Are Movie Theaters Doomed? Do Exhibitors see the Big Picture as Theaters lose their Competitive Edge? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of Are Movie Theaters Doomed? Do Exhibitors see the Big Picture as Theaters lose their Competitive Edge?
After three straight years of decline, movie theaters in the US may have recently ended a period of crisis with an increase in annual admissions (+3%) in 2006. This articles argues, however, that major problems are not over for the industry. Most movie theaters in the multiplex era have adopted a remarkable similar strategy, one which is also very vulnerable to recent trends such as the explosion of home cinema, pay TV, video-on-demand (VOD), discounting by Mass merchandisers of DVDs, computer games, and the collapse of video windows. Just as technological convergence has created a challenge for movie theaters, as it has in the past, so too can new technologies and creative use of assets (combined with multiple target marketing) offer a counter measure for at least some movie theaters; at least so many multiplexes offer the same format as their competitors, appear to adopt a narrow definition of what business they are in, and manifest a 'one-size-should-fit-all' approach to customers, The industry has employed differentiation and niche marketing much less than other industries. As the extensive variety of necessary strategies cannot comprehensively be explored herein, this article focuses on two new technologies from the IMAX corporation, DMX and MPX, as an example of how a theater operator might counter audience declines.
Swot Analysis of "Are Movie Theaters Doomed? Do Exhibitors see the Big Picture as Theaters lose their Competitive Edge?" written by Jon Silver, John McDonnell includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Theaters Movie facing as an external strategic factors. Some of the topics covered in Are Movie Theaters Doomed? Do Exhibitors see the Big Picture as Theaters lose their Competitive Edge? case study are - Strategic Management Strategies, and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Are Movie Theaters Doomed? Do Exhibitors see the Big Picture as Theaters lose their Competitive Edge? casestudy better are - – cloud computing is disrupting traditional business models, increasing government debt because of Covid-19 spendings, talent flight as more people leaving formal jobs, competitive advantages are harder to sustain because of technology dispersion, increasing household debt because of falling income levels, banking and financial system is disrupted by Bitcoin and other crypto currencies, geopolitical disruptions,
wage bills are increasing, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Are Movie Theaters Doomed? Do Exhibitors see the Big Picture as Theaters lose their Competitive Edge?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Are Movie Theaters Doomed? Do Exhibitors see the Big Picture as Theaters lose their Competitive Edge? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Theaters Movie, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Theaters Movie operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Are Movie Theaters Doomed? Do Exhibitors see the Big Picture as Theaters lose their Competitive Edge? can be done for the following purposes –
1. Strategic planning using facts provided in Are Movie Theaters Doomed? Do Exhibitors see the Big Picture as Theaters lose their Competitive Edge? case study
2. Improving business portfolio management of Theaters Movie
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Theaters Movie
Strengths Are Movie Theaters Doomed? Do Exhibitors see the Big Picture as Theaters lose their Competitive Edge? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Theaters Movie in Are Movie Theaters Doomed? Do Exhibitors see the Big Picture as Theaters lose their Competitive Edge? Harvard Business Review case study are -
Ability to lead change in Sales & Marketing field
– Theaters Movie is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Theaters Movie in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Learning organization
- Theaters Movie is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Theaters Movie is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Are Movie Theaters Doomed? Do Exhibitors see the Big Picture as Theaters lose their Competitive Edge? Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Analytics focus
– Theaters Movie is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Jon Silver, John McDonnell can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Effective Research and Development (R&D)
– Theaters Movie has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Are Movie Theaters Doomed? Do Exhibitors see the Big Picture as Theaters lose their Competitive Edge? - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Sustainable margins compare to other players in Sales & Marketing industry
– Are Movie Theaters Doomed? Do Exhibitors see the Big Picture as Theaters lose their Competitive Edge? firm has clearly differentiated products in the market place. This has enabled Theaters Movie to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Theaters Movie to invest into research and development (R&D) and innovation.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Theaters Movie digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Theaters Movie has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Innovation driven organization
– Theaters Movie is one of the most innovative firm in sector. Manager in Are Movie Theaters Doomed? Do Exhibitors see the Big Picture as Theaters lose their Competitive Edge? Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High switching costs
– The high switching costs that Theaters Movie has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Low bargaining power of suppliers
– Suppliers of Theaters Movie in the sector have low bargaining power. Are Movie Theaters Doomed? Do Exhibitors see the Big Picture as Theaters lose their Competitive Edge? has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Theaters Movie to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of Theaters Movie in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– Theaters Movie is present in almost all the verticals within the industry. This has provided firm in Are Movie Theaters Doomed? Do Exhibitors see the Big Picture as Theaters lose their Competitive Edge? case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Highly skilled collaborators
– Theaters Movie has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Are Movie Theaters Doomed? Do Exhibitors see the Big Picture as Theaters lose their Competitive Edge? HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Are Movie Theaters Doomed? Do Exhibitors see the Big Picture as Theaters lose their Competitive Edge? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Are Movie Theaters Doomed? Do Exhibitors see the Big Picture as Theaters lose their Competitive Edge? are -
Skills based hiring
– The stress on hiring functional specialists at Theaters Movie has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
High cash cycle compare to competitors
Theaters Movie has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Products dominated business model
– Even though Theaters Movie has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Are Movie Theaters Doomed? Do Exhibitors see the Big Picture as Theaters lose their Competitive Edge? should strive to include more intangible value offerings along with its core products and services.
