Horror Show at the Cineplex
A Horror Show at the Cineplex
A Horror Show at the Cineplex
Perform a comprehensive analysis of the five (5) competitive forces. Discuss what level of competition can be anticipated amongst industry rivals. There are five competitive forces that should be analyzed in order to forecast the profit margin of a company and its return on equity. These include ease of entry, rivalry between existing competitors, pressure from substitute products, bargaining power of buyers, and bargaining power of suppliers. In regards to the ease of entry, there are many factors that a new entrant faces while trying to enter the movie theater industry. These factors include capital requirements, economies of scale, secure distribution channels, strong brand identification, government policy, technological differences, expected retaliations, and absolute cost advantages (Mukherjee, A., & Kadiyali, V., 2011). The cost of entering the movie theater industry is substantially high, particularly with the evolving introduction of new technology. Additionally, there are operational barriers to entry due to problems in obtaining access to movie products from major distributors (Mukherjee, A., & Kadiyali, V., 2011). The number of competitors, relative strength of the competitors, strength of the competitor’s relationship with film distributors, the industry growth potential, concession product differences, and the difference between entertainment qualities all affect the rivalry between existing competitors. Competitive rivalry within the movie theater industry is medium to highly competitive. Movie theaters that are located geographically close to one another have fiercer competition among them, while theaters that are not located by others have to worry about less competition. If there are two or more theaters that are located close to one another, the similarity of the products and movies they offer is most likely going
A Horror Show at the Cineplex
Perform a comprehensive analysis of the five (5) competitive forces. Discuss what level of competition can be anticipated amongst industry rivals. There are five competitive forces that should be analyzed in order to forecast the profit margin of a company and its return on equity. These include ease of entry, rivalry between existing competitors, pressure from substitute products, bargaining power of buyers, and bargaining power of suppliers. In regards to the ease of entry, there are many factors that a new entrant faces while trying to enter the movie theater industry. These factors include capital requirements, economies of scale, secure distribution channels, strong brand identification, government policy, technological differences, expected retaliations, and absolute cost advantages (Mukherjee, A., & Kadiyali, V., 2011). The cost of entering the movie theater industry is substantially high, particularly with the evolving introduction of new technology. Additionally, there are operational barriers to entry due to problems in obtaining access to movie products from major distributors (Mukherjee, A., & Kadiyali, V., 2011). The number of competitors, relative strength of the competitors, strength of the competitor’s relationship with film distributors, the industry growth potential, concession product differences, and the difference between entertainment qualities all affect the rivalry between existing competitors. Competitive rivalry within the movie theater industry is medium to highly competitive. Movie theaters that are located geographically close to one another have fiercer competition among them, while theaters that are not located by others have to worry about less competition. If there are two or more theaters that are located close to one another, the similarity of the products and movies they offer is most likely going
References: Hitt, Ireland, & Hoskisson. (2011). Strategic Management. Mason, OH: South-Western Cengage Learning. Mukherjee, A., & Kadiyali, V. (2011). Modeling Multichannel Home Video Demand in the U.S. Motion Picture Industry. Journal Of Marketing Research (JMR), 48(6), 985-995. doi:10.1509/jmr.07.0359 Regal Entertainment, G. (0005, April). Regal Entertainment Group Announces New Forms of Digital Cinema Access. Business Wire (English).