STRATEGIC MNGT - REG

STRATEGIC MNGT - REG - Justin Gardiner Dr. Ward BUSI 4349 8...

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Justin Gardiner Dr. Ward BUSI 4349 8 March 2009 Regal Entertainment Group: The Movie Theater Segment of the Entertainment Industry Current Strategy: REG currently attributes 67 percent of revenue from ticket sales, 26 percent from concessions, and the rest made up from advertising and other generated sources. The current products REG offers are “critically-acclaimed films, alternative productions, restored classics, and first-run foreign movies” (Lee). The company utilizes its assets very well during peak and non-peak seasons. During the time in which movie sales usually slump, REG rents out its facilities to different organizations to use for business forums, presentations, etc., as well as offer big screen concerts on a monthly basis. Their website, along with websites that REG is strategically partnered with, was the main communication by the company to the consumer. Here customers could see which bands were playing, how to get tickets, movie times, ticket prices, theater locations, movie trailers, and more. REG also uses a phone service for some of this info as well. Advertising and marketing consisted mostly of the website, and phone service, in addition to employing various newspaper listings for ads, movie times, and theater locations. Objectives, in congruence to industry norm for most business organizations, included the desire to increase revenues as well as Net Income, and in REG’s case, remain the leader throughout the industry.
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At both the corporate and theater levels, REG “focused on efficient operations and strict cost controls,” (Lee) that proved to be beneficial. Since 1997, REG invested $2.7 billion in capital expenditures to upgrade and expand its theater circuit. Boasting such size and quality, the company has a great competitive advantage in “negotiating attractive national contracts and generating economies of scale” (Lee). They have “significant experience indentifying, completing, and integrating acquisitions of theater circuits” (Lee), enabling them to successfully do so of 15 theater circuits in the last 15 years. By using its size, reach ability, and capitalizing on economies of scale, securing food orders, and other products/services were made proficient. Through the company’s efficient purchasing and distribution supply chain, REG generated favorable concession margins, which, as aforementioned, make up ¼ of the company’s revenue. Internal Analysis: Regal Entertainment Group (REG) is the leader of the movie theater segment of the entertainment industry. The company consisted of 18 percent of all indoor screens in the United States. The main competitors to REG are AMC, and Cinemark. REG, accruing the most annual sales around $2.661 billion in the fiscal year of 2007, was trailed closely by AMC with annual sales of $2.461 billion. Cinemark, selling $1.682 billion in the same year, is another intense competition, but not close in comparison to AMC. Cinemark had international presence in South America, and AMC had an international presence in Europe and Asia. The impact of this specific
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STRATEGIC MNGT - REG - Justin Gardiner Dr. Ward BUSI 4349 8...

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