Shall the assay group strategy for diversification succeed? Why?
Yes, it shall succeed since the strategies also succeeded. The first reason behind their success is linking their prices to the demand and the number of tickets booked in advance. Just similar to the essayjet’s strategy, this one shall succeed since arrangements of cinemas and having peak times like on Fridays attract many advance ticket sales. In the United Kingdom, the first operating capacity is placed at 20 percent thus entry of EasyGroup with best offers cheaply below this mark will attract much audience. Different from other cinema operators, this company is offering cheap services so that they can create loyalty from the customers.
The second reason behind this success is reliance on technology thus automating the service process hence cut of labour costs. Bookings on this cinema operators should be through the internet with fares for those booking in advance placed at 20 percent low. This is a thumbs up to the process since EasyGroup plans to reduce the crew number from 20 to for mostly comprising of the projectionists and the staff. This is a concept best suited to dispensing with the ushers and the box-office. A unique barcode that would be activating the entry turnstile at the film centre would be purchased on the internet by the consumers.
Thirdly, the number of screened films would be the end goal thus restricting any display of advertisements or any promotional events. Customers would be free to bring in food or drinks instead of the yester handing out of three quid for popcorns.
2. Should easyGroup enter in the cinema business? Please explain your position.
EasyGroup should enter into this cinema industry though it is a risky but profitability has reliance on the success of small films’ number. Since EasyGroup is an independent company, then it shall sell its exhibitions to the consumers. There lacks independent cinema has brought competition to big movie sectors inclusive of Hollywood whereby there is a rivalry with the developing importance of promotional and advertising activities. EasyGroup should enter this business since much of the yesterdays’ costs such as costs of labour has been cut off due to the embracing of technology. Technology has been introduced to man all operations in the cinema sector thus channelling the labour costs to other development projects.
Another reason to enter into this cinema business is the population watching movies in cinema centres. In the United Kingdom, an average visit to the cinema is 5.2 times that of the United States’. The attractive aspect of this high number of turnout in the cinemas is the cheap fares, the timings and films shown.
In the United Kingdom, youth are the prolific cinema goers with families taking the second high number of cinema-goers. The old group has not been left out by the United Kingdom’s cinema-goers whereby these oldies get some other services such as private members club only.
Technology usage is the leading factor behind the success of cinema industry in the United Kingdom with many youths using the content-rich ads over the web. In case of any advert on hottest cinema, the consumers are likely to purchase tickets in advance. Fortunately, EasyGroup has embraced technology which is essential to steer this sector with ease hence call to enter fully into this business.
Cinema business should be the way to go by EasyGroup since all process for business protection is set in place inclusive of the following:
- Protecting the brand thus having required licenses;
- Has incubation period for this business idea hence will see if it is a success or failure through pilot projects;
- EasyGroup is an organised entity thus knows its objectives.
Haji-Ioannou, Stelios. “Extending the “easy” Business Model: What should easyGroup Do Next?” INSEAD: The Business School for the World (2014): 25. PDF.