Cinema City Analysis

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Cinema City
Strategic analysis

Pawe? Majchrzak

I.History 2
II.Letter from the CEO 2
III.Goals and aims 4
IV.Managerial system and organizational structure 6 V.Financial situation 7
VI.External surrounding 8
VII.BCG matrix 9
VIII.SWOT analysis 10
IX.Porter's five forces analysis 10
X.Plans for future 14
XI.Conclusions 15

The origins of Cinema City date back to 1929 when the Greidinger family opened the first cinema in Haifa, Israel. The subsequent years were marked by the development of the company's business in the Israeli market, including such landmark events as the launch of the first multiplex in Israel in the early 1980s. Today Cinema City is opening in Israel state-of-the-art megaplexes, which will replace the first generation of mulitplex theatres. In the second half of 1990s, Cinema City began to expand internationally. The company's primary focus was Central and Eastern Europe. In 1997, the company launched its first multiplex in Budapest, Hungary, and in 1999, it entered the Czech and Polish markets. In 1999 Cinema City signed a strategic agreement with IMAX� and since that time the company has been�the exclusive operator of IMAX� theatres in Poland, the Czech Republic, Bulgaria, Romania and Hungary. In 2000 the Company opened its first multiplex in Poland - Sadyba Best mall in Warsaw.�In 2002 Cinema City achieved a leading position in Poland by acquiring four multiplexes from one of its main competitors at the time. Also in 2002 the company's New Age Media subsidiary was established to run the growing cinema advertising activity in the Cinema City multiplexes. In 2003 the company established its film distribution company - Forum Film Poland, to represent Walt Disney as well as other leading US and Polish studios in Poland.�In 2005 the film distribution company - Forum Film Hungary, was established in Hungary.�In 2006, the company opened�New Age Media Hungary. In 2004 the Company launched its activity�in Bulgaria, which culminated in 2006 with the opening of its first multiplex and IMAX� cinema in Sofia. In 2006 Cinema City signed its first lease agreements for the multiplexes in Romania. The first Cinema City multiplex in Romania opened in November 2007.

II.Letter from the CEO2
The year 2008 proved to be another record year for growth and profitability for the Cinema City Group. A combination of strong organic expansion by our company and a year of well received international and domestic movie product helped us to achieve record revenues of EUR 189.1 million, a record EBITDA of EUR 41.0 million and a record net profit of EUR 17.7 million. During the year, we continued our ambitious theatre expansion program. We invested over EUR 36 million during 2008, an increase of 75% from 2007. We opened a total of 94 new screens and closed a total of 39 obsolete screens. In December 2007, we entered Romania, our sixth territory of operation with the opening of our first two theatres in that country followed by the opening of another 2 theatres: one during 2008 and one in early January 2009. With a population of almost 22 million, recent entry into the European Union and a developing economy with virtually no modern multiplex theatres, we believe Romania will become our most active territory of development in the near future. With record sales of 22.2 million tickets in 2008, our theatre operations performed strongly. In particular, our Polish operations continued to perform well in 2008, supported not only by a fare of popular international movies, but also by a strong local supply of movies. We also had a strong year in our Israeli operations, which were enhanced by the highly successful opening of our second megaplex theatre - the 23 screen "Planet" theatre - in Haifa, and the growing success of our first "Planet"...
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