Strategic Management: Analysis of Cineworld Company

This report provides an analysis of Cineworld Company's internal resources and strategic capabilities. It includes a SWOT analysis, core competencies, and VRIO analysis. The report concludes with recommendations for maintaining competitiveness in the industry.

STRATEGIC
MANAGEMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
SWOT Analysis...........................................................................................................................3
Core Competencies......................................................................................................................4
VRIO Analysis.............................................................................................................................4
Theoretical tools that defines resources that company uses to compete.....................................5
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Strategic management is the analysis of internal and external environment in which the
company operates and then consequently developing appropriate strategies based on conclusions
drawn from such analysis (Antikainen and Valkokari, 2016). In this report, internal analysis on
Cineworld company will be presented.
MAIN BODY
Strategic capabilities can be mainly defined as the ability of the business to utilise and
exploit the skills and resources that are available to them (Rothaermel, 2016). The internal
analysis of the company includes the analysis and identification of different aspects of the
business such as resources available, core competencies of the business, its strengths and
weaknesses etc. and develops the strategic capabilities that exist in an organisation (Lopes and
et.al., 2018). There are different tools that can be used for the Cineworld Company.
SWOT Analysis
The SWOT analysis tool helps in ascertaining the strengths, weaknesses, opportunities and
threats that lies within a company (Antikainen and Valkokari, 2016). For Cineworld this can be
done in following manner:
Strengths
 The major strengths of the company
include the successful series of
integrations that it has entered into with
different partners over the series of
times (Rothaermel, 2016).
 The brand portfolio of the company is
also very strong where the track records
of all such products are extremely
strong and successful.
 The customer satisfaction with the
company is also very high.
Weaknesses
 The company has been loosing its
market share due to the lack of better
techniques to handle the changing
environment.
 The success of the company outside of
its core activities is very limited and the
challenges faced are also high.
 There exists a gap in the range of
products that are being sold by the
company thus giving an option to the
competitor’s entry.
Opportunities
 The consumer is willing to spend extra
and this has increased the overall
Threats
 The international sales of the company
can decline with the increased
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entertainment industry revenue thus
providing a great deal of opportunity to
the company.
 The taxation policies have also
improved the chances of new venture of
the companies in entertainment
industry.
 Technology has also advanced in this
industry giving increased avenues.
movement towards recession and
isolation amongst the customers (Lopes
and et.al., 2018).
 The skilled workforce has become
disperse in the industry and this is also
posing as a threat to the company.
 There is an increased threats of lawsuits
being filed on the company in different
markets thus presenting a significant
risk.
The SWOT analysis helps in developing an insight into what factors have an impact on the
overall decision making of the company. this helps in improving overall strategy formulation but
it also lacks external insight and hence cannot be solely used to take decisions.
Core Competencies
The core competencies can be defined as those key strategies or values that the company has and
the resources that are required to increase the competitive power that the company holds
(Hernández and Garcia, 2018). The core competencies of Cineworld can be identified as:
 Customer Satisfaction: The major resource is the huge customer base that has been
extremely satisfied with the products that the company purports and this has increased
their loyalty as well.
 Innovation: the company has always been extremely innovative towards the products and
its range which has helped in creating a unique selling point for the company.
 PR management: The manner in which the company has maintained its public
relationships by using correct PR strategies and correct marketing schemes as well is
commendable. This has contributed heavily in the success of the company.
 Result Driven: The Company had always focused on delivering world class cinematic
experience to its viewers and this had contributed immensely in the building of the
unique image of Cineworld (David and David, 2016).
The overall analysis of the core competencies helps in ascertaining that what are the key
attributes that affect the Cineworld Company positively and help them in gaining competitive
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advantages but this analysis is not comprehensive as it does not takes into account the key
competitive strengths and unique selling point of the company.
VRIO Analysis
The VRIO analysis framework helps in designating the different resources and the
strengths that company has in their internal environment:
Valuable: This signifies those resources that contribute in the value generation for the company.
