EdgeMark Cinemas are a chain of movie theaters located in 37 states with 475 theaters in those states covering the west coast, east coast, and Midwest. EdgeMark’s profits, like other cinemas, have been in a small but constant decline over the last 12 years. Industry Wide Average of 2.05% ticket sales decline per year for the last 12 years also, when adjusted for inflation, revenue has dropped an average of 1% a year for the past 12 years (Domestic Movie Theatrical Market Summary, 2015). The chain is currently looking to increase ticket sales, loyal customers, and profits by adding additional products and services.
Analyze the external and internal environment for opportunities, threats, strengths, and weaknesses that impact the firm’s competitiveness.
AMC Theatres has been an innovator in the movie theater business for more than 50 years. The chain presents one-of-a-kind specials and film offerings in state-of-the-art theater accommodations. Over the years, the chain has acquired numerous other chains, as well as acquired themselves by a large Chinese company, in turn giving the chain more than 663 theaters across the United States and China. Here are 9 interesting facts about AMC Theatres.
Identifying influencing factors of a company’s macro-environment helps in the strategic development and management within a company. The macro-environment outlines an industry and the competitive environment as seen in figure 3.1, (Gamble, Peteraf, Thompson, 39). Within the macro-environment there are the political factors, economic conditions, sociocultural forces, technological factors, environment forces, and legal/regulatory factors. All of these factors blanket the habitat an industry and its competition thrive in. Inside the industry and competitive environment there are five factors that influence an individual company. The five factors are suppliers, rival firms, new entrants, buyers, and substitute products. The biggest impact on a company are these five factors. For example, Under Armour focuses on their industry and competitive environment to survive and grow. Their strategy to win over the market share from Nike and Adidas consists of expanding a stable and original brand within record time, taking an innovative approach to their product line-up and brand-name appeal where the market seemed to be barren, and lastly, the company enters in the foreign market early on to establish its brand and influence markets outside of the US.
Regal Entertainment Group and Cinemark both, unlike AMC offer, discounted tickets for students and military, and even seniors. However, AMC does have the very popular $5 Ticket Tuesday we all know and love. Even with the different and amenities and price differences, AMC is still the place to be. AMC is a little pricier but so worth it in the sense that you’re getting what you pay for.
Organizations must not overlook the environmental factors that are outside of the organization, as they can leave a detrimental imprint on the organization and their attempts to achieve various goals. According to the textbook, “Domain defines the organization’s niche and defines those external sectors with which the organization will interact to accomplish its goals” (Daft, 2013, p. 142). Some of the external sectors include human resources, technology, economic conditions, and financial resources (Daft, 2013). Changing the organization’s domain is a feasible strategy for coping with a threatening environment because it allows the organization to remain competitive when the market changes. Organizations are constantly shifting and doing so in a rapid manner, which makes it even more likely for organizations to become unstable if action is not taken when threating environmental factors occur. Although the process may be difficult, organizations should look into changing the domain to keep up with the speed and volatility of the market. Mergers and acquisitions are two plausible options for organizations to partake in to reduce uncertainty (Daft, 2013). An organization can either purchase an organization to further their operations or merge with another organization to form a more powerful and dynamic organization. For example, Sirius and XM Radio were rivals back in the day, but merged together to provide consumers with Sirius and XM Radio for their vehicles.
Which of these forces and factors are the most important to the corporation and to the industries in which it competes at the present time? Which will be important in the future?
External environment is very important for managers to make decision about the company’s direction and strategy. In order to gain a deep understanding of Blockbuster’s industry and competitive environment, the following seven questions need to be answered. Q1: What are the industry’s dominant economic features?
External factors that will impact on our operations include competition with other companies (for customers and employees), the economy and the current climate situation. Internal Factors that will impact on our operations include unskilled workers and conflicts between co-workers due to gender or ethnicity discrimination.
The external factors can affect a firm’s position in the market. Osterwalder and Pigneur (2010) explain the different external factors as: “market forces; industry forces; key trends, and macro-economic forces” (p. 201). Market forces identifies what is driving market demand at a local level as well as customer switching costs and demand pricing. Industry forces identifies new and existing competitors in the industry, substitute products, suppliers and vendors along the value chain, and community and environmental influences. Key trends identify new emerging
IS strategy is affected by the other strategies firm uses changes in IS strategy must be accompanied by changes in other two.
This analysis consists of analyzing the external environment of the company (competitors, social, technological, regulations, etc.). The purpose is to identify the key opportunities and threats in the environment.