1. IntroductionIn suburb Hawthorn Melbourne, there is a large, abandoned warehouse bought by Brain and Jennifer MacIntosh. They are planning to convert this warehouse to some kind of movie cinema which to show recently launched movies, or perhaps "unusual" movies that people cannot usually see in the regular cinemas. Base on that, this report is heading to analyses the current market situation under 3 sections:1) Target market opportunities analysis;2) Target market evaluation;3) Target market selection.And provide a preliminary plan to suggest either they should process their ideas or not.2.
Industry definitionExhibition is the retail branch of the film industry. It involves not the production or the distribution of motion pictures, but their public screening, usually for paying customers in a site devoted to such screenings, the movie theater. What the exhibitor sells is the experience of a film (and, frequently, concessions like soft drinks and popcorn). Because exhibitors to some extent control how films are programmed, promoted, and presented to the public, they have considerable influence over the box-office success and, more importantly, the reception of films. In this case, the scope of industry could be shown on the diagram below:We can clearly see that, under the audiovisual industry, movies simply separate into three main Medias. Even there are plenty opportunities in DVD and online video market, believe or not, Cinema is still place, that people in holidays would like to go with their best friend.
For entertainment, build relationships, social activities, boredom...etc. That is the value that "watch a movie" can deliver to the consumer.
Matter of fact, running a cinema in a abandoned warehouse with 3D or IMAX will cost significant investment, that will against our Mac-environment (will discuss later). Therefore, I will reside the cinema into normal cinema industry, and we will discuss through it.3. Competitor OverviewDistribution of films for cinema exhibition in Australia is dominated by four large firms. These are Roadshow Distributors (Roadshow), United International Pictures (UIP), Columbia Tristar Film Distributors (Columbia) and Twentieth Century Fox Film Distributors (Fox).
Roadshow is 50% owned by the Village cinema group and 50% by Greater Union and has agreements with two of the major US studios, Warner Bros and Disney to distribute their films theatrically in Australia. Under these arrangements all Warner Bros and Disney titles to be distributed in Australia will be handled by Roadshow.Film distribution is highly concentrated. The four largest distributors, UIP, Roadshow, Columbia, Tristar and Twentieth Century Fox, generally hold in excess of 90% of the Australian market. Enquiries have also revealed that there are several potential barriers to the entry of new film distributors.
The most important are access to product and access to finance.According to Squire J(2004) pointed out, the owner has specific exhibition vision for a cinema, they renting or buying property for building a movie cinema which could be regarded as one kind of independent cinema(Squire J, 2004, p.165). Being an independent starting film exhibitor, the potential risks of running the Specialty Movie Cinema may be faced with challenges in the following areas:* Their inability to negotiate film hire terms;* The terms for second run films, in particular the fact that they are obliged to pay a higher percentage than first release cinemas at that stage while the earning capacity of the film has been severely reduced;Also they have known as local brand: Village cinema, Hoyts, and Greater Union.4.
Macro Environmental Analysis4.1 Why it is importantThe macro environmental analysis basically includes analyzing all factors that may influence the decision making by a company. (Pride et al. 2007).
An accurate analysis outcome may decrease risk and avoid threats. Both market micro and macro environment is continuously changing, and the company must be able to adapt, there may be aggressive competition or rivalries in a market (Grafton Milne, 2008). There are totally 6 macro environment factors which are demographic, economic, natural, new technology, political and cultural. However, some of them are not suitable for this particular case, so I will analysis the factor with matters.
