Running head: A Horror Show at the Cinemaplex
Assignment 4: A Horror Show at the Cinemaplex
A Horror Show at the Cinemaplex
1. Perform a comprehensive analysis of the five (5) competitive forces. Discuss what level of competition can be anticipated amongst industry rivals.
Among the 5 companies that own the majority of the theater, there is little difference in price or offerings. You don’t see ads saying come to our theater it is better that so and so company. As the text stated the theater that gets picked is usually paced on location.
A. Rivalry among existing competitors
It does not really seem like there is a lot of completion between the theaters ...view middle of the document...
Describe the advantages and disadvantages of each of the top four (4) competitors' situations and strategic approaches. The four top competitors are Regal, AMC, Cinemark’s and Carmike. The each face declining ticket sales, and have reached the consumer limit in ticket and concession prices. Carmike the smallest of the 4 may have the best chance working mainly in small rural areas where going to the movies is still the thing to do. All four are similar and really don’t attempt or see a reason to stand out from the other. I believe they in themselves are not in direct completion. They need to work together as a movement to deal with the studios. Regal and AMC are the biggest of the four and it seems their solutions are to keep adding advertising before the movie starts. I know this has backed fired with me because I have kids and nothing bites more than sit through 15 minutes of advertising and the kids have sucked down most of their 5 dollar soda even before the movie begins.
3. Describe the financial considerations that affect the profitability of major movie theater businesses.
I have to say I was surprised by how little money the theaters actually make on ticket sales. I do hate paying $3.50 for a soda but can see where the need to charge this price. The cost of getting the movie, the equipment to run the movie, the staff and the actual running cost of the theater are all big factors on the bottom line. Many of these cost can’t be controlled at the theater level, so the theater needs to look at how much they can charge for concession, and how many ads can they play before the movie before we start pushing back. (Time, 2012) (Jeff Tyson, 2012)
4. Describe what strategic options are feasible given the situation facing industry participants.
The theater owner has no power. The studios can make money on many fronts because of licensing laws. They make money selling to the theaters, then on DVD sales etc. The theater can’t charge high prices for tickets or concession because with the current economy prices for seeing a movie are close to the amount people are willing to pay. The only positive way for the theater to make money is through advertising, but you run the risk of making the movie view upset for...