Competitive Rivalry in the Movie Theater Industry Research (Research Paper Sample)

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Competitive Rivalry in the Movie Theater Industry
Over the past decade, the movie theater industry has seen tremendous growth attributed to technological advancements in the telecommunication sector. This rampant growth has encouraged various investors to venture into the industry resulting to massive competition for the market share. In this paper, the competitive rivalry in the movie theater industry is discussed in close reference to the number of employees, size, culture, and communication within the sector. The research also addresses the strategies employed by different investors in developing robust competing edges that form the standards in the industry.
According to IBISWorld the movie theater industry has four basic elements namely; festival film exhibition, operating drive-in film theaters, operating movie theaters, and airline’s motion graphics exhibitions (2). These elements form the base of competition rivalry among the investors with some opting to integrate the activities in an aim of expanding their market shares and optimizing profits. IBISWorld recommends a risk score of this industry based on the anticipated future growth risk, economic forces and structure of the sector (3). Based on the report of this scholarly source, growth risk represents 25-percent, sensitivity risks account for 50 percent while structural uncertainties contribute to 25-percernt of the overall risks (4). This statistics clearly depicts the rampant competitive rivalry in the industry.
The negative growth of the movie theater sector over the recent years has raised concerns related to the ever reducing number of people attending the cinema due to the introduction of new electronics in the market (Takahashi, 2204). In the US, the movie theater industry consists of cinemas and drive-in movie based operations (IBISWorld 2). Approximately 2, 011 firms operates under this industry with close to 125, 417 permanent and part-time employees (Takahashi, 2205). The majority of these companies are owned by individuals and run by a board of directors who are mandated to oversee the operations of the firms (2207). The scholar also adds that organizations such Cinemark are owned by various mutual funds and institutions such as The Vanguard Group Inc and iShares Core S&P Mid-Cap ETF. The board of directors in these firms is composed of independent members and the chief executive officer (CEO) who is answerable to the owners and shareholders of these companies (2209).
Various strategic factors are used by firms in this industry in order to sustain their market shares by building reputable brand images and maintaining customer loyalty. However, Hudson argues that these factors act as barriers to exit for small sized companies in the movie sector (5). Digital screening technology has been utilized my many organizations as a strategy for optimizing profits by utilizing the concept of economy of scale (IBISWorld 6). Various firms have adopted the multi-screen based theaters strategy in the aim of increasing their market share and dominance (Takahashi, 2210). This intervention enables the firms to run more than one film exhibition simultaneously thus, addressing various customer needs a move that increases their market control. Product differentiation strategy has also been adopted by various companies in this industry as a measure of building a competing edge in the market (2215).
Major US firms in this industry include Cinemark, AMC Entertainment, and Regal Entertainment; industrial leaders outside the US are Odeon, Wanda, and UCI (2216). The movie theater sector can easily be differentiated from other industries due to various parameters that mark its culture. The sector is known for rampant competition and high level of volatility caused by various uncertainties attributed to structural risk and market forces (2220). Most of the executives in this industry utilize product differentiation, pricing and other marketing strategies to entice demand for their services and thus, light their path to success (2222). The industry utilizes different communication networks such as the internet, optical disks, hard drives, and unique satellite links to distribute its content to the target audience. This content is usually passed across in an animated format using symbols such as movie clips, font, button, and graphics. The movie theater industry has created some enduring heroes such as Scarlett O’Hara, Captain John H. Miller, and John McClane among other unique characters (2225).
Technological advancements have compelled the movie industry to change its communication channels a move that has reduced their operating costs substantially. These revolutions have lowered the cost of distributing movie content to the consumers by 5-percent (Hudson, 6). The internet is used in the industry to simplify the process of entering the films into contests and enabling the firms to network with the audience and other stakeholders. The digital cinema makes use of the sa...