For Cineworld, the extremely skilled workforce that they employ and the latest technology used
by them is a major value creating resource for the company.
Rare: The rareness of a resource signifies that how difficult it is for other competing companies
to acquire the resources that the main company possess. The human resource of the company is
very rare and additionally, the patents and trademarks that the company ha possessed with time
are extremely rare.
Imitable: This shows the ease with which the methods or techniques used by the company can be
copied by the competing company (Antikainen and Valkokari, 2016). For Cineworld, the
technology and highly developed effects that they use can be easily copied by other competing
companies.
Organised: This signifies how systematic the entire process of the organisation is and for
Cineworld, it can be said that the manner in which services are delivered to the viewers and their
research and development activities are extremely organised and systematic.
Resources Valuable Rare Imitable Organised
Human Resources ✔ ✔ ✔
Technology ✔ ✔
Patents and
Trademarks
✔
Research and
Development
✔ ✔
The overall VRIO analysis indicates that what are the different aspects of the assets that are
available with the company but it does not takes into account the fact that all the assets cannot be
comprehensive categorised into these four categories only and hence it is not a conclusive tool.
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Theoretical tools that defines resources that company uses to compete
Business Canvas Model: It is a strategic management technique which is used to define and
communicate a business concept (Joyceand Paquin, 2016). Business canvas model is important
for organization it supports to identify resources, capabilities, revenue stream, channel, customer
segments, cost structure etc. It helps business to communicate with different clients effectively.
Business canvas model is applied for Cineworld to understand capabilities, resources etc.
Key Partners
 Cineworld has key
partners Corporate
Social
Responsibility
(CSR), IMAX and
CJ 4DPlex.
 IMAX supports
company to
expands it’s
business in global
countries by
opening 15 new
IMZX with laser
system in regal
theatre. It is quite
new approach for
the Cineworld.
Currently
Cineworld and
IMAX Corporate
Plc announces that
they extend their
partnership more
than 20 years which
is based on the
agreement for 55
new IMAX along
with Laser system
that is signed by
IMAX. So,
currently Cineworld
has 170 IMAX
theatre which are
operated currently
Key Activities
 There are several
key activities i.e.
high level of
customer
satisfaction,
strong
distribution
channel, new
environmental
policies and
successful track
record of
development are
the major
activities which
need to improve
because it helps
company to
expand it’s
business
globally and
improve
buyingbehaviour
of customers.
 Customer
satisfaction and
sustainable
practices are
required to
complete on
time so that can
meet objectives.
 To attract
customers
Value
Proposition
 Most of the
customer
doesn’t able to
buy premium
products or
premium
movie due to
high cost. so
organization
keeps different
prices of
product so that
can meet
customer
objectives.
Investment in
research and
development is
very slow that
causes
customer
doesn’t get
new innovative
products that
automatically
reduces
demand of
products. To
resolve the
problem
company
collaborates
Customer
Relationships
 Customer wants to
give values of their
money. So, they
expect they get
good facility in
cinema met their
objectives.
 Organization offers
them good
experience by
offering different
products so that
they can afford as
per their situation.
To improve their
cinema experience
involves artificial
intelligence so that
they get movie in
great quality.
CSR supports
Cineworld to establish
good relationship
between customers
and company
(Magalhães and et.al.,
2020).
Customer Segments
 Rightsholders are
own filmed media
content which often
faces difficulties to
find right audience
who work and helps
to generate money.
They have direct
access to a content
delivery system
which is affordable,
generates net
income and capable
to direct
communicate with
consumers.
 Rightsholders are
most important
customers. It
includes reach
audience, make
money by reducing
operational costs,
crease sell
opportunities.
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across US and
Europe. While 4DX
is the fast-growing
premium cinema
company which
keeps partnership
with Cineworld to
expand its business
in 145 4DX
location which is
across US and
Cinema. Corporate
Social
responsibility
supports company
to uses sustainable
practices in their
business operation.
