Kshitij 2013 submission

197 views
141 views

Published on

Published in: Economy & Finance
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
197
On SlideShare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
0
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide
  • “Good morning everyone. My name is AbhishekAgarwal. Here are my colleagues PulakSarangi and Pruthesh Chiddarwar. We are going to present Case Study on Expansion of Scrilloid Pictures. ”
  • “ In this presentation we will be going through the Company status of Scrilloid Pictures and its objective behind the expansion, further looking at the optional strategies and various pricing models that will lead us to choose the suitable expansion strategy.”
  • “North India has witnessed Scrilloid Pictures as major film exhibitor with 41 screens in 20 multiplexes in NCR.Along with North India, Scrillloid Pictures has strong presence with 43 screens western region of the country.It has succesfully beaten market competition from other miltiplex chains and single screens with well connected networking system due to its acquintance with the economics and dynamics of the afore said region.”Background data
  • Reaching the commanding position in Northern and western regions, as Industry is expecting southern and eastern markets to drive the next phase of growthScrilloid Pictures with view of expanding its base and increase its market hold is exploring southern and eastern markets .
  • To meet the ambitious plans of expansion, strategic models should be analyzed with keeping focus on sustainability.
  • The strategic group has proposed two strategies .Strategy 1 which aims on expanding in its current stream with focusing on different model of operation.While Strategy 2 themes advancement in unexplored segment by establishing new shopping malls which require development of high technical and managerial expertise.
  • Lets take a look at the SWOT analysis.Strength:Scrilloidis well acquainted with the economics and dynamics of the Film exhibition market , thus strengthening its position for expansion. Morevermost states in southern and eastern India provides tax benefits on screening of regional movies. Weakness:Stringent competitions in the initial phase will be major weakness of the firm.But the favourable demographics and high growth of film exhibition industry counts to the Opportunities for the firmAlternative modes of entertainment is might pose a threat to the company.
  • Moving forward ,3c analysis we will get proper insight of the position.
  • Targeted market of the multiplex industry is YOUNG, MIDDLE CLASS and HIG. Median age of the targeted market is youth.The current scenario shows an increase in disposable income implying targeted Market is ready to spend on Entertainment & Leisure
  • According to KPMG media and Entertainment industry report 2012 the market is in growing phase.With multiplex association of India’s estimate there will be an increase of 450 screens by next year.
  • Looking at the competition, Southern and Eastern markets are facing stringent competition from multiplex and single screen.While Pirated digital cinema is another potential threat.
  • With over 1000 movies churned per year ,selectivity and sequencing helps in maximizing the profit. But such flexibility is not possible for the single screen .Recent investments in the industry by various international ventures ensure that there is no problem regarding investments for launching in this regions.
  • Now, moving on to strategy 2 we apply Porter’s Five Force to have a view on it
  • By 80-20 rule 80% of the profits are due to 20% of the consumers so their satisfaction is very important as their frequency of visit will add to the profit
  • The malls would not be facing much threats as the sector has higher investments & it takes some to establish a brand value & create distribution channels.Also there are delays in clearances from government authorities for land & license
  • With the rise of e-commerce,malls face a huge competition from online players even some local markets are preferable as they provide flexibility of prices favoring the customers
  • Suppliers to the firm is the power of the firm.Being a new entrant in the mall sector,Scrilloid will not be having enough channels for input will add to its liability
  • As the urban people are the major target, so the economic situation will be a major governing factor in determining the health of the industry.
  • By above analysis,we feel that Strategy 1 will be favourableexpansionScrilloid ,so now well be showing a financial analysis for strategy 1
  • For supporting strategy 1 we are proposing two pricing model.Fixed Cost Pricing model Variable Cost pricing model.Let’s take a look at them individually
  • In this pricing model the stake holder’s get fixed amount from the multiplexes as the graph suggests All the data shown are in lpa
  • As total cost price is 2400lpa from the previous graph and assuming a discount rate of 8% by Capital Asset Pricing Model. By above discount rate Scrilloid has to repay a sum of 8 crores by making annual payment of 173lakh With a payback period of 6 years .
  • If we assume a foot fall of 12lpa we get a break even point & adding a profit the final price goes to INR160 which sums to total profit of 258lpa
  • If we look at the pricing model where stake holders work on sharing proportion .On decreasing the ticket price to 140 wrt 160 we can expect 16% increase in footfall which turns out to be just 36persons per show which will result in higher revenue from F&B & convenience charges
  • ClearlyEnhanced profits !!!!!!!!!
  • we focus on screening regional cinemas too & focus on advancement in our established sector which will help us to expand without denting our image in the industry
  • Kshitij 2013 submission

