Cineplex is one of Canadaâs leading companies in the entertainment industry and operates a fully modernized and digitized motion picture in the theatre circuits. The company runs several businesses such as theatrical exhibition, gaming, food services, Cineplex media, alternative programming, Cineplex Digital Networks, Cineplex Digital solutions, and online sale services of home entertainment content via Cineplex.com platform and also applications embedded in electronic devices. In addition, Cineplex is a joint venture cohort in SCENE that is the greatest entertainment loyalty program in Canada. Cineplex is strategically located in Toronto and operates more than 160 theatres consisting of 1,600 screens, serving around 77 million customers per year through Cineplex theatre brands such as Cineplex Odeon, Galaxy Cinemas, Cineplex Cinemas, Scotiabank Theatres, and Cineplex VIP Cinemas, as well as SilverCity. Furthermore, Cineplex owns and operates Poptopia, Outtakes brands, and UltraAVX. The Cineplexâs corporate strategy involves capitalization of core media infrastructure and strengths to provide consistent growth of its media business, internally and externally.
Porterâs Five Forces Analysis
With respect to Porterâs five force analysis, strategy is viewed as a competition that is defined as strive for profits in relation to five distinct forces. Therefore, the five forces give the general view of the structure of the industry and shape the aspect of competitive interaction. Also, Cineplex Inc.âs competitive strategy can be analysed by Porterâs five forces.
The Threat of New Entrants
Cineplex Inc. experiences the threat of new entrants into entertainment industry. The effect of new entrants is enormous as they exert pressure of the existing companies in terms of prices, the rate of investment, and costs necessary to compete. Therefore, introduction of new entrants brings new capacity and an urge of gaining market share. However, Cineplex has able to remain relevant in the market for years due to the existence of huge barriers to new entrants. One of the barriers is the huge capital required in establishing Entertainment Company to could square compete with Cineplex Inc.
Since Cineplex deals with myriad of businesses, it depends on several suppliers such as Coca-Cola for soft drinks. Therefore, the company has several suppliers for each item it needs with varieties of substitutes. If there are an excessive number of suppliers with varieties of substitutes, suppliersâ bargaining power is reduced by a great margin and their value reduces and often reduces premium charges. This proposition is supported when Coca-Cola phases out Taco Bell as a soft drink supplier for Cineplex due to decreased its decreased bargaining power.
Since there are several large companies in the entertainment industry, customers (buyers) have increased bargaining power. The increased bargaining power of consumers demands more value and high quality of products and services for reduced prices since they have several options from which they can choose their preference. On the other hand, Cineplex is buyer to many suppliers the fact that makes these suppliers compete aggressively at the expense of profitability.
The Threat of Substitutes