Pyramid Saimira is an Indian entertainment company operating in 6 countries. It has diversified businesses including theatre exhibition, film and TV production, distribution, hospitality, and animation. The company follows a vertical integration strategy with businesses across the entertainment value chain. This allows it to reduce costs through efficiencies and achieve economies of scale. However, the entertainment industry faces high threats of substitution and rivalry due to alternatives and a fragmented competitive landscape. Pyramid Saimira aims to address this through a centralized supply chain and standardized delivery processes.

1. Pyramid Saimira
Entertains a Dicey
Strategic Option*
LIZA DSOUZA

2. Facts

Indian entertainment industry grows at an annual rate of 18%- much
more than the national economy

Measured to be 437 billion presently and grow to 1 trillion in 2010

Due to


Technological advancement


Positive measures taken by the government
Entry of large corporate houses
Various segment : radio, television, films, out of home
advertisement, live entertainment

3. Introduction

Pyramid Saimira is an Indian multinational entertainment
company, operating in 6 countries

One of the World’s fastest growing entertainment group.

Its diversified businesses included

Exhibition (Theatre)

Film and Television Content Production

Distribution, Hospitality, Food & Beverage

Animation and Gaming, Cine Advertising, etc.
which has significantly altered the profile of Tamil Nadu cinema, the Tamil
film music scene and entertainment industry in India at large.

29 multiplexes, 371 screens to 2000 screens by 2012

4. Corporatization

Traditional organizations dealing with various aspects of film making
become formal organizations under a legal process

It involves

Advancement in technology: information and communication

Professionalization

Organized in a systematic manner

5. Objective of Pyramid Saimira

To have a chain of theaters for exhibition of films that have been
encrypted in digital form

The theaters are linked through satellite based communication
technology

The one stroke release and exhibition of films reduces piracy

Low cost as rolls and reels are not involved

Value added services

Shopping mall

Exhibition space

Education and training venues

6. Vertical integration approach
It follows a vertical integration approach in its business model
Advantages

Reduce Cost –lease 15yrs

Improve Efficiency- digital libraries
By decreasing transportation expenses and turnaround time

2 types of vertical integration are

Backward Integration

Forward Integration

7. In vertical integration

The company manages and represents artist

Produces shows

Sells tickets

The own theaters and distribution of films.

They own digital theater so the cut the middle man and are able to
achieve economies of scale
1.
Centralized supply chain
2.
Standardized delivery process-low operation cost – high investment
3.
Additional revenue streams
4.
Partnership

8. Porters Five Force Analysis
Bargaining Power of Buyers

Consumers can switch channels

Increased globalization

Variety of alternative sources of entertainment
HIGH

9. Bargaining power of Suppliers

Many film studios

High number of content providers

Many professional suppliers
LOW

10. Threat of New Entrants

High sunk cost

High capital requirement

Complicated distribution network

Mature market
LOW

11. Threat of Substitutes

Significant Events like world cup

Cultural event

Print media

Internet
HIGH

12. Industrial Rivalry

Highly fragmented market

Highly perishable products

Highly diversified rivals
HIGH

13. STRATERGIC GROUP ANALYSIS

Helps identify who the direct competitors are and on what basis to
compete on

Raises the question of how likely or possible it is for another
organization to move from one strategic group to another
The goals of strategic group analysis vary depending on several
strategic group characteristics, including the size of the market, the
diversity of products offered, the geographical proximity of the
competing companies, and where the products are sold.

14. High
Zee
Sun
PVR
Inox
Market
capitaliza
tion
Saregama India
Den Networks
NDTV
Pyramid saimira
Prime Focus
Mukta arts
Low
Narrow
Demographic reach
Broad

15. Subjective factors

Piracy in India

The middle man/ distributors cut short profits

The theater infrastructure can be further expanded

Creating content libraries, family entertainment centers