Five Force Analysis Appendix B

Modern technology isn't disappearing and the need for movie theaters will continuously decline. If movie theater owners take the time to examine several of these options they will certainly find one that functions for them and begin to earn a revenue that is truly theirs.

To assess the industry structure and profitability, a Five Forces analysis will be conducted on the department store-retail industry.

The threat of new entrants is moderate. It is relatively easy for a company to enter this market because there are not a lot of legal barriers. But a smaller company that has just entered the market would have a tougher time competing with some of the larger companies – an obvious reason being that larger companies can have larger inventories. Another reason is that larger companies can do things to weaken the smaller companies, such as offer discounts, sales promotions, and increase spending on advertising. Since most of the companies in this industry are competing on

corrected forces. Specific data on these corrections may be found in Tables 7 and 8 in the Appendix.

On the concession side the bargaining power is weak due to economies of scale. Theaters earn most of their profits on concessions so they use their power to reduce their costs from their suppliers.

With the amount of movies being turned out these days, the average person has many things to consider when deciding what movies to watch. From genre to special effects, most people must try and decide if the movie will be worth the money spent for the actual movie going experience. When the general public can watch movies in the comfort of their own home, often for half the price, they must consider if the theater experience will add to the movie they want to see. Would it be wiser to just wait for some free version online? When considering what movie to watch, I take this and more into account.

In a theater, one can watch movies as soon as they are released without having to wait until

Porter’s five forces model describes 5 components. Buyer power, supplier power, threat of substitute products or services, threat of new entrants and rivalry among existing competitors. Using this scenario, I will explain every of these components.

If new entrants to your industry are forced to come in on a large scale and face retaliation from existing firms, this raises barriers to entry. If new firms must spend heavily up front to build a brand name, this investment is significant and discourages entry. If the use of anew company’s product requires potential users to make massive changes in their business – large investments in new equipment, extensive retraining, complete product redesign, etc., this discourages entry. High up-front costs such as advertising, research, or capital equipment will discourage entry. If the stakes are very high, entrance is limited to a few large companies having deep pockets. If distribution is limited, competition can be fierce for shelf space, etc. New entrants may have to offer price breaks and allowances to break in, or be willing to create new distribution channels. New entrants who lack experience must expect high unit costs until the firm becomes more efficient. Policy and economic treaties may influence a company’s ability to enter the market.

First, the current system of forcing consumers to go to a movie theater is no longer desirable for many. Entertainment seekers can now get almost instantaneous access to desired content whether it’s music or movies via streaming services like Netflix. These services exist due to the demand for them and to satiate the desire for content when and where the customer wants it. While my generation patiently grew up waiting for Thursday night for The Cosby Show the current generation is not oriented around content on a television or at a specific date and time. As this younger generation becomes paying customers their desires will have to be considered with all delivery based decisions.

Mezz is a small café that provides unique sharwarmas. It is owned and run by Phillip Conelly who is a sole proprietor and he employers 3 kitchen staff. The ethical and organic ingredients used in the shawarmas give Mezz its competitive edge as more people are placing emphasis on ethical claims and healthier fast food. SWOT analyses is a planning technique used to see the factors that are favourable and unfavourable to achieve a specified objective. Upper crust pies uses SWOT and discovered areas for growth in their business. Other techniques which are similar to SWOT are PEST analyses and Porters Five Force Model.

Pick any of the Five Forces and describe its key attributes. Provide an example of when this force was particularly strong in a given situation

Theatres are place for date nights, or hanging out with friend to enjoy a movie. Staying at home cuddled up with a blanket, a bowl of popcorn, and picking up the newest movie on the way home from family video is another way to enjoy a movie. Most people prefer to watch them at home than online because of new services like Netflix or Hulu. However, watching movies in a theatre compared to watching a movie at home is only a choice you can decide.

As described on page 16, Michael E. Porter five forces model, consists of five various forces.

It has been apparent that in the past few years, the number of people attending movie theaters has continued to decrease (MPAA, 2014; Harris Poll, 2014.) With various digital streaming sites like Netflix continuing to increase in consumption, (Kuittinen, 2015) people have become less motivated to go to movie theaters because of the feasibility and convenience of watching movies on various devices (Kuittinen, 2015.) According to the MPAA’s Theatrical Market Statistics 2014, there was a significant decrease in the number of movie tickets sold, by 6% (MPAA, 2014.) with only 1.26 billion tickets (MPAA, 2014; Tweedie, 2015; The Numbers, 2015.) Arguments regarding how the increase in prices for 3D and IMAX movies has also been speculated as a