2-19 External Components That Might Be Most Important To Managers in Movie Theater Chains and Why
The External components that might be most important for managers to know about are the economic, the socio-cultural, technological and demographic components. The economic component dictates the population's ability to have spare money for the movies. It is crucial for managers to consider the economic situation in making decisions on matters such as pricing of tickets. On the other hand, socio-cultural component enables the managers to understand the changes in lifestyle and behavior patterns in a population and their impact on the business. As such, they can make changes that facilitate continuity of the industry such as reduction in the volume of advertisement aired before a movie is screened and making separate movie halls that are less crowded and more convenient. Technology is another essential component to be considered by the managers. The changes in technology force the population to have different preferences. Therefore, movie theater managers need to embrace technology in a bid to retain the moviegoers’ interest. Lastly, a consideration of the demographics component enables the managers to know the gender and age group of the movie goes. As a result, it is easy to screen a film that best suits the attendants since different age groups and age have different preferences.
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2-20 External factors that managers at the movie theater chains have to deal with
Managers at the movie theater chains have to deal with three main external factors. They are socio-cultural, economic and the technological factors. The socio-cultural factors in question are the change in preference and behavior patterns. The managers of movie theater chains are grappling with establishing how people need their movies delivered. Therefore, they need to analyze the current behavioral pattern and change in preference and resolve the dilemma. On the other hand, the cost of theater tickets and people's perception of the pricing is a pointer of a need to deal with the economic factors. Managers need to ensure that the prices conform to the quality of the service they offer and attract the expected number of moviegoers irrespective of the prevailing economic situation. Finally, managers have to deal with technological factors. The technological factors include the ever-increasing access to media content through, direct streaming from the internet, watching on small devices such as I phones and watching on affordable home theaters. Such access to material that would have otherwise been accessed in the theater is a competitor that threatens the future of the theater business making it essential for managers to deal with it.
2-21 How the current trends might constrain the decisions made by managers at the movie theater chains
The current trends might constrain the decision made by managers of movie theater chains in three ways. They include setting ticket prices, determining the number of advertisements to be aired before a movie, how to manage the large crowd and dealing with competitors. Current trends have proved that many people are finding movie theater tickets to be expensive. Therefore, managers are constrained in setting ticket prices. The setting of high ticket prices offers a good return on their expensive investment in offering superior quality movie experience. Nevertheless, the high prices are likely to be unaffordable by a majority of the population. Similarly, low ticket prices result in low returns but affordable to many moviegoers. Secondly, managers are constrained in determining the volume of advertisement to be aired before a movie. Whereas advertisements are income generating, airing of a large volume of advertisements makes the movie experience boring to a majority of the viewers. Third, managers' are constrained in making decisions on the appropriate size of the crowd to occupy one movie theater hall. Even though some people find a large crowd in the movie theater a memorable social experience, current trends indicate that majority of the population is finding it an inconvenience. Lastly, movie theaters face competition from different perspectives such as affordability of home theater systems and have other players such as IMAX. Managers are constrained on deciding on how to deal with these competitors. For instance, improving the movie fidelity and customers comfort means high expenses that are likely to increase ticket prices. On the other hand, retaining the current quality means giving the competitors a leading edge.
2-22 Most important stakeholders to movie theater chain and their probable interests
The most important stakeholders in movie theaters include the moviegoers, companies with advertisements, suppliers of movie screens and sound system and film production companies. Moviegoers are interested in getting the movie theater experience such as being in a social gathering and enjoying the movie. The companies with advertisements are interested in having their advertisement watches by the movie theater goers. Consequently, they complement the earning obtained by movie theater chains from the theatergoers. The suppliers of movie screens and sound system are interested in making more sales as the movie theater seek to improve on their theater quality to meet the theatergoers’ expectation. Finally, the film production companies are interested in having their film screened and also gain popularity among the viewers. As a result, it increases demand and generates more revenue.
