Regal Entertainment Group: Addressing Industry Dependency and Differentiation

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Regal Entertainment Group: Addressing Industry Dependency and DifferentiationClaire Fuller BA 301 Final Term Paper
Section 003
June 6, 2012
Claire Fuller
BA 301 Final Term Paper
Section 003
June 6, 2012
|
Executive Summary
Regal Entertainment Groups is the parent company of Regal Cinemas, which is made up of Regal Cinemas, the United Artists Theaters, and the Edwards Theater. It runs the largest theater circuit in the U.S., and uses the multiplex cinema model in metropolitan and metropolitan growth areas.

The movie theater industry is highly competitive, both within the film entertainment industry (as with Netflix and pirated films) and with substitute goods, such as live performances, restaurants, and sporting events. In addition, industry competitors have an extremely low level differentiation from one another, which is partially due to the reactive nature of the industry. It is also due to the considerable dependency on major film production companies.

Regal’s dependency on the film production companies for profitable films and film advertising contributes to its lack of differentiation from its major competitors, which hinders its profitability potential in a market of ambivalent consumers.

This report recommends that Regal pursue both an active advertisement campaign team to deliver the message of Regal’s value directly to the consumer (a practice not traditionally observed in the movie theater industry) to create brand recognition, and forge partnerships and agreements with live performance venues, utilizing Regal’s existing digital technology. By doing so, Regal could increase its profit margins, decrease its dependency on quantity and quality of mainstream film companies, create greater value to consumers and stakeholders, and provide new entertainment possibilities and community experiences that have not been available on this scale before.

Position
Company Overview
Regal Entertainment Group was created out of a consolidation of the Regal Cinemas, the United Artists Theaters, and the Edwards Theaters in 2002 (“Regal Entertainment Group Company History”). Regal Cinemas are primarily a line of multiplex, first-run theaters in urban, metropolitan, and suburban growth areas. It currently operates the largest theater circuit in the United States, with 520 theaters, averaging 12.6 screens per location, with a total of 6,558 screens. (Form 10-K 4) It is currently one of the ‘big three’ competitors in this industry. Mission, Vision, and Values

Regal Entertainment does not currently have a mission or vision statement. It would be advisable to create such statements in order to improve investor and employee understanding of what Regal hopes to be, and better focus its efforts and attempts to solve current and future problems (Yuthas 9-10). However, their business strategies listed on the Regal Investor Relations webpage provide some insight into the company’s values. The four strategies listed are maximizing stockholder value, pursuing selective growth opportunities, pursuing premium experiences opportunities, and pursuing strategic acquisitions and partnerships. Combining these strategies with their metropolitan multiplex approach, their business landscape shows a drive to expand, using economies of scale to create value for the viewer, as well as their partners and suppliers. Their activities will better reflect their values, and will be discussed in greater length in this report, under the Current Activities section. Key Stakeholders

Regal’s key stakeholders include the usual categories: stockholders, suppliers, employees, and business partners. Regal’s main suppliers are their food and beverage suppliers and the major movie production companies that Regal depends on for their first-run films. The food and beverage suppliers include beverage companies like the Coca-Cola Company, and confectionary companies like Tootsie Roll Industries, Cadbury Schweppes, and the American Licorice Company....
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