Marketing Portfolio of Greater Union Cinemas Pty Ltd - Case Study Example

Any business decision must be made after considering all the possible situations that the business organization must face given the available options. Any miscalculations done in the process can nullify the impact created by long and tedious process to provide stability to the business organization amidst various issues confronting it. This is the reason why majority of business organizations take the trouble of undergoing the strategic marketing process in order to anticipate problems that may arise in the future, deal with the competition, allocate funds and resources for future utility, and use its strategic advantages to achieve the goals and objectives set by the company in the most efficient manner (McKittrick, 1957). After thorough understanding of the marketing environment is established and all the internal and external factors of the business organization have been analyzed, the next phase of the strategic marketing process comes in. This phase is known as the strategic implementation phase. Once the marketing plans are laid out and are ready to be set in motion, implementation phase then follows (Winer, 2007). Implementation and control can occur anytime in the process particularly when implementation is not aligned with the plan. The necessity of monitoring and controlling strategic plans stems from the fact that such plans are made to achieve or effect massive changes in the function and/or the long-term. This means that strategic plans go through various stages of development that needs to be assessed, evaluated, and realigned to its original focus every now and then. Failing to continually monitor the developments of the implementation of strategic plans may be analogous to not planning at all. Most importantly, implementation will occur if the marketing mix and marketing strategies are already defined. This paper will look at the portfolio of Greater Union Cinemas Pty Ltd and determine which implementation strategy would work best for this business organization in order to attain the marketing goals and objectives defined for it. To be able to do this, the paper will look at various strategic marketing tools and at the results of the previous analysis on the company’s internal and external environments to be able to formulate conclusive arguments. Portfolio Analysis Tools Organizations especially the big ones would have a difficulty reading and interpreting various accounting, financial management, management, and operations data fresh from the volumes of reports generated each specific period. To overcome this difficulty, management and consulting firms develop graphical, visual, and matrix representations of the general picture to ease the reading and interpretation of such information. A matrix is a tool to record an array of data that have multiple elements. Two of the most famous marketing matrices are the BCG-growth share matrix and GE Matrix. Boston Consulting Group is one of the leading international risk management consulting firms. Its four-block matrix scrutinizes an organizations SWOT in terms of assets and investments and classify them according to the profitability they bring for the company. BCG-matrix breaks down the company’s products, investments, or assets into 4 main groups based on its relative market share and its growth rate in the present industry. (Relative market share is an indicator of the investment’s cash-generating ability measured against its strongest competitor). The classifications were Question Marks, Stars, Cash Cows, and Dogs. Cash Cows are investments that produce more cash with less investments because of its strong market position; Question Marks are investments that have low market share in an expanding industry; Stars are investments that has high shares in a growing market but is not sustainable for growth because it needs must investment to sustain it; and Dogs are those investments that require less investments but are too passive to generate cash in itself – which should be managed effectively to generate cash or should be scraped or debunked. GE Matrix on the other hand is very similar to BCG Matrix in that it places investment units in the grid of the industry. It plots the investments in the portfolio based on their attractiveness in the industry and based on the strength exerted by the company to these business units. One good feature about GE Matrix is it allows movements of the investments from one grid to the other depending on how the company wants to see these investments in the future. The marketing analysis performed was able to come up with brand positioning strategies that Greater Union Cinemas need to look into in order to establish a strong brand position as well as derive positive brand perception from the market. The strategies include the increase and highlighting of brand features, value proposition, market segmentation, market differentiation, and diversification of products. Some of these strategies overlap with each other, some are already integrated in the current marketing strategy of the company, while others are very difficult to implement given the constraint on time, manpower, and funds. Currently, Greater Union Cinema offered four major product portfolios that are aimed to acquire a greater market share. These portfolios are Cinemas, Film Technology, Distribution, and other entertainment-related investments. The company has four major types of cinemas which are: VMax Cinema which offers the widest movie screens and the most powerful digital surround-sound; Silverscreen Cinema which attracts customers for its exclusive both-style and spacious couple seats along with food and drinks that are not available in the Candy Bar; Senstadium Cinemas which are big cinemas that can handle more number of people who share the same movie passion; and Drive-in Cinemas which caters the teenage market as they watch double feature movies under the starlit night sky. The main features of these cinemas are aggressively marketed to the Australian public as its major profit-generating business. Greater Union Cinema also has investments in film technology with Atlab Australia, Atlab Image and Sound Technology, Filmlab Engineering, and Filmlab Systems International. The company’s distribution portfolio consists of percent ownership on Roadshow Distributors and Cinesound Movietone Production. The other types of investments of the company are also related to the entertainment industry. In order to decide which strategies would work best for Greater Union Cinema, it is necessary to analyze the present and future possible marketing strategies. The analysis will not only determine which strategies will be implemented but will also help the organization decide which will be aggressively pursued. Greater Union Cinema understood that it no longer possess the upper hand when it comes to technology in movie experience. Ultra wide TV screens, blue-ray discs, and downloadable movies are rapidly taking over the average movie-goer’s attention as he can watch movies anytime at his convenience without spending much for it. Because of this, the size of the company became a disadvantage as profits fall short of what has been expected. Opting to create a more positive and rewarding movie experience through its four major portfolios is the best move available for the company. Its investments in other sectors of the Australian entertainment industry are also not immune to challenges as its competitors are trailing behind it, as well as other smaller market players. As was already defined in the marketing strategy analysis, the company must be able to position these four brands in the market in such a way that the market will see value in going to these cinemas rather than download the movie from the internet and watch it at home. In order to determine which among the four major portfolio of Greater