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Running Head: CASE ANALYSIS: THE MOTION PICTURE INDUSTRY VALUE CHAIN 1
Case Analysis: The Motion picture Industry Value chain
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CASE ANALYSIS: THE MOTION PICTURE INDUSTRY VALUE CHAIN 2
Case Analysis: The Motion picture Industry Value chain
Introduction
Motion Industry is one of the most important industries which has a strong economic
importance in the global economy. It is the key industry which focuses on different aspects of
entertainment products. The motion picture is considered to one of the most crucial industry in
US as it is considered to be one of the most important factors that contributes to the economy of
the country as well as the culture. Advertising is considered as one of the biggest marketing
expenditure which helps in attracting more and more viewers for the movie. The movie
advertisement helps the viewers to associate themselves with the film which helps in enhancing
the revenue generated from the movie.
Environmental Analysis:
For analyzing the environment of the business, it is important for the industry to analyze
its internal as well as external environment with which they are able to analyze and design
different strategies which are used by the industry.
Five Force analyses:
Five force analysis is a model that was proposed by Michael Porter to analyze the
industry in which the firm is operating, This model is used for the industry analysis, this model
brings into picture the competitive position of a firm in the industry in which it operates, it brings
into picture the bargaining power of suppliers, buyer, intensity of rivalry, substitutes and entry
and exit barriers. With this the organization is able to analyze the competitive position in the
industry where they are operating.
Intensity of Rivalry among incumbent firms:
CASE ANALYSIS: THE MOTION PICTURE INDUSTRY VALUE CHAIN 3
Considering the intensity of rivalry in the motion picture industry, we can say that the
industry is a highly competitive industry, with different brands operating in the industry. The
companies compete on the basis of the quality of the products, customer service and variety of
products. The four main companies which are dominant in the industry are: Regal, AMC,
Cinemark and Carmike. There is only little differentiation in the offerings by these companies.
The competition is based on the distance, service, parking convenience etc.
Threat of New entrant:
Considering the big firms operating in the segment, the threat of new entrant is low. With
strong brands the new entrants find it difficult to compete in the market with the existing firms
on the basis of price and brand. There are several factors and strategies that affect the entry of
new entrants.
Threat of Substitutes:
The threat of substitute for motion picture industry is very minimal.
Bargaining power of Suppliers:
The bargaining power of suppliers is low as the firms on the basis of their market share
and the revenues generated by the theater is the main drive which marks the bargaining power of
the supplier.
Bargaining power of Buyers:
The bargaining power of buyers is low as there is no substitute of this industry.
PESTLE Analysis:
The external environment faced by the firm and its business units affects the strategy of
the firm, the value of the strategy, and thus the firm’s performance. Environmental analysis is
considered to be an active input which helps in identifying different threats and opportunities a
CASE ANALYSIS: THE MOTION PICTURE INDUSTRY VALUE CHAIN 4
firm is likely to face which will help in formulating different strategies for competing in the
competitive market. External analysis takes into consideration competitive analysis as well as
industry analysis.
PESTLE Analysis takes into consideration different remote factors of the environment in
which it operations.
Political – Legal Analysis:
All the industries are highly governed by different laws and political constraints. Being in
a global business, there are several government rules and laws that the company needs to follow
in a particular nation of its operations. For the motion picture industry, there are several laws and
organization which are made and the movie needs to be passed through the board.
Economic Factors:
The world has recently witnessed economic downturn which has affected the levels of
income and currency instability across the globe. The level of unemployment has increased
considerably with the economic down turn which has resulted in...