Introduction
Macro environment analysis remains to be one of the basic initial steps in any strategic analysis (Williams& Adrian, 1997). Therefore, this paper provides a PEST Analysis of a movie industry while using ‘A Horror Show at the Cinemaplex’ as a case study in its analysis.
PEST approach is an analysis of the macro environment that involves scanning the external environment of a business entity. It helps to understand the political, socio-cultural, economic and technological environments.
It is a useful tool that is used to evaluate the market by determining whether there is decline or growth in business activities. Therefore, it provides the organization with various options that the organization can implement to direct its business activities.
Macro-environment analysis
Political/Legal factor
Economic factor
Socio-cultural factor
Technological factor
Environmental factor
Summary of Macro-Environment Analysis
Macro-environment analysis of ‘a horror show at the cinemaplex’ using PESTE approach covers five aspects of the external environment of operation. Therefore, the analysis covered political, economic, societal, technological and environmental factors surrounding the organization in its business operations.
For that matter, all these factors through the analysis done, it has been established that they have immense impacts on the business operations of the movie theater industry in either a positive or negative manner.
To begin with, political factors have been found to offering both palatable and non palatable factors in a balanced form for the industry. For instance, since politics concerns crafting of policies in societies, there have been several policies that have been passed in the operating environment that have been both friendly and unfriendly to the movie theater industry.
For example, a policy was adopted by FCC that required all broadcasters to change to digital technology by June of 2009. This policy promoted home theater to the disadvantage of the movie theater industry.
In respect to societal analysis, the results of the case study indicates that the socio cultural factors in the environment offers more positive factors for movie theater industry as compared to its negative related factors. On the other hand, economic analysis indicates that there have been slow rate of growth in respect to revenue turnover of the film industry.
For example, for the period of ten years, the revenue had only grown by five percent which is relatively low compared to that long span of time. Nonetheless, management of the film industry also became a challenge to the players in the industry since it required substantial amount of capital compared to other alternative sources of entertainment.
Moreover, concerning technological analysis, it was established that there have been various technological changes that have taken place which have impacted on industry performance. For example, there have been revolutions in the cinema industry since digital technologies which have resulted to high resolution of digitized images on the screen.
This has made players in the industry to embrace the digital technologies as opposed to the traditional technology. Nonetheless, technological environment offer more positive factors to the theater industry as compared to negative factors.
Lastly, concerning the environmental analysis, it was established that there was widespread complaints from customers concerning the environment from which they were subjected to view these movies.
For example, it was affirmed by several customers that the environments were disorderly and some activities usually took place that acted as disruptions during move viewing. However, environmental factors still provides more positive factors for the theater industry as compared to negative attributed factors.
Future Direction
The movie theater industry is in future characterized by several developments that are likely to revolutionize the entire industry. Nonetheless, this revolution is likely to revolve around digital technology.
The digital technology is likely to turn and revolutionize the movie theater industry by packaging these movie products into new digital media (Nelmes, 2001). For that matter, Movie Theater products are likely to expand and reach more potential clients than it is the case in the current times.
Moreover, the future trends of the film industry is leading to an online showcasing where movie theater products will be marketed and exhibited using online technology. For instance, the technological players’ are shaping the industry towards this direction.
The best example is the YouTube technology which is an online service supported by Google. This technology enables viewing of movies and other films online. Therefore, it is evident that the future direction of the film industry is heading to online viewing which will enable film lovers to view their preferred film and film stars in any place irrespective of the geographical location.
Internet technology will also turn out the film industry into a virtual film industry which is directly opposite to the current arrangement of the industry.
The requirement that one needs to be in a certain physical location to entertain himself or herself from Movie Theater is likely to change due to amalgamation of internet technology.
Consequently, due to faster development of internet technologies such as wireless devices and mobile technologies, several remote locations will be connected which were not covered with physical movie theaters (Kerr, 1986). As a result this is likely to increase the rate of people appreciating film industry as a resource for entertainment.
Moreover, in respect to social aspects of the societies, there is a drastic shift in respect to social media and networks. The new and future pattern is the application of web 2.0 technologies which have been entrenched in diverse social networks (Pendakur, 1990). Therefore, the film and movie theater industry have no option but to appreciate this technologies and apply them in their operations.
In addition, the traditional film technology had been characterized by large sizes and bulkiness. However, technology is now transforming this approach by coming up with ubiquitous gadgets. This is going to shape the future of the film industry. It can be proved from the use of potable ICT devices that are already in use today and therefore, film industry is likely to take the same route.
In addition, the trend of the technological improvement is going towards avatars and seamless standards which will be capable to move from one platform to another.
As a result, the auxiliary technology will go through enhancements to have a better and improved 3 dimension visualization. Moreover, this will also help in saving substantial amount of capital since transfer from one format to the next will be highly valued in the film industry.
Furthermore, economics will influence the film industry in a number of ways. For instance, due to economic crisis that constantly affect the world, it is likely to have adverse effects on the film industry.
Therefore, the industry is likely to face some scarcity of resources in the near future since recession and ever declining consumer purchasing power is also likely to have some adverse effects to the industry (Benshoff n& Sean, 2004).
References
Benshoff, H. & Sean, G. (2004) America on film. UK, Blackwell Publishing.
Kerr, P. (1986) The Hollywood film industry: a reader. New York, Routledge& Kegan Paul plc.
Nelmes, J. (2001) An Introduction to film Studies. New York, Routledge.
Pendakur, M. (1990) The Political Economy of the Canadian Film Industry. Canada, Wayne State University Press.
Williams, T. & Adrian, G. (1997) The Business Approach training. England, Gower Publishing Ltd.