CinéEspace Personal Analysis

AD228 – Business strategy

Teacher: Stevens Thibaud (Boussard Muriel)
Academic Year: 2022-2023

Management Assistant – Goylukhanova Milana

Table of contents
Introduction.................................................................................................................. 3
PESTEL analysis......................................................................................................... 4
Industry type................................................................................................................ 4
Porter’s forces.............................................................................................................4
Resources and capabilities..........................................................................................7
VRIO............................................................................................................................ 8
SWOT.......................................................................................................................... 9
Strategic Business Units (SBU).................................................................................10
Game Theory.............................................................................................................10
The BCG matrix......................................................................................................... 11
The SAF criteria and techniques of evaluation..........................................................12
Sources......................................................................................................................13

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Management Assistant – Goylukhanova Milana

Introduction

Located in the center of Arlon and benefiting from the

latest infrastructure in terms of cinema as well as an easy
access underground parking, the CinéEspace has 5 air-
conditioned projection rooms. With a capacity of 800
seats, the cinema welcomes on average 2200 spectators
per week.

The cinema of Arlon has a website that contains not much information but it offers
you several movies.  [Link]
CinéEspace is a micro-company that does not have a large workforce and does not
exceed a total annual turnover of more than 2 million euros. The cinema of Arlon is in
the tertiary sector, it offers cultural services.
I chose to analyse the cinema of Arlon because I find that we don't have a lot of
information about this small cinema, so I was really interested to look for information
about the company and to be able to think about strategies that the cinema could
adopt, to also question myself does the cinema have competitors, what can it do to
attract more customers, what are the threats to the cinema, what are the
opportunities?
To answer these questions I will analyse the company through a Pestel analysis,
highlight its industry type, find its strengths through Porter's five forces, analyse its
resources and capabilities, make the VRIN model and the SWOT model.
After that I will think of SBU’s that the cinema could adopt to be different from the
others. Take an interest in game theory in a few sentences, analyse the company's
BCG matrix and finish with a strategic evaluation of the company with a proper idea.

PESTEL analysis

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 Political:
Administrative closures due to Covid-19 (Threat)
The curfews that the government put in place during the crisis (Threat)

Economic:
Since the health crisis, the company's capital has probably decreased, so
the cinemas have increased their prices, which means that people don't
go to the cinema as often (increase in the price of tickets, popcorn, juice, etc.)
(Threat)

Social:
We often go to the movies as a group. (Opportunity)
Because of Covid some people don't get together to go out anymore
(Threat)

Technological:
Equipment of new technologies for the cinema screens (Opportunity)

Environmental:
Going to the cinema with your car, it pollutes. You can watch movies at
home. (Threat)

Legal:
Competition with platforms like Netflix, Disney+, PrimeVideo (Threat)
Film broadcasting and distribution rights.

Industry type
The company is in perfect competition because there are several cinemas in Belgium
that offer all the same films as soon as they are released, such as Avatar 2, which
has just been released and is in almost all cinemas in Belgium, their products are
almost identical and so are the ticket prices. But the cinema of Arlon does not have to
worry because the population in Arlon will not go to Brussels or Liege to see the
same movie except if it is proposed for a preview or for a special event.

Porter’s forces
I. Competitive rivalry

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 I would not say that the cinema of Arlon has "physical" competitors, because
there are several cinemas in Belgium but most people go to the cinema
closest to their home, so the inhabitants of Arlon come to Arlon, those of
Habay go to Habay etc. On the other hand we could say that platforms like
Netflix, Disney+, Prime video etc. are causes that make people do not go to
the cinema anymore, so they are competitors but they are not physically there.
Also they are not allowed to diffuse the movies that are in cinemas, they have
to wait a few months before proposing them on their platforms, so I would say
that the competitive intensity is low. LOW THREAT

II. Threat of new entrants

The risk of new entrants is not important, new cinemas can open but I have
the advantage of being here for a long time and opening another cinema in
Arlon is not very interesting. Also, to open a cinema you need the same
requirements as to open a business and make a study. The costs of opening a
cinema are high. LOW THREAT

