Strategy Capsule 11.1 compares alternative strategies for exploiting children’s
ID: 362515 • Letter: S
Question
Strategy Capsule 11.1 compares alternative strategies for exploiting children’s characters. Hello Kitty is owned by the Japanese company Sanrio Co. Ltd. and is exploited throughout the world through licensing contracts with toy makers, jewelry companies, fashion companies, restaurants, theme parks, retail stores, and many other types of businesses. Could Hello Kitty be exploited more effectively by a vertically integrated entertainment company, such as Disney?
STRATECY CAPSULE 11.1 Vertical Integration in the Entertainment Indust Frozen versus Harry Potter 11 Harry Potter video Electronic Arts. Over the past two decades integration between con- tent producers (fhim studios, music publishing) and dis- tribution companies (theaters, TV broadcasting, cable companies, satellite TV digital streaming) has reshaped games were A Harry Potter attraction opened at Universal Orlando Resort in 2010, while a War Harry Potter studio tour opened in the UK in 20 the entertainment industry. Key players include: Harry Potter copyrights and trademarks have licensed to Mattel, Coca- Cola, Lego, Hasbro, Time Warner Inc. (Warner Bros. Studios, New Line Cinema, Castle Rock, Time magazines, Warner Cable 21°Century Fox (20th Century Fox, Fox Broadcasting Comcast Corp. (Universal Pictures, NBC, Telemundo, Viacom (Paramount Pictures, MTV, BET, Nickelodeon, Disney Theatrical Tonner Doll Company, Whirlwood M and other companies for the production clothing, and other products HBO, Turner Broadcasting, Cartoon Network, CNN) agic War of Sky TV, MySpace) Comcast Cable, Universal Parks and Resorts) Frozen is a computer animated film inspired Christian Andersen's The Snow Queen, produc Walt Disney Animation Studios, and re Disney Pictures in 2013. Within eight months it gen- erated $1.2 bilion in worldwide box office revenue Prior to release, Frozen was promoted heavily at · by Comedy Central) Walt Disney(Walt Disney Studios, Pibar, released by Walt Productions, Walt Disney Records,Walt Disney Pictures, ABC, ESPN, Disney Channel, Disney Online). Disney The mergers creating these integrated production theme parks. Commercial spinoffs from the movie and its lead characters, Elsa and Anna, include: and distribution companies have not all been success- ful: AOL's 2000 merger with Time Warner and the acqui- range of merchandise including dolls, costumes and 'home décor, bath, textile, footwear, sporting goods, consumer electronics, and pool and sum- mer toys" developed by Disney Consumer Products sition spree that transformed Compagnie Générale desa Eaux into Vivendi Universal were disasters. To illustrate the relative merits of vertical integration and market-based contracts, consider the commercial exploitation of the fictional characters from Harry Potterand sold through Disney Stores and independent with those of Frozen channels DVD and Blu-ray releases by Walt Disney Stud Home Entertainment; HARRY POTTER Seven HarryPotter novels written by J. KRowling were published by Bloomsbury in the UK and Scholastic Press in the US between 1997 and 2 with total sales of 240 million (to 2014) .avideo game launched by Disney Mobile for hand held devices a Broadway stage musical adaptation by Disney Theatrical (under development in 2014) 007 Film rights were acquired by Warner Bros, which produced eight movies generating $7.7 billion in box office receipts. temporary Anna and Elsa attractions ed in Disney theme parks during 2014; a larger sa Frozen ride was under consideration.Explanation / Answer
I think Hello Kitty can be exploited more effectively by vertical partnership of another entertainment company whose characters are more famous among the children. Children would be more excited when they could see their favorite characters together and Hello Kitty would be able to make advantage of this with its counterpart. Disney is so popular among kids that the logo itself attracts kid’s attention. A vertical integration helps Hello Kitty in providing flexibility to meet the changing circumstances in the toy industry. New ideas can be developed out of the relationship. Starting theme parks and making movies in vertical integration with Disney with combination of both company characters would help to make more profit in business. A trust based mutually beneficial relationship between Hello Kitty and the entertainment company would help to sustain in the market for a long period.