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Case - Assignment Example

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The first multiplex theater was located in the Toronto’s eating center. It was a newly developed shopping center. 18 separate theaters with the seating capacity ranging…
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CINEPLEX’S FIRST GENERIC STRATEGY: The idea of developing the multiplex theater came into being with the concept of targeting a Niche market. The first multiplex theater was located in the Toronto’s eating center. It was a newly developed shopping center. 18 separate theaters with the seating capacity ranging from 60 to 150 people contained by the first multiplex theater.
Cineplex targeted a niche segment, and the company considered itself as a niche player in the market. Large theaters were profitable at that time but Cineplex found the gaps in the market and fulfill the needs of that specific segment. Cineplex had the advantage to show specialty movies, in particular foreign art films that could not be shown in large theaters with reasonable profit margin. The basic purpose of existence of Cineplex was not to compete with the large theaters but to develop a new market that to some extent does not exist. All the screens in the Cineplex presented a compelling picture of profit margins that show a success of the newly developed idea.
After the comeback from the verge of bankruptcy Drabinsky has the possession over one of the North America’s major theater chains. The market was diversifying at that time and TV channels were eating the market share by showing the movies with the comfort of home. Drabinsky was concerned with this situation and decided to change the perception of moviegoers by enhancing the movie going experience in theaters. The enhancements were brought regarding the renovation of theaters. At first the uniformly drab design of Cineplex was abandoned that was common in most theater chains, introduced the art work in the lobbies, lush woolen carpet spread over the marble floors of theater and also incurred some other changes in the physical structure of theater. The screening auditorium featured scientifically countered seats, digital background music, and state of the art projection systems. One more new idea was introduced; it was real buttered popcorn in the concession stands and cafes that offered freshly brewed cappuccino. With the introduction of such changes in its theaters, Drabinsky changed the face of film exhibition. This stand gave a sustained competitive advantage for a long time to the Cineplex.
Drabinsky continuously focused on innovations and new ideas implementation in the business structure. He was always looking to increase the power of the company by consistent increase in the market share, new market development or market expansion etc. Continuously increasing market share was his main concern. Drabinsky had a little focus on the increasing cost and expenses of the company. The designing of high-tech featured theaters and hiring of several employees just for the convenience of customer had given a considerable impact on the cost of the company.
“Allen Karp”
Allen Karp was hired by Drabinsky as a senior executive vice president of the Cineplex. Karp faced a highly pressurized situation when the companies had going through form the phase financial instability. The company’s high cost was the main concern for the Karp, and he directly started to reduce the cost of production from the different parts of the business. So many screens were sold, many employees were fired, and some other downsizing decisions were taken by the Karp. Karp served as a cost effective manager at the time of financial instability, and he had succeeded in his target. Read More
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