The Movie Industry in 2008 (Case A & B)
MBA Student: Waseem Hasan Ismail
Submit to: TAGSB Administration
27 February 2013
Table of Contents
Introduction 3
The Movie Industry in 2008 (Case A) 4
PESTEL Analysis – External Environmental 4
Porter’s five Analysis 4
Profitability Model for movie theaters 4
Key strategic issues facing movie theaters 4
Strategic actions that exhibitions might consider 4
The Movie Industry in 2008 (Case B) 4
Outlook for the movie industry improved by 2011 4
Strategic actions might exhibitors take in 2011 and beyond to improve their situation 4
References 4
Introduction
The movie industry had benefited from the technology development such as the digital camera and digital screens in the sense of suspense and excitement. However, this technology had become a big challenge to the management in the motion picture industry value chain. This technology encourages the moviegoers to experience watching a movie at house with the same picture’s quality resolution and the sound’s effects as the theaters providing for audiences.
The management dilemma is at maximizing their revenue and profit which falls into two difficult components; the uncontrollable and unpredicted revenue and limited profit. Because of the ticket price exposed to competition and each chain is serving different geographic market, thus the ticket price can’t be increased more. Also, the revenue streams components are limited and ticket sales revenue is the main contributor in the business of exhibition. Moreover, the cost of producing the movie is becoming higher.
The value chain theatrical movie picture:
Consumption
Exhibitions
Distribution
Production
The Movie Industry in 2008 (Case A)
PESTEL Analysis – External Environmental
Political factors: the United States Government is encouraging the movie production using the incentives pay to the producers
References: 1- http://en.wikipedia.org/wiki/Movie_production_incentives_in_the_United_States 2- http://en.wikipedia.org/wiki/Cinema_of_the_United_States#Hollywood_and_politics 3- http://www.poynerspruill.com/publications/Pages/LegalIssuesinFilmProduction.aspx 4- http://www.eurekalert.org/pub_releases/2011-08/icl-gst082211.php 5- http://www.guardian.co.uk/film/2011/jun/14/us-film-industry-growth-forecast 6- http://www.the-numbers.com/market/ 7- http://business.time.com/2009/12/07/movie-theaters-make-85-profit-at-concession-stands/ 8- http://www.hbs.edu/faculty/Publication%20Files/05-059.pdf 9- http://moneysoft.com/wp-content/uploads/2010/04/ibisi1.pdf