III. Threat of substitutes

There are not many because there is only one cinema in Arlon and opening a
new one in Arlon is not interesting. But as I mentioned above, there are
alternatives that offer a lot of movies and series so that the customer can
make choices between thousands of movies, which he can't do in the cinema
because his choices are limited. Then, some people prefer to watch movies
from their sofa. But some people still prefer to go to the movies so I will still
have some customers. Also legislation prohibits the streaming of released
movies on services like Disney Plus or Netflix within 15 or 17 months of their
initial cinema release. For example, if I want to watch Avatar 2 I would have no
choice but to go to the cinema to see it, because otherwise I have to wait more
than a year to see it on the platforms. If I want to see old movies, I have
alternatives like those platforms or DVD because theatres do not often offer
the old ones, but if I want to watch the new ones I have no choice than going
to the cinema. So the power of substitute is medium. MEDIUM THREAT

IV. The power of buyers

I have the population that lives in Arlon, they are numerous, as I said in the
introduction there are more or less than 2200 people that go to the cinema per
week in Arlon. They have a power to watch movies on new platforms like
Netflix, but they won’t have the new blockbusters that we can see at cinemas.
However, if from one day to the next I don't have anything to snack on during
the movies or broken screens that make me have less rooms, I will lose those
customers, who will prefer to watch their new movies in good conditions. I

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Management Assistant – Goylukhanova Milana

 would say that their power is low because the probability that I have technical
problems is also lower. LOW THREAT

V. The power of suppliers

I have several suppliers, first of all those who send me the movies, they are
numerous like 20th century fox films, Belga Films, Warner Bros, Walt Disney
and they have a very high power because they give access to almost all the
movies that we see on our screens in Belgium. They can choose not to send
me any more films if I don't respect their conditions, their power is high. Then,
there are those who provide me with the technological equipment without
which I have no way to show films, their power is also high. Finally, what I
need in my restaurant (popcorn, juice, chips, drink,...), the power is medium, I
can do without it but if I don't find new suppliers quickly I can lose customers,
because it is always better to watch a movie with popcorn. HIGH THREAT

Radar graph of Porter’s five forces for the CinéEspace:

Porter's Five Forces

CinéEspace
Rivalry
25

Supplier Power 5 Entry Threat

-15

Buyer Power Substitute Threat

After having done the Porter's five forces radar graph for the cinema of Arlon, I would
say that the cinema has to get used to it because, indeed, there are platforms,
alternatives, but they don't have the possibility to offer what the cinema offers
directly, of course some people have patience and can wait for the films to be
released on the platforms. But there will always be customers who will go to the
cinema. The cinema may have technical problems but it has been around for a long
time and knows how to deal with them and fix them as soon as possible. In the end,
the cinema will not remain without customers and will probably not have big
competitors who want to take its place.

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Resources and capabilities

Resources Capabilities
.
(What we have) (What we do well)

buildings, equipment, design of movie

mini-market1, vending theaters (for example
machines, parking Physical renovations made in
(4hours = 1€), Dolby room 4 in the
Atmos 3D sound2 cinema)3

a capital, films ability to manage

considered as Financial admissions, ticket
intangible assets prices4

employees, partners entertainment,

(radio metropole, info increase general
lux, 2b view), clients Human knowledge,
(the population of documentaries,
Arlon) inspiration, creativity

1
2
Dolby Atmos allows creators
around the world to place every
sound exactly where they want it,
for a more realistic and immersive
audio experience.
3 Dolby Atmos - Official Site - Dolby
4
Every Monday they have reduced prices
session at 5:30 pm and if you watch a 3D
session a deposit of 5,00€ per pair of
glasses will be asked but it is recoverable
after the session so it is beneficial for you
if you use your glasses correctly.
VRIO

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 There are resources and capabilities that are valuable within the
V Value cinema.