 While 4DX
improves brand
image in cinema
industry after
partnership with
Cineworld. While
IMAX is an
innovator
entertainment
company which
offer innovative
technology. It gets
advantage of
partnership that
they distribute
IMAZ network
among different
cinema platform.
 IMAX is the most
important for the
Cineworld.
Cineworld
requires to
strong brand
portfolio and
keep continuous
these are main
activities which
is required to
complete.
innovation on
products.
with 4DX
which gives
new
technology.
Decrease cost of
transportation
reduces
operational cost
that directly
reduces cost of
products.
Collaboration of
4DX company
leads innovation
in products and
improves brand
image in business
market (Toro-
Jarrín, Ponce-
Jaramillo and
Güemes-
Castorena, 2016).
Key Resources
 There are several
resources which
are needed to
keep for
business such as
human resources
and it’s
intellectual.
There are
number of
partners
provides
programmer,
developer ad
designers.
 HR department
is important in
the Cineworld
because they
recruit potential
employee for
specific job so
that they can
help company to
run long by
giving high
efforts.
Channels
 There are number
of channels i.e.
digital media,
internet etc. helps
company to reach
new and existing
customer in
minimum time.
 Strong distribution
channel also adapts
by organization to
understand each
customer needs and
preferences for the
product and
services.
Cost Structure
 Cineworld keeps effective cost driven product which
so that each type customer can afford products and its
services.
 IMAX and 4DX supports organization to give high
Revenue Streams
 Organization has primary revenue streams in which
includes licencing fee, ticket sales for screening,
commercialization on the platform, cross selling
relevant products and it’s services. These are the
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quality in products while CSR supports company to
decline operational cost. thus, organization easy to
Meet individual customer objectives in the different
market.
major which increase cost of products but requires
for improving awareness in customer for the brand.
Cineworld company can face issue while implementing this business canvas model such as key
resources Human resource, AI are those resources which needs to give high specialization
because human resource aligns all activities related to business while AI brings improvement in
exiting technology. If these resources are not used their expertise then entire busines model can
be reductant.
CONCLUSION
On the basis of analysis done above, it can be concluded that the overall position of the internal
resources possessed by the company is very strong and this has helped them in increasing their
competitiveness. However, company needs to make itself more dynamic with the changing
environment so that it can maintain its position in the industry,.
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REFERENCES
Books and Journals
Antikainen, M. and Valkokari, K., 2016. A framework for sustainable circular business model
innovation. Technology Innovation Management Review. 6(7).
David, F. and David, F.R., 2016. Strategic management: A competitive advantage approach,
concepts and cases. Pearson–Prentice Hall.
Hernández, J.G.V. and Garcia, F.C., 2018. The link between a firm´ s internal characteristics and
performance: GPTW & VRIO dimension analysis. Revista de Administração IMED. 8(2).
pp.222-235.
Joyce, A. and Paquin, R.L., 2016. The triple layered business model canvas: A tool to design
more sustainable business models. Journal of cleaner production. 135. pp.1474-1486.
Lopes, J., and et.al., 2018. Does regional VRIO model help policy-makers to assess the resources
of a region? A stakeholder perception approach. Land Use Policy. 79. pp.659-670.
Magalhães, M and et.al., 2020. Canvas marketing plan: How to structure a marketing plan with
interactive value?. In Handbook of Research on Emerging Technologies for Effective
Project Management (pp. 158-168). IGI Global.
Rothaermel, F.T., 2016. Strategic management: concepts (Vol. 2). McGraw-Hill Education.
Toro-Jarrín, M.A., Ponce-Jaramillo, I.E. and Güemes-Castorena, D., 2016. Methodology for the
of building process integration of Business Model Canvas and Technological
Roadmap. Technological Forecasting and Social Change. 110. pp.213-225.
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