    1. 1. Case StudyonScrilloid Pictures
    2. 2. Moments to Consider 1 Scrilloid Pictures 2 Objective of firm 3 Strategic Models 4 Pricing Model 5 Implementation 6 Conclusion
    3. 3. Scrilloid Pictures• Successful film exhibitor chain in North and West India.• Beaten market competition.• Well connected networks.
    4. 4. Objective•Increase the presence in the market•Expansion in Southern and Eastern Market
    5. 5. Expansion plans• Strategic model•Sustainability
    6. 6. Strategic Model• Strategy 1 (focus on different model of operation)• Strategy 2 (development of high technical and managerial expertise)
    7. 7. STRATEGY 1 STRENGTH: WEAKNESS: •An established firm as a • In initial phase itself, it will be successful film exhibitor in exposed to stringent competitions. North and West India. • Unlike the northern region, in • Well connected networks eastern and southern region it will from supplier, have to focus on different model of • Expanding its current operation as here regional films stream of business. dominate the revenues. • Acquainted with the economics and dynamics of expansion. • Tax exemptions .OPPORTUNITIES: SWOT THREATS:• Favorable Demographics.• Cinema exhibition industry • Alternative modes ofin India is growing at 10% entertainment.per annum driven by • Uncertainty over entertainmentmultiplexes. tax.• Growth in Film industry. • Television. • Piracy
    8. 8. 3’C ANALYSIS CONSUMER 3 C’sCOMPETITION COMPANY
    9. 9. CONSUMER HIGH INCOMEYOUNG MIDDLE CLASS GROUP •Targeted Market is ready to spend on Entertainment & Leisure
    10. 10. MARKET• Industry Grew 11.5 percent in 2011 to Rs. 7000 cr.*• By next year multiplex to increase from around 900 to 1350.• Screen per people count is very less in India. *according to the KPMG Media and Entertainment industry report, 2012.
    11. 11. COMPETITION•Exposed to stringent competition ininitial phase.•Established single screen•Pirated Digital CinemaTelevision
    12. 12. COMPANY•Selectivity and Sequencing•Foreign Investment
    13. 13. STRATEGY 2-PORTER’s FORCESBARGAINING THREAT OF POWER OF NEW BUYERS ENTRANTS COMPETETIVE RIVALRYBARGAINING POWER OF THREAT OF SUPPLIERS SUBSTITUTE S
    14. 14. BARGAINING POWER OF BUYERS•Buyer concentration•Degree of dependency upon existing channelof distribution• Quality• Buyer Profit.• RFM (Recency,Frequency,Monetary Value)
    15. 15. THREAT OF NEW ENTRANTS: • Higher capital investment • Brand Identity • Switching costs • Distribution channel • Delay in clearances
    16. 16. COMPETETIVE RIVALRY• Online Player•Local Market•Exit barriers•Level of Standardization
    17. 17. BARGAINING POWER OF SUPPLIERS•Presence of Substitute input• Importance of volume toSupplier• Supplier concentration
    18. 18. THREAT OF SUBSTITUTES•Consumer Demographics• Flexibility of prices• Economic condition of market
    19. 19. COMPARITIVE ANALYSIS Parameter Multiplex Malls with MultiplexCompany Expertise High (4) Need to developStatus (1) Brand value Good (4) No (1)Entry Barriers Capital Relatively Very high(1) Investment low(3) Market High growth in High growth in film exhibition Real Estate industry(4) Market(4)Government Foreign Less(2) Huge(4)Policies Direct InvestmentTotal 17 11 *Each parameter is rated on a 1-5 scale
    20. 20. Pricing Model• Fixed Cost Price Model• Variable Cost Price Model
    21. 21. Fixed Cost Price Model800700600500400300200100 0
    22. 22. Fixed Cost Price Model• Discount Rate 8% (by CAPM)• Repay of 173 lpa with a payback period of 6 years Advertise Sales Convenie ment nce 8% 2% Food And beverage 25% Ticket Sales 65%
    23. 23. Fixed Cost Price Model• Estimated footfall of 12lpa• At break even point cost of each ticket is INR 138.5• Final ticket price of INR 160• Total Profit of INR 258 lpa @ INR21.5 profit on each ticket .
    24. 24. Variable Cost Price Model• Ticket price of INR 140• 16% Increase in Foot fall Owners share Entertainm 25% ent Tax 30% Distributors share 35% Rent 10% Revenue Distribution
    25. 25. • 10% Increase in sales of F & B• Increased profits of 427lpa from only 258lpa in the previous strategy

    ×