The Arlon cinema does not have resources or skills that other
R Rareness cinemas do not have. With my research I did not find anything
special.

It's hard for a theater not to be imitated because the theaters offer
more about the same movies. A movie that is released and that
everyone has been waiting for a long time is in almost all the
theaters. Like for example Avatar 2, whether in France, Belgium,
Luxembourg, all the theaters offer this new movie.
I Imitability
However, to be inimitable, the cinema could organize events, or do
something special. For example, the cinema of Arlon for its 15th
anniversary organized a Halloween evening, they also proposed "an
evening between girls" reserved only for women. And finally a Star
Wars day to conclude the last movie of the trilogy. With events like
this, the Arlon cinema can be inimitable.

The cinema of Arlon must be organized, for that it needs a building

with good suppliers who offer him good films, to have rooms which
O Organization are clean to welcome the customers, to have a little visibility.
And it is the case the cinema exploits correctly its resources and
competences.

SWOT

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 SWOT analysis on the strengths, weaknesses, opportunities and threats for the
cinema based on my Pestel analysis, my Porter's five forces analyse and my VRIO.

 Partnerships
 Equipment of new technologies
 I have choices in my mini market:

OPPORTUNITIES
for the cinema screens.
popcorn, chips, drinks, candies.
 Improvement of existing rooms.
STRENGHTS

 Parking places for 1€ 4 hours.

 We often go to the movies as a
 I am the only cinema in Arlon so
group so it makes more clients.
the inhabitants don't have much
 Legislation prohibits the
choice if they want to see a new
streaming of released movies
movie.
on services like Disney Plus or
 In the center of Arlon and easy to
Netflix within 15 or 17 months of
access.
their initial cinema release.
 Well-maintained movie theaters

o Administrative closures due to

Covid-19.
o The curfews that the
o Building too small to open a government put in place during
restaurant or open more rooms. the crisis.
o Since the health crisis, the
o No places to sit before or after a
company's capital has probably
movie. decreased, so the cinemas
o My suppliers have power over have increased their prices,
WEAKNESSES

me because they give me the which means that people don't

THREATS

services I offer (movies) go to the cinema as often (it’s

o A lack of diversity in the films too expensive)
o Going to the cinema with your
offered.
car, it pollutes. You can watch
o Limited hours for some of the movies at home.
cinema’s rooms. o Because of Covid some people
don't get together to go out
anymore.
o Competition with platforms like
Netflix, Disney+, PrimeVideo
o Security or public safety issues
that may affect night-time movie
attendance

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Strategic Business Units (SBU)
Personally, I think that CinéEspace does not distinguish itself from its competitors,
neither by differentiation, nor by cost domination. For example, CinéEspace does not
offer its tickets at 3€ and other theaters at 7€. Or it cannot afford to offer its services
at high prices when it does not offer anything different from other cinemas.
I thought about strategies that CinéEspace could use to distinguish itself from its
competitors:
Differentiation strategy: Cinespace could focus on providing additional
entertainment programs (such as live concerts or special events)
They could offer sessions where they show channels that show interactive cartoons
for children that would push them to come and learn because children often like to
come to the movies.
Or during the world cup they could have found an agreement with the channels that
broadcast the matches and diffuse them in the cinemas at low prices. Normally in
Arlon the world cup matches of Belgium were diffused in the center of Arlon but
because of the construction works of the Léopold square they didn't have the
opportunity to do it.
Horizontal integration: I offer a new product (soccer games), in the same market
( cinema). It’s a new idea, that others might not have. With these two ideas I affect
several audiences, children, adults, seniors. Football fans can come and watch their
game quietly in a big screen with colleagues and popcorn, have a good time. Little
plus: it's not outside, so the weather doesn't matter.

