Case Study – The Movie Exhibition Industry

Topics: Film, Movie theater, Movie studio Pages: 9 (2267 words) Published: October 20, 2013


[Header] Case Study – The Movie Exhibition Industry 1

Case Study: “The Movie Exhibition Industry”

Strategic Planning - BS400

October x, 2013

Overview/Introduction

My analysis will cover 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.Strengths
Digital / technological innovations provide economic opportunity •3D functionality provides greater clarity
Untapped revenues may bring in non-peak audiences
oSunday afternoons
oMonday evenings / nights
Proper geographic location of theaters boosts economic opportunity

2.Weaknesses
Advertising of their product (motion pictures)
Lack of Innovation
No competitive advantage to speak of
Sharing box office sales with similar distributers and competition •Reliance of concession sales and advertisements for income •Costly to test out the market ahead of time
Lack of focus on the social experience of consumers
High concession prices
Having to count on production business for content in order to generate sales •High ticket prices
No opportunity for product/item differentiation.

3.Opportunities (External)
Broader target audience
The development of middle class internationally
Improving the customer experience
Providing healthier concession items to consumers.

4.Threats (External)
3D TV’s
In-home theatre and sound systems
Much shorter release windows to DVD
Some hotel chains are offering their guests the opportunity to purchase and watch the same movies currently out in the theatre •Illegal downloads
Streaming online videos
Manufacturing studios innovating prior to theaters and going direct to the consumer market •Rising use of electronic media, mobile, and cloud computing capabilities

Five-Forces of Competition

1.Rivalry among the sellers: Among the top 4 motion picture exhibit business the competition is a weak force. There is no product differentiation and costs to consumers are fairly similar. The consumers are attracted to a theater by place (close distance to house), exactly what the dining options are nearby, and the sound/seating quality.

2.The threat of new entrants: Significant companies have actually formed financial investment endeavors with each various other and the film production and distribution markets in order to reduce digital conversion expense. DCIP has established a funding model between these theaters and numerous major film studios to set up digital projection and sound equipment in theaters. These theater business likewise co-own National CineMedia, which arranges in-theater marketing, business meetings and non-feature content circulation. Currently the risk of brand-new entrants is low.

3.The bargaining power of suppliers: The movie theaters are very dependent on suppliers. Production studios control the movies being made. Circulation business regulate marketing the movie and when it will be released. They likewise initiate the agreements with the theaters and work out the percentage of box workplace sales they will get. Numerous of the distribution business are integrating with the manufacturing studios due to the fact that the requirement for circulation is reducing with the conversion to digital. This makes these providers a strong force. On the concession side the bargaining power is weak due to economies of scale. Theaters earn many of their earnings on concessions so they use their power to minimize their expenses from their providers.

4.The bargaining power of buyers: The outlook...
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