be precise, the strategy mainly aimed at maximizing financial success which saw the creation of eight thousand characters and more. The company comics were largely regarded as high quality but due to poor management and untapped profits resulted in the red ocean. Between 1986 and 1996, running of the company became riddled with a series of acquisitions and poorly thought decisions. For instance, the one for Ronald O. Perelman which was all about high pricing, lowered quality, underperforming acquisitions and fewer distributors which led to comic book collection bubble crisis hence damaging sales and eventually forcing Marvel into bankruptcy. In the post-bankruptcy phase, the company came to stability financially under the stewardship of Peter Cumeoeven though there were still numerous struggles.

  1. What were the most important driving forces in Marvel’s history? How did these affect strategy development?

Marvel is one of the companies in history with turnaround record of slowing down and bouncing back to success lane as many times as history records. In this analysis, we are keen on identifying some of the significant forces that were responsible for these downtimes and success moments as far as the company’shistory is concerned while at the same time evaluating how these forces influenced the company’s strategy development. There are three forces that we believe were responsible for reshaping of the company; they include the need to rival DC in the comic market, poor management and series of acquisitions. In the 1960s, DC was the dominant player in the comic market as even as Marvel struggled to keep up with it. The company; therefore,moved to implement a new strategy that would see it increase its market share to what would create a formidable rivalry with the DC. This forms one of the driving forces that shaped the company’s history.

To optimize the success of the first strategy, Marvel ensured that it centred on the production of the original content that targeted the older demographics, which was mainly the college students. Another step was all about resorting to characters that were just normal humans transformed to become superheroes hence making individuals relate with them amicably. After a short stint at the creative content creation, the company entered the blue ocean where its brand grew in terms of popularity to enormous levels. A major force that also reshaped the company’s history was the Cadence Industries’ acquisition of 1968, which was arrived at after an indication of difficult times ahead (Olenick, 2016). The major problem with the acquisition was that the acquiring company, Cadence Industries, was well placed with print distribution but had zero experience with publishing. Also identifiable from the company’s then history is poor management. It is reported that the company executives were not getting along as would be required, especially when there is a need to make consequential decisions.

  1. What are the key differences in executing a red ocean and blue ocean strategies?

Companies face an uphill task to attain tangible success in their respective markets due to cutthroat competition that exists in these markets. Luckily to these firms, there are myriads of strategies they can exploit in order for them to gain an advantage over the primary rivalling company. Two of these strategies include the red ocean and blue ocean strategies. The red ocean strategy is where a company competes in an industry that exists, thereby requiring the company to overcome an intense market competition through the use of product pricing. The idea under this strategy is to overcome the market competition and rise to a level of exploiting the demand that exists. The strategy has always worked for firms in the soft drink industry since it is an industry that has existed for a long time and has older players that have raised the entry barrier.

On the other hand, blue ocean strategy is mainly concerned with the creation of demand that is not yet in existence. For instance, there is always a general understanding among firms that there is a deeper potential of the marketplace that is lying fallow and is due for exploration and exploitation. In many cases, blue oceans are always created from the red oceans through the expansion of the existing industries. The success factor in the blue ocean strategy is all about finding the correct market opportunity and creating irrelevance in the competition.

Therefore, the main difference in the execution of the two strategies is that while the red ocean strategy focuses on competing in the market, beating the competitors, siphoning the existing demand, making cost-value tradeoffs and choosing between cost and differentiation; blue ocean, on the other hand, focuses creation of new markets, renders competitors obsolete, captures new demand, breaks the cost-value tradeoffs and purses both cost and differentiation.

  1. Which one of the five generic competitive strategies discussed in Chapter 5 most closely approximates one of Marvel’s successful competitive approaches? Why?

Marvel employed focused differentiation strategy that seems to be working for it in its industry. With the preparation set, Marvel executives started looking for potential moves to it productive. As can be seen from the case, the company adopted another strategy which was all about establishing a real studio for movies to store and produce movies for the company. The managementunderstood that the current licensing strategy was foregoing large and squandering innovative control (Olenick, 2016). The new strategy generally proposed safe financing and would be run with a culture of cost cognizance. Marvel disposed of the typical Hollywood spending plan by leasing a studio over a car dealership. The organization likewise accepted the fact that characters were the stars and required skilled lesser-known on-screen characters to breathe life into the characters. By resorting to this new strategy, in 2008 the company releasedIron Man 1 and created close to $200 million. This denoted the start of Marvel’s new blue ocean strategy.

  1. What does a SWOT of Marvel look like? Prepare a SWOT


Marvel has a considerably long history with formidable foundation and solid capital. These are some of the factors that have kept the company afloat even during economic meltdowns. Another factor is its list of characters that are extremely popular with the company base of viewers. The big number of loyal customers has also ensured that the company remains a top seller amidst heightened competition and throughout its lifetime. Finally, the company has an excellent creative unit with quality movies which are guided by its characters.


The company changed its characters as a result of aesthetic fatigue. However, this did not turn out to be an instant success since the new lot was not popular with the majority of existing viewers (Olenick, 2016). Innovations that the company engaged in revamping its production were very costly hence forcing the company to resort to the slow-paced innovation process. For instance, the cinematography is currently considered as an obsolete technology hence presenting an opportunity to competitors to win customers over.


Marvel can exploit its massive resources as well as the business model it has to produce movies that will enable them to win a totally new set of customers.


The company’s longtime rival, DC, is growing stronger hence cementing its position as an established player in the industry. Also, the cost of producing heroic movies is extremely high, yet the company is expected to achieve top-notch quality while at the same time looking forward to returns.

  1. What is the difference between value extraction and value innovation? What is the financial implication of each? Identify examples of each in Marvel’s history?

Value innovation is usually applied as part of blue ocean strategy to create an elaboration of the products in existence or creation of new markets for the available products with a view of expanding the customer base as well as the value yet maintaining costs incurred as low as possible. On the other hand, value extraction is applied in the red ocean strategy to where one firm thrives in the market while its competitors suffer losses hence leaving the shareholders in the competing firms at risk of losing their investments.

  1. What issues currently confront the company?

As initially indicated, the company currently faces three main issues; a stronger competitor that seems to get its market strategies well, high production costs of the company’s current major production line- the heroic movies, and staggering innovation implementation due to high associated costs.

  1. How did Marvel align its values, people and profits for success in its blue ocean?

Marvel realized that in order for it to succeed, it had to create an alignment that encompassed three propositions; that is creating value that would make its customers stick with it while also attracting new ones, stabling a profit proposition that would enable the company to make reasonable returns from its value proposition and finally a people proposition that would constantly motivate the company workers to execute the strategy in the best way possible.

  1. Recommendations

The company should continue with its expansion drive while also tailoring its focus towards the television world. This will definitely hand the company an opportunity to harness sustainable growth. One way of venturing into the television world is by creating television series premised on secondary characters.

  1. Lessons learned

The case study of Marvel presents a number of lessons some which include the fact that company executive, together with the shareholders, has much influence over the success or failure of a company. In the case of Marvel, there was a formidable loyal customer base that was always ready to consume any product availed to them by the company, but despite that, the company still suffered many times due to bad decisions made by the board and the company shareholders


Olenick, M. (2016, March 24). The Marvel Way: Restoring a Blue Ocean [PDF]. INSEAD: The Business School for the World.

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