Adapting Movie Theatres: Strategic Decisions Amid Changing Trends

1. Using Exhibit 2-9 what external components might be most important for managers in movie theatre chains to know about? Why?

External components refer to factors outside the organization that may affect the performance of the organization or revenue of movie theatre chains. As shown in exhibit 2-9 from the case study: NOT SOLD OUT, I believe the Age of the consumer or viewers play a great role, as we can see in the graph provided in the case study 21% of the viewers(the highest percentage of consumers) are between ages 15-17(Telefilm Canada,2017), they are high school teenagers with no stable income so with the increase in ticket prices and bringing in more high-profile movies with premium amenities does not help to hike the current percentage but reduces it.

2. According to the case, what external trends do managers at the movie theatre chains have to deal with?

One of the external trends that the managers at the movie theatre chains having to deal with is consumers choosing convenience over quality. Especially after the world pandemic, as a precaution, people have chosen to spend quality time indoors with their loved ones, as well, due to the sudden inflation in the economy people are choosing to look for more affordable and convenient options for entertainment and art. Also, the growing number of home theaters among viewers is also causing the reduction as they have become more affordable and common among working-class viewers. Easy access to the latest movies through various platforms is also causing consumers to choose comfort over inconvenience.

3. How do you think these trends might constrain decisions made by managers at the movie theatre chains?

Due to the trends, I mentioned in question#2, there are many decisions that may force managers at movie theatres to make such as remain competitive along with growing their revenue rate. A few of these decisions may be:

• With consumers opting for more affordable and convenient entertainment options managers are constrained to lower ticket prices in their competitive market with lowering revenue rates which could affect them in the long to run the organization smoothly.  
• To compete with the growing home theaters, they will need to be up to date with the best sound system, larger screens, and other industrial technologies and exceptional ambiance and services.
• Also, with the post-pandemic precautions they need to keep in mind to create a space to have a large or maximum audience in theaters with equal safety measures forcing them to create wider theaters to enhance their business growth according to their customer needs.

4. What stakeholders do you think might be most important to movie theatre chains?  What interests might stakeholders have?

Stakeholders are a set of people that affect the organization’s decision-making, they are affected by what the organization does as well as can influence them. A few of their important stakeholders are Customers, Employees, Movie distributors, etc.

• Without customers, they cannot continue or grow their business which makes them an important factor in decision-making. Their main interest is to have an exceptional movie-watching experience.
• Employees also play a role in running the theaters smoothly and according to their customer’s needs and preferences.
• Movie distributors are key to this business as they provide great exceptional movies to run successful shows with large audiences and to keep this business running.

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