Denise Plonis

MGT 4170 – Policies and Strategies

Gerard Myers
Chapter 3 Case Study

Case #1 – Not Sold Out

1. What external trends do the strategic managers at the movie theater chains have to evaluate?
What external sectors are these trends part of? Are these external trends of equal importance to the
movie theater chains? Explain why or why not.

Part of the general environment sector, there are three external trends that movie theater managers
have to analyze: (1) how people what their movies delivered, (2) the type of movie-going experience
they want and (3) the competition from other sources.

2. What opportunities and threats do you see in this situation? Describe

Opportunities would be ways to make going to a movie theater better by using strategies such as
offering variable pricing (matinees, specials, etc.), and better amenities such as babysitting, valet parking
food, alcoholic beverages and online ticket sales.

Threats would consist of YouTube video website and consumers’ dislike of the price of tickets,
uncomfortable seating, large crowds, excessive ads and previews before the movie and the general
inconvenience.

3. How do you think these external trends might affect the strategies used by the movie theater
chains? Be specific.

The movie theater chains could develop strategies depending on which areas they want to focus on. For
example, two of the trends cited were cost and uncomfortable seating. A movie theater chain could
develop a strategy that includes replacing the current seating with better seating as well as offer price
discounts for non-peak movie times or days or possibly finding a way to lower overall prices. The cost
factor could include the pricing related to popcorn, drinks, candy, etc. The chain could consider lower
these costs as well.

4. If you were a strategic decision maker at the corporate headquarters of one of these movie theater
chains, what types of external information would you want? What if you were a manager at a local
movie theater: what types of external information would you want?

A decision maker at the corporate headquarters would want to see information concerning real estate
costs, local wages, general income level of the area and entertainment costs. Also, knowing the plans of
the local competitors would be useful information for developing strategies to respond to potential
price reductions, discounts and/or new theaters.

A local theater manager would want to see information concerning unemployment and wage rates.
Competitor discounts and specials would also be of interest. The local manager would also want to
know the types of movies the local population like in order to request the most popular genre of movie
to show.