Chris Zook examines how Marvel went from bankruptcy to a $4B buyout — and naturally he sees the same four-part pattern he discovered at Bain:
- The renewal of Marvel was based not on leaping to new hot markets, or dramatic new technologies, but the reapplication of the strongest assets in the company’s historic core — its loyal customer base, its stable of 5,000 characters, its library of 30,000 market-tested stories, and its brand.
- Profitability in the entertainment world has shifted dramatically from channels (e.g., stations, magazines) to proprietary content and from analog to digital. Marvel’s strategy follows the profit pool.
- The most successful strategic transformations are not those that find a large singular opportunity, but those that find a repeatable formula to take the strongest elements in its core and reapply them to new situations over and over. This is quintessentially true in the case of Marvel’s stream of movies, games, self-production initiatives, and even treatment of individual characters (e.g., Spiderman I, II, III….).
- We found that 90% of strategic comebacks were fueled, in part, by assets in the original core business when it was at its best that were adapted to a new environment and took on new value that had not been previously recognized. This was true of IBM’s service business that led its turnaround, or Harman Kardon’s automotive business that fueled its renewal, and even of Apple’s software interface differentiation and young and loyal customer base.