Game Theory
The game theory in the case of the CinéEspace of Arlon, I think that it is in
agreement with the other companies of its sector.
The cinema of Arlon and the cinema of Virton for example, do not need to have
competition. In my opinion, in normal times the inhabitants of Arlon go to the cinema
in Arlon, the inhabitants of Virton go to the cinema in Virton. They both offer the same
movies (new releases). Of course, if the Arlon cinema organizes events, as I
mentioned above, if the Arlon cinema had shown the world cup games in their rooms,
there would have been competition because the Arlon cinema "steals" the customers
of the Virton cinema.
Maybe there is competition between the cinemas in Belgium but to see a movie we
usually go to the nearest cinema except for a premiere or other important events.

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In the case of cinemas the competition is weak, the cinemas can of course find
alternatives to differentiate themselves like investing in advertisements for example.
They can be in competition if they try to release the best movies possible by using
marketing strategies or negotiating with distributors but with my research I didn't see
any difference in what the different cinemas around Arlon were offering.

The BCG matrix

To realize my BCG matrix, I will give examples that could fit in a BCG matrix of the
cinema of Arlon.
Stars: launch of films that we are sure will be profitable. Like blockbusters (MARVEL)
we know that MARVEL movies will bring in money.
Cash cows: Prestige room, with 3D Dolby Atmos sound, makes you feel the low
voices and vibrations, room equipped with inclination seats. Everyone prefers to
watch a movie in comfortable conditions.
Dilemmas: 3D projection rooms, do I still reach many audiences? Or just kids?
Dogs: Films that do not interest a large audience. Or films that are released at the
same time as blockbusters and therefore no longer have much visibility. (For
example, Brad Pitt's film Babylon was released at the same time as Avatar 2, the
most awaited movie, so it lost its visibility in theaters.)

HIGH

Stars Question
Marks

HIGH LOW

Cash cows Dogs

LOW

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The SAF criteria and techniques of evaluation
Objective: The cinema of Arlon will increase the number of customers by organizing
thematic evenings every Thursday evening.

Suitability

Having a strategy of organizing thematic evenings every night is relevant,

because it aims to increase the number of customers, which is an objective
of almost every cinema. On top of that, the cinema will surely attract different
customers than usual. (Seniors, teachers, students, etc.)

Acceptability

The strategy of thematic evenings is acceptable, because it will allow the

employees to organize events and to propose activities which will
differentiate the Arlon cinema from the others. On the other hand, the
customers will be interested in the idea of thematic evenings, because they
will appreciate the possibility of having an experience where they will see the
cinema differently and will be able to entertain themselves (which the cinema
seeks to do and which is part of its capabilities).

I think that the risk is small, because it will interest at least a small audience
and nothing is lost to try because to organize this thematic evening there is
no need for a lot of investment but of course before starting it is necessary to
be sure that these thematic evenings will cover the costs.

Feasibility

The theme night strategy is reliable, because if it is implemented correctly

and organized, the final result will be good and the Arlon cinema will be able
to do it again. For example, if the customers increase every Thursday night
since the beginning of this strategy, it means that the strategy is reliable and
that it can be used more frequently.

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Sources
 CinéEspace of Arlon, Cinéma espace d'Arlon, films à l'affiche, bandes-annonce,
programmes, concours, forums : Ciné Espace ([Link]).
 Cinema of Virton, Site officiel des cinés Patria et Nos Loisirs - LES FILMS
([Link]).
 Creatly, for my VRIO model, Untitled Workspace - Creately
 Dolby Atmos 3D sound, Dolby Atmos au cinéma : une expérience audio
immersive - Dolby.
 Ouest-France evening edition, Ces films qui ont fait un gros flop au cinéma en
2022 - Edition du soir Ouest-France - 30/12/2022.
 Powerpoint, Part 2, Chapter 2_The industry,
[Link]
 Powerpoint, Part 1, Chapter 3_Ressources / VRIO / SWOT,
[Link]
 Powerpoint, Strategic Choices,
[Link]
 Powerpoint, Part 3, evaluating a strategy,
[Link]
 [Link], Le Ciné-Espace d'Arlon a 15 ans !!! - [Link].

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Management Assistant – Goylukhanova Milana