Case Study Movie Exhibition Industry
Strategic Analysis of Movie Exhibition Industry
By: Kim Saline
February 24, 2010
Objective:
To provide an analysis and make recommendations to increase revenue in the movie exhibition industry.
Overview:
Ticket sales for movie theaters are at their lowest point since 1996. With the core demographic group expected to grow slower than the US population and with technological advances growing at speeds faster than the industry can keep up, ticket sales will continue to decline if the current business strategy continues to be followed.
Concession sales and ticket sales are the two biggest sources of revenue for a movie theater. Both continue to increase in cost to the consumers and may have reached a price point that is starting to drive consumers away from going to see a movie.
With the advancements in home entertainment systems consumers are investing thousands of dollars into their own home viewing systems. They have several options to stream video content into the comfort of their own homes. Theaters have implemented digital content and 3D but it’s not enough to keep up with the competition of technology.
My analysis will give you information on the threat of competition from substitutes and the change in buyer behavior and demographics. I will use the five-forces model of competition and a SWOT analysis along with other sources of analysis. The information and recommendations that follow will provide you with the insight and building blocks to compete in the movie exhibition industry.
Analysis:
● SWOT
1. Internal strengths: digital technology, 3D capability, the current real estate/locations of theaters, the venues lend themselves usable for many alternatives, economies of scale gives them buying power in the concession industry
2. Internal weaknesses: marketing of their product (movies), innovation, no competitive advantages, and the split of box office sales with distributers, reliance of concession sales and advertisements for
By: Kim Saline
February 24, 2010
Objective:
To provide an analysis and make recommendations to increase revenue in the movie exhibition industry.
Overview:
Ticket sales for movie theaters are at their lowest point since 1996. With the core demographic group expected to grow slower than the US population and with technological advances growing at speeds faster than the industry can keep up, ticket sales will continue to decline if the current business strategy continues to be followed.
Concession sales and ticket sales are the two biggest sources of revenue for a movie theater. Both continue to increase in cost to the consumers and may have reached a price point that is starting to drive consumers away from going to see a movie.
With the advancements in home entertainment systems consumers are investing thousands of dollars into their own home viewing systems. They have several options to stream video content into the comfort of their own homes. Theaters have implemented digital content and 3D but it’s not enough to keep up with the competition of technology.
My analysis will give you information on the threat of competition from substitutes and the change in buyer behavior and demographics. I will use the five-forces model of competition and a SWOT analysis along with other sources of analysis. The information and recommendations that follow will provide you with the insight and building blocks to compete in the movie exhibition industry.
Analysis:
● SWOT
1. Internal strengths: digital technology, 3D capability, the current real estate/locations of theaters, the venues lend themselves usable for many alternatives, economies of scale gives them buying power in the concession industry
2. Internal weaknesses: marketing of their product (movies), innovation, no competitive advantages, and the split of box office sales with distributers, reliance of concession sales and advertisements for
Bibliography: Blank, S.. (2012, Jan. 4 ). In Why the Movie Industry Can 't Innovate and it 's Result is SOPA. Retrieved Feb. 16, 2012, from http://bx.businessweek.com/movies/view?url=http%3A%2F%2Fsteveblank.com%2F2012%2F01%2F04%2Fwhy-the-movie-industry-cant-innovate-and-the-result-is-sopa%2F Dess, Lumpkin, Eisner, McNamara. (2011). Capstone: Strategic Management. New York, NY: McGraw-Hill. Hoehn, J.. (2011). Diffusion of Technological Innovation in the Media Industry. (Doctoral dissertation, Wilmington University,). Dissertation Abstracts International, (UMI No. 390559) Kaczanowska, A.. (2012, Feb). Movie Theaters in the US. IBISWorld. Retrieved Feb 2012, from IBISWorld McKenzie, J. (2010). The Economics of Movies: A literature Survey. Journal of Economic Surveys, 26 (1), pp. 42-70.