Marvel Studios Case Study

The creation of Marvel Studios is a fantastic example of value innovation that utilized all four quadrants of the ERRC grid. Marvel eliminated significant deadweight present in the traditional studio system, Cuneo states “If they were making a film for $100 million… we could make it for $70 million. Same talent, same quality film. But we weren’t dragged down by these latent unproductive assets that the studio system has.” These assets included empty sound staged, unused backlots, and executive perks like fancy cars. The frugal Toy Biz culture resulted in old office furniture, no free lunches, a studio located above a car dealership, but notably, record profits.

Marvel reduced the cost of actors well below the studio standard through a strategy of hiring talented actors who were for various reasons out of favor with Hollywood – for example Robert Downey Jr.’s alcoholism or Gwyneth Paltrow’s acting sabbatical to be a mother. By possessing the foresight to lock these talented actors into long contracts Marvel saved enormous amounts of money on initial acting costs than had they hired an A lister, and also locked in that actors’ lower fee for a lengthy amount of time. Cuneo says “Our strategy from the beginning was that our characters were the heroes of the films… we did not need expensive talent.” Often in Hollywood big name actors are attached to a project that could not succeed on account of its writing or story; Marvel put their focus into creating a good movie rather than selling a mediocre one. Marvel as a whole was fresh off significant layoffs that claimed the jobs of much of the middle management. This allowed for a lean decision making process at Marvel Studios, where risks could be taken and offers extended in mere hours.

Marvel raised the bar of filmmaking by creating a “Creative Committee consisting of lead comic book editors and company executives to ensure integrity of characters and storylines.” By caring for the longevity of and developing their characters, Marvel ensured success of the Marvel Cinematic Universe, a series of movies that featured characters supporting each other before eventually getting their own movie, similar to the early comic book industry.

Marvel was the first studio to create a self-sustaining franchise that could go on almost indefinitely; they’re now on their thirty-third movie and only now showing signs of diminishing quality and sales. They not only created that many movies while still retaining viewers interest, but expanded this franchise to TV (streaming) as well, doubling the amount of titles they can create. It can’t be forgotten that Marvel essentially created the superhero movie genre, or at the very least were the ones to prove that it was profitable, spurring the green light of numerous superhero titles for film and television.

Marvel is a highly unique company in that they were at the verge of bankruptcy, completely noncompetitive, and when backed against the wall created an entirely new industry, a blue sea. They are also unique in that while doing this, they utilized all four quadrants of the ERRC grid, with each being equally essential to their success.