Focused Case Analysis #1: Horror Show at the Cinemaplex? This case is an industry [not company] study, highlighting the threatening conditions negatively affecting the potential for theater owner profitability. As such, the case provides an excellent opportunity to take stock of the film industry environment, competitive forces facing various segments of the industry – particularly the distribution end – and to craft strategic alternatives designed to ensure profitability and create superior value for the movie-going public. Your case assessment is to focus directly on the following questions [and should draw selectively on the first 5 chapters of the text, as well as your outside research]. Note: In addition to studying the Horror Show/Cinemaplex case, do sufficient outside research on the industry to bring the case information up to date [the case itself was written in 2009, but much of the information you’ll see in the case narrative references events and conditions during or prior to the 2007-2008 time frame. 1 – As just referenced in the Note above, briefly outline significant events and/or changes impacting the various segments of the motion picture industry over the past 2 or so years – drawn from trade news sources, the business press [WSJ etc.], corporate Web sites and others as needed. A minimum of 5 sources is expected. Your task in this first section, in other words, is to update the case information with data and information relevant to the film/theater industry. 2 – Identify and describe 3 of the most salient facets of the external [i.e., general] environment facing the motion picture industry, taking into account both the written case information and your research update. Draw a conclusion as to how the industry will be affected by these external factors over the next 5-10 years. 3 –Use the five forces model of competitive rivalry to analyze the cinema industry in the U.S. [Be sure to draw a conclusion as to the “relative level or degree” in each instance, e.g., is “supplier power” low, moderate or high, and same for threat of new entrants, buyer power [customers], product substitutes and instensity of rivalry.] Consider the various facets of the industry as you prepare your analysis . . . including but not limited to motion picture studios, theaters companies/complexes, and of course customer audiences. 4 – What are the advantages and disadvantages of each of the top 4 competitors’ situations and strategic approaches? It may be useful to construct a table/matrix laying out a comparison of their market focus, number of theater locations, total number of available screens, average number of screens per site, average ticket price, and cost per screen [using updated data from your research if/as available]. Then, identify the advantages and disadvantages of each of the competitors’ positions/strategic approaches. 5 – What are the financial considerations affecting the profitability of major movie theater businesses? Dissect the revenue structure of these firms [i.e., ticket, concession and advertising sales], identify earnings barriers faced by movie theater managers, and evaluate significant factors on the cost side of the equation. 6 – Today, cinemas are operating from a position of weakness, competing against substitute products/services, constrained by supplier power and managing an unprofitable business model. Given these circumstances, how can industry leaders minimize pressures which are squeezing earnings from all directions AND develop conditions which create superior value for customers? As you consider possible business-level strategies [pros and cons], present at least 3 feasible strategic alternatives that will enhance performance and help ensure the future viability of the theater operators. [Feel free to consider both smaller scale actions as well as larger scale cooperative strategies and facility redesign.] Format, Length and Presentation Use the current APA style guide in preparing your report. Attach the standard University cover sheet to the report. [See separate link.] Length of narrative: 7 to 10 pages [double-spaced]. Table of contents not required; include Appendix [for tabular data] and a Reference sheet at the end that will show the source(s) cited within your narrative. Use sub-headings to clearly indicate the subject matter and/or question that any given section of your narrative focuses on. Correct use of grammar and spelling is expected, and will affect one’s grade on this case report.
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