CINEPLEX INC Harvard Case Solution & Analysis

PORTER’S FIVE-FORCES

BARGAINING POWER OF THE SUPPLIERS:

HIGH COMPETITION AMONGST SUPPLIERS:

The entertainment industry is highly penetrated. The numbers of suppliers who are required by organizations are in huge numbers. The existing suppliers in the industry are highly experienced and have the knowledge regarding the transforming needs of such entertainment providing organizations.

High level of competition amongst the suppliers results in transferring of power to organization like Cineplex. Cineplex has a number of suppliers to choose from. The negotiation power of these entities is strong and they can negotiate with these suppliers on their own terms and conditions.

LOW CONCENTRATION OF SUPPLIERS:

The bargaining power of the suppliers is low in the entertainment industry. Low concentration of suppliers leads in the shift of dominance from the suppliers to Cineplex. The operations of Cineplex are huge and they have the benefit of opting for any of the suppliers available in the market.

If a supplier is not willing to operate upon the terms that are set by Cineplex, they will simply consider another supplier in the industry. Cineplex will not have to spend a large amount of time upon selecting a supplier as they already don’t rely on the suppliers due to the large number of suppliers already existing in the industry.

OVERALL BUSINESS GROWTH

Cineplex can focus more upon their operational activities rather than focusing more on the supplier complexities. The company does not need to pay more attention towards the supplier negotiations, any other suppliers would already be lining up for consideration if a supplier refuses to work upon the terms set by Cineplex. These factors heavily contribute to the operations of the company and help them in growing their business overall.

BARGAINING POWER OF THE CUSTOMERS:

LOW DEPENDENCY:

The customers are the main cause of any business. The main reason for the initiations for any business is the customers. Cineplex heavily focuses upon the needs of its customers as they are the main source that contributes to their revenues. The bargaining power of the customers is extremely high as the customers are available with a number of options for viewing their desired movies. The customers do not depend much on the distributors as there are a number of providers in the entertainment industry. The decreased level of dependency on a single provider empowers the customers for demanding a higher level of value against their bought tickets

. The buyers require a special amount of attention which they expect the organization to meet. These expectations of the customers are of importance to Cineplex. Cineplex cannot ignore these needs of the customers; Cineplex is not operating in a monopoly. A number of competitors exist in the market. If Cineplex fails to satisfy the customers’ needs,then they might back up and select other option available to them.

LARGE NUMBER OF CUSTOMERS:

The entertainment industry has the potential to target large audiences and it has a large number of customer bases which it can target to increase its investment returns. The huge numbers, in which the customers of the entertainment industry exist, cause an increase in the level of variation required by the customers. These variations are to be met by Cineplex efficiently otherwise the customers mightopt for another offering available in the entertainments industry.

The products being offered by Cineplex are not their own. The customers are highly attached to the products being offered, and these are of importance to the customers. The customers require efficient experience when they enter Cineplex. Any lacking in the experience of the customers might result in loss of their strong customers’ base..................

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