Question

In: Operations Management

In our textbook, we learn that Disney has acquired several companies throughout the years including Marvel...

In our textbook, we learn that Disney has acquired several companies throughout the years including Marvel for $4 billion in 2009. One main advantage that this acquisition allowed Disney to do is increase the differentiation in their product offerings. They were able to add and entire line of superheroes to the Disney character family, which also allowed to add Marvel character theme park rides, toys, and other merchandise. Not only did this benefit Disney, but the acquisition also added value to Marvel. "Because of economies of scope and economies of scale, Marvel is becoming more valuable inside Disney than as a standalone enterprise" (Rothaermel).

Our question for you is, besides being able to increase their product offerings, what other benefits do you think this acquisition brought to Disney as a company?

Solutions

Expert Solution

It is to be primarily noted that Disney is one of the largest company in the world on the basis of its market valuation. In terms of Company, it is one of the most reputed one and has certainly created a brand around it through its absolute uniqueness, innovation and creativity.

Disney has boost its earning that pertains to their Studio Entertainment segment through acquiring Marvel. It has turned out to be a stronger brand it terms of the blockbuster movie hits that its boasts, thanks to the acquisition of Marvel and owing to the box office collections and the license fees corresponding to the same. The box-office collection of the past five movies of Marvel depicts that the investment that was made seven years back, are reaping significant benefits today. Besides, there has been a positive Domino’s effect across several other sections of Disney, apart from the ones mentioned above in the question, such as making way to small screen media like on Netflix successfully by way of such TV shows that are based on Marvel characters.


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