License To Overkill Case Solution
Threats
- The Vice President was concerned about the longevity of the character as if the deals get done and the character become famous, it might hurt the company’s profitability in the long run if the character became faded away after getting, famous.
Porter’s 5 Force Analysis
Threat of New Entrants
The threat of new entrants for MMW is low as the licensing industry includes big players and huge financial investment. The entry barriers are high, which means that it will be difficult for new entrants to join the industry and to remain competitive in face of large players.
Threat of Substitutes
The threat of substitutes is moderate for MMW as there can be a lot of substitutes, such as: development of character by the vendors itself, which doesn’t require further licensing of the character from MMW.
Existing Rivalry
The competition within the industry is high, as there are large player in the industry, trying to grab the market share from each other. They just grant licenses to earn and get the 15 minutes and snatch the profitability and market away.
Buying Power of Suppliers
The suppliers buying power seems low for MMW, because there exists small from whom the licenses can be grabbed easily. For instance, Sheldon very grabbed the license for Baby Ruby.
Buying Power of Customers
The potential customers of MMW include studios, fast food chains and other vendors, who grab the licenses from the company. The demand for MMW’s characters indirectly come from pop market i.e. youngsters. So, the buying power of customers seem high as their demand creates a further demand of the character and ultimately, of the licenses from MMW.
Alternatives
Sheldon has two alternatives,which are:. to grant license to the largest fast food franchiser and get that three star movie for Baby Ruby or to go slow on the character by adopting other strategies in maintaining the longevity and ever green feature of the character.
Alternative -1: Granting License to Quick & Good Burger
The first alternative in front of Sheldon is to grant the largest to fast food franchiser and then signing a three star movie with the studio. The benefits from the alternative would include the profitability and publicity of Baby Ruby. However, it comes at a cost. According to Grant McCracken; the licensing will cost more than the value it gives. Sheldon himself believes in the longevity of the character and also feels that the character will provide a stream of profits in the long run if he goes slow on the product, otherwise, Baby Ruby will lose its charm as the studio is not concerned about its longevity. It just needs its profits and ratings.
Alternative -2:Maintaining the Baby Ruby’s Ever Green Feature
The second alternative for Sheldon is to maintain the ever green feature by adopting different strategies. Baby Ruby is considered a belle of the ball, but to keep its charm Sheldon has to go slow on the character. The Baby Ruby’s character is already among the top 3 rated shows, and Sheldon can use the character by starting his own licensing and merchandising program, which would complement the current TV show. Sheldon can also connect with the best manufacturers and focus on his own license program, which if goes well, will provide guaranteed better payments to the company in the long run. Sheldon can also go for Quick & Good, as it will create a positive media buzz regarding Baby Ruby but it should not give Ruby in the hands of the studios, as it will destroy the ever green feature and profitability of the character.
Recommendation & Conclusion
According to the whole analysis, Sheldon should go for second alternative. It is recommended because Baby Ruby is a potential profitable product of the company, which will become a piece of cake, if given to the hands of the studios and it will lose its ever green charm. Rather, Sheldon should start his own licensing and merchandising program in order to support the current top rated show of Baby Ruby and it should grant licenses to the potential vendors and wait for nextyear till Baby Ruby becomes the most popular character, and generates more profits for the company......................
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