Critical Success of PVR cinemas in India

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TABLE OF CONTENT

                                             

Mini Case………………………………………………………………………………. 2

Preface……………………………………………………………………………..........3

Introduction……………………………………………………………………………. 3  

     The Film Industry……………………………………………………………………3

      The Multiplex Business Model……………………………………………………... 4

PVR Cinemas…………………………………………………………………….......  5

     About the Company………………………………………………………………..    5

      Financials…………………………………………………………………………… 6

Industry Analysis……………………………………………………………………. 7

      SWOT analysis…………………………………………………………………….   7

      PEST analysis………………………………………………………………………. 7

       Porter’s Five forces Model………………………………………………………….. 8

Company Analysis…………………………………………………………………. 11

       SWOT analysis…………………………………………………………………….. 11

Identification of CSFs………………………………………………………………. 12

       Industry specific CSFs……………………………………………………………. 12

        Firm specific CSFs………………………………………………………………... 13

        Environmental CSFs……………………………………………………………… 13

IT-IS Applications……………………………………………………………………15

     Existing applications…………………………………………………………………15

      Proposed strategic IT-IS applications………………………………………………..16

References…………………………………………………………………………… 16

MINI CASE

On February 24, 2006, PVR Ltd. (PVR), India’s largest cinema exhibitor group,

inaugurated PVR Rivoli, a new multiplex in New Delhi. With this, the company, which

introduced the concept of multiplexes in India, had a total of 51 screens in different

Indian cities. Earlier, on February 01, 2006, PVR had launched a five-screen multiplex in

Hyderabad. In the fiscal year 2004-2005, PVR attracted 4.9 million movie-goers, while

the figure was 6.47 million for the nine months ended December 31, 2005. The company

started its operations in Delhi in 1996-97 and initially concentrated its efforts on the

National Capital Region (NCR).

However, its aim was to have a pan-India presence and it later ventured into the southern

part of the country setting up an 11-screen multiplex in Bangalore, Karnataka, in 2004.

PVR’s expansion plans included B and C grade cities like Indore (Madhya Pradesh),

Lucknow (Uttar Pradesh), Visakhapatnam (Andhra Pradesh), Aurangabad (Maharashtra),

and Latur (Maharashtra).

It planned to increase the total number of screens to 75 by the end of the fiscal 2005-06

and to 200 by 2008. The expansion would require an investment of about Rs 4 billion.

PVR raised Rs 1.5 billion through a public issue of its shares in December 2005 and the

remaining Rs 2.5 billion was to be funded through internal accruals.

PVR was credited with bringing about a major change in the cinema viewing experience

for the Indian public with the provision of comfortable seating, state-of-the-art screens

and projection systems and audio visual systems. As of 2005, Indians were spending

about US$2 billion per year on movie tickets.

This was expected to grow by 30% over the next five years. This potential in the cinema

exhibition business had attracted many big players from other sectors like real estate,

construction, and media. Companies like Adlabs, Satyam, Prasads, Funcinema, Wave

Cinemas, Inox, Shringar, etc. had already started their operations in the multiplex

business and were making huge investments in expansion. Their expansion plans were

expected to pose a serious challenge to PVR.

The origins of PVR can be traced to March 1974 when Priya Exhibitors Private Limited

(PEPL) was established. The private company operated a single-screen cinema hall called

Priya at Vasant Vihar in Delhi. The founder, Bijli Pahalwan, owned other businesses,

chief among them being the Amritsar Transport Corporation Private Limited (ATCPL), a

freight carrier company. Pahalwan’s son, Ajjay Bijli (Bijli), joined the family business

after graduating in 1988. From the beginning, Bijli felt that the cinema business was more

glamorous than the transport business, and so paid more attention to PEPL.

In the early 1990s, the cinema exhibition business in India was passing through a bad

patch because of the growing popularity of video cassette players. People were renting

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video cassettes of the latest movies and watching them in the comfort of their homes.

However, good quality theaters were still in demand....

Source: http://www.icmr.icfai.org/casestudies/catalogue/Marketing/MKTG127.htm

PREFACE

This report present a strategic IT-IS plan for PVR Cinemas. It looks at the existing IT implementations and suggests a few applications to improve the performance of the company. We look at PVR Cinemas in particular and the multiplex film exhibition business in general to identify factors that are critical to the success of PVR Cinemas in this business. Based on the analysis, we suggest certain IT-IS applications ...

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