SWOT Analysis Strengths * Number of branches Major Cineplex has highest number of branches among their competitors so they can reach more customers. There are up to 43branches for Major Cineplex, 6 for EGV, 3 for IMAX, 2 for Esplanade Cineplex, 1 for Paradise Cineplex, and 1 for Paragon Cineplex. The more number of branches, screens, and seats, the more they can provide service to customers. * Location Major Cineplex Group located its product and service in the most convenient area.
The location of each branch is reachable. It covers all regions, mainly in city and also other provinces.Therefore, it can attract a large number of customers throughout Thailand and gain a lot profit. * Oligopoly business Major Cineplex Group gain 80% of the market share.
Since they are in the Oligopoly, there are only few competitors in the market, they lead the market. Moreover, it is the leader of the market so they have high bargaining power over both supplies and buyers. For supplier, they have high bargaining power over domestic and international film producers and also sponsors. For buyer, they can bargain by increasing the ticket price. * Variety sources of revenueMajor Cineplex has many service and operation; they get revenue from many groups of customers.
Not only film distribution and admission fee, Major Cineplex gains a lot of profit from advertising, concession, bowling and karaoke, and rental income which also can increase value-added. * The Economy of Scale The Economy of Scale increase their competitive advantages by having lower cost of production compare to their competitors. They have large number of customer data from M-Gen card, the membership card. So they can analyze the customer behavior to create suitable promotion program to attract each customer group.This membership program generates more sales and increase customer loyalty. Weakness * Nature of business Major is a Stand Alone Complex that provides only movie services.
It will lose their competitive with the one stop entertainment. Moreover, Major Cineplex has to provide service in a specific of time or in schedule. Even though, they can sell a few tickets, they still have to provide the services. Besides, the sales of movie tickets depend highly on the attractiveness of the movies in those periods. If the movies are not popular or attractive, the revenue will reduce on that period.And in some areas, Major Cineplex doesn’t provide some movies for customers.
* Too high ticket price and long commercial First, Major has to face an increase in social resistance trend about taking advantage of customers. For example, some groups of customers feel dissatisfied about too long advertising before watching movies. Also, they cannot accept very high price of product offered in front of the theaters. These all make customers feel that Major never cares of them.
Finally, there is a resistance in facebook from some group of customers. High fixed cost Major has a lot of fixed cost due to the heavily invest in the movie theater. The heavy investment implies that Major Cineplex needs to try very hard to compete with other firms to gain the profitability. In order to have a movie theater, the fixed cost and capital requirement is very high for example, theater, seats and so on. * Licenses cost Major has to pay a lot of copyright cost in each year for movies. It will make Major has high operating cost which will result in lower profitability.
* Sharing information to publicMajor is a registered company at the stock exchange so they have to disclose the company information to the public. It will benefit to the competitors to use this information to adjust the suitable strategies. Opportunities Opportunities are presented by the environment within which our organization operates. These arise when an organization can take benefit of conditions in its environment to plan and execute strategies that enable it to become more profitable. Organizations can gain competitive advantage by making use of opportunities. Organization should be careful and recognize the opportunities and grasp them whenever they arise.
Opportunities may arise from market, competition, industry/government and technology. The followings are opportunities that may benefit MAJOR. * Changes in technology The advancement of technology benefits the company in term of adding value to its services for the reason that it leads to more variety of cinemas. In the past, we have only one type of cinema. But at the present time, we have many more types of cinemas such as 3D, 4D, digital cinema and so on. This will result in more profitability of the firm since these types of cinemas have higher ticket price than the regular one.
* Changes in lifestyleThe number of people who love to spend their free time at the department stores or shopping centers is increasing significantly. This may affect the number of people who go to the cinema to be increased as well since most of department stores have cinema inside. Furthermore, many cinema providers also offer other entertainment services such as karaoke and bowling so people have many activities for them to choose and enjoy during their time off. * Increasing in middle class population Nowadays, people have higher education than before so they can earn more money and be able to satisfy their unfilled needs further.This will result in higher consumption in luxury goods and services especially in those that help entertain themselves.
Cinema is one alternative that people prefer as they are located in most department stores and the price of tickets is affordable. * Changes in government policy Government policy that seems to benefit entertainment services provider a lot is increasing in minimum salaries and wages. Since it helps increase purchasing power of people, people tend to spend more. Threats In reality, the environment always changes.
Each business has to adapt with changes by different ways.In addition, changes are sometimes good news but are sometimes bad news. Especially for bad news, companies have to realize threats and find ways to prevent or try to reduce them as much as possible. As far you know, Major Cineplex is a leading movie theater company in Thailand. As the macroeconomic activities always change all the time, these are the threats this company has to face.
* Pirated DVD and substitutes Second, there is very high pressure from strong substitute product. Nowadays, people have more alternatives to see movies.They can buy DVD or CDs instead of going to the movie theater. Likewise, now there are many pirated DVD sold everywhere which offer very low price for customers.
Besides, people can download the movie from the internet for free such as bittorrent. This leads to another important problem that Major have to cope with. Also, customers have very low switching cost because they can easily turn to use service from competitors such as SF cinema if the price of the tickets increases. * Rating range Third, today there is rating range of movies for different ages of customers.This can limit number of customers.
For example, they limit the age of people who can watch movies so it reduce the number of customers who can watch the movie at the theater. * Government policy Another important factor is that Cultural Ministry has right to ban the movie that they consider as unsuitable movie which affect Thai social in term of morale and ethics. This make major has to be careful in choosing movies to show. * Flooding situation and economic factors Finally, there are floods in Thailand which force Major to temporarily close some branches during October to December in 2011.This leads to decreasing in sales and profitability of Major Cineplex.
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