Need for greater diversity
– Theaters Movie has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High bargaining power of channel partners
– Because of the regulatory requirements, Jon Silver, John McDonnell suggests that, Theaters Movie is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Interest costs
– Compare to the competition, Theaters Movie has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Slow to strategic competitive environment developments
– As Are Movie Theaters Doomed? Do Exhibitors see the Big Picture as Theaters lose their Competitive Edge? HBR case study mentions - Theaters Movie takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
High operating costs
– Compare to the competitors, firm in the HBR case study Are Movie Theaters Doomed? Do Exhibitors see the Big Picture as Theaters lose their Competitive Edge? has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Theaters Movie 's lucrative customers.
Capital Spending Reduction
– Even during the low interest decade, Theaters Movie has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Increasing silos among functional specialists
– The organizational structure of Theaters Movie is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Theaters Movie needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Theaters Movie to focus more on services rather than just following the product oriented approach.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Are Movie Theaters Doomed? Do Exhibitors see the Big Picture as Theaters lose their Competitive Edge?, it seems that the employees of Theaters Movie don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Opportunities Are Movie Theaters Doomed? Do Exhibitors see the Big Picture as Theaters lose their Competitive Edge? | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Are Movie Theaters Doomed? Do Exhibitors see the Big Picture as Theaters lose their Competitive Edge? are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Theaters Movie can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Leveraging digital technologies
– Theaters Movie can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Learning at scale
– Online learning technologies has now opened space for Theaters Movie to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Building a culture of innovation
– managers at Theaters Movie can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Sales & Marketing segment.
Better consumer reach
– The expansion of the 5G network will help Theaters Movie to increase its market reach. Theaters Movie will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Loyalty marketing
– Theaters Movie has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Theaters Movie can use these opportunities to build new business models that can help the communities that Theaters Movie operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. Theaters Movie can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Developing new processes and practices
– Theaters Movie can develop new processes and procedures in Sales & Marketing industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Sales & Marketing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Theaters Movie can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Theaters Movie can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Theaters Movie in the consumer business. Now Theaters Movie can target international markets with far fewer capital restrictions requirements than the existing system.
Manufacturing automation
– Theaters Movie can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Theaters Movie in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing segment, and it will provide faster access to the consumers.
Threats Are Movie Theaters Doomed? Do Exhibitors see the Big Picture as Theaters lose their Competitive Edge? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Are Movie Theaters Doomed? Do Exhibitors see the Big Picture as Theaters lose their Competitive Edge? are -
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Theaters Movie business can come under increasing regulations regarding data privacy, data security, etc.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Theaters Movie.
Shortening product life cycle
– it is one of the major threat that Theaters Movie is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Stagnating economy with rate increase
– Theaters Movie can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Are Movie Theaters Doomed? Do Exhibitors see the Big Picture as Theaters lose their Competitive Edge?, Theaters Movie may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
Regulatory challenges
– Theaters Movie needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Sales & Marketing industry regulations.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Theaters Movie in the Sales & Marketing industry. The Sales & Marketing industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Theaters Movie will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
High dependence on third party suppliers
– Theaters Movie high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Consumer confidence and its impact on Theaters Movie demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Environmental challenges
– Theaters Movie needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Theaters Movie can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Theaters Movie in the Sales & Marketing sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Are Movie Theaters Doomed? Do Exhibitors see the Big Picture as Theaters lose their Competitive Edge? Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Are Movie Theaters Doomed? Do Exhibitors see the Big Picture as Theaters lose their Competitive Edge? needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Are Movie Theaters Doomed? Do Exhibitors see the Big Picture as Theaters lose their Competitive Edge? is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Are Movie Theaters Doomed? Do Exhibitors see the Big Picture as Theaters lose their Competitive Edge? is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Are Movie Theaters Doomed? Do Exhibitors see the Big Picture as Theaters lose their Competitive Edge? is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Theaters Movie needs to make to build a sustainable competitive advantage.
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