Sustaining Advantage

The Wall Street Journal's Heard on the Street column focuses on Hasbro today. It lauds the firm for not simply relying on licensed content from movie studios to sell toys. Instead the firm has turned some of it's own toy properties into movies. In that way, the firm has driven toy sales without having to share profit with someone else who owns the intellectual property. Rightfully, though, the column questions whether Hasbro has chosen the best properties to make into movies and whether they can continue to sustain this early success. Hasbro has done a great job and does have many interesting properties in the portfolio. There is a lesson here for all firms though. Investors will build early blockbuster hits into their expectations. One has to manage those expectations carefully, because it may be hard to sustain that performance.