Union Cinema should be given more focus, as well as the other minor portfolios of the company; this paper will utilize the BCG Matrix and GE Matrix for the placement of these portfolios. Portfolio Analysis: BCG Matrix The BCG matrix plots the investments of Greater Union Cinema according to their profitability. With over 450 screens in 60 locations, the company’s cinemas remain the highest earner with the highest market share which qualifies it as a star in the BCG matrix. As a star investment, the company’s cinemas should maintain a large share in the market in order to maintain its profitability. However, because of the challenge of technology and the subsequent decrease in the popularity of cinemas (due to internet streaming sites and other downloadable video)s, the company is facing the blunt edge of this technological feature. The company has already made steps to maintain the status of this particular investment. Greater Union Cinema did this by introducing new features in its cinemas (like larger seats, bigger and wider movie screen, and posh movie designs) and diversifying the product it offers into four main products, each product giving moviegoers a different kind of movie experience by targeting very specific market segments. For example, Silverscreen Cinemas attracts sweethearts, couples, and families whereas Drive-in Cinemas attract teenagers and sweethearts on a date. Greater Union Cinema’s investment in film technologies is considered as its cash cow investment. This is because the company literally dominates the Australian market when it comes to film technology and cinema development. The company, with its unparalleled experience when it comes to understanding the dynamic needs of movie goers, positions its investments in the thing it understands most – how the moviegoers would want their movies to look and feel like. Thus, investing its portfolio on something it has deep knowledge about allows the company to lead the market and establish strong market presence. However, the growth of this investment is very minimal if not periodic. This is because the company’s growth is limited only to the Australian movie-making market owing to the fact overseas operation and expansion is still beyond the company’s immediate course of action. This means that Greater Union Cinema must always be on the lookout for possible market growth and increase in the demand for this investment so that they may able to turn this cash cow investment into a star investment. Greater Union Cinema’s question mark investment is its ownership on the distribution companies. The growth rate for this business is pretty high but with a small market to cater, its investments on entertainment distribution is a question mark. The growth margin for this type of investment is considered as high because entertainment distribution is no longer confined to CD and DVD sales but has also included sales on online streaming videos and downloadable subscriptions. However, the strong presence of competitors for this approach, especially when taking into consideration entertainment distribution giants like Blockbuster and other sites offering low-quality films that can be downloaded for free, restricts any substantial increase in the market share for this investment. In other words, Greater Union Cinema must devise ways to turn this question mark investment into cash cows or stars in order for the company to make this investment portfolio profitable. The dog investment of the company or the investments where there is low market share and has low growth are its diversified investments in various aspects of the entertainment industry. While there is not much public information about what types of investments these ‘other investments’ are, it is most likely that these investments are not very profitable (which can be attributed to low growth and low market share) since Greater Union Cinema did not actively pursue these investments and make it among the top investment portfolios. It is also likely that the investments made in this ‘other investments’ are highly diversified and in preparation for the possible swing in the market like movie production perhaps. Portfolio Analysis: GE Matrix Business Unit Strength High Medium Low Industry attractiveness High Medium Low Because of the lack of public information about the nature of the ‘other investments’ Greater Union Cinema has, it is disregarded in the GE Matrix Analysis. The matrix shows the three types of investment portfolios already defined in the BCG Matrix analysis. For this matrix, the present condition of the investments is considered as well as the possible thrust of these investments in the future given its attractiveness and the strength it offers its company. The company’s investments on its cinema remain the strongest and the most attractive to the market. This is the reason why the company needs to be able to come up with strong marketing and sales strategy to keep the relative strength of the investment in the market as it brings in more people and thus more profit for the company. As long as the company is able to lead the competition, owing to the large number of cinemas it owns and the geographical distribution of these cinemas, and as long as the company is able to convince the market that movies are worth seeing in their movie houses rather than at home, there is no threat on the stability of this investment. The company’s investment on film technology was made with the hind thoughts that this will create bigger opportunities for the company in the future. As Australia’s leading film technology solutions provider, Greater Union Cinema exerts more effort in its film technology investments to be able to turn this business unit into a definite star investment as per BCG Matrix. In the same manner, the company’s investment on film technology, although given strong support by the company, is yet unable to gain enough momentum to lead the industry, given the presence of the competitors that offer the same set of film technology solutions, if not better. The company needs to increase its market share by intensifying the effort to make the selective market for this kind of investment aware of its presence. It can only do this if it will be able to create demands from what it has. As for distribution, it has low industry attractiveness and at the same time the company is not increasing its efforts to strengthen its presence for the investment, which is just the right thing to do. As long as the issue on free online distribution of movies and other entertainment media and as long as the issues of piracy won’t be resolved, investing more for this product would just become a waste. What the company can do for this investment is to increase its attractiveness (maybe through collaborative effort with other online distributors) in order for this investment to become sustainable. Recommendation From the given analysis, it is highly recommended that the company should maintain the profitability status of the investments it made on its cinemas by updating product features and massive marketing campaign. In the same manner, it is also recommended that the company should intensify all efforts to turn its investments on filmmaking technology into star investments (as per BCG) or move its current location to high-industry attractiveness and high business unit strength. The effectiveness of the implementation process will be gauged based on the profitability of such actions as well as the potential growth it could bring to the company in the future. Hills, C and Jones, G (1997). Strategic Management. Fourth edition, Houghton Mifflin Company. McKittrick, J. B. (1957), ‘What is the marketing management concept?’, in The Frontiers of Marketing Thought and Science, Frank M. Bass, ed., Chicago: American Marketing Association   Winer, R.S. (2007). Marketing Management 3rd ed. Upper Saddle River, NJ: Prentice Hall  Read More