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AMC: Strategy for Solving
Cinema’s Problem
KSB 613 Strategic Decision Making
Group Project: Part 2
Naulin Mombo
AMC Overview: A Weakening Foundation
Core Competency
1
➢
➢
Customer Responsiveness
Maximizing Value
Competitive Advantage
➢
➢
2
Acquisition + Size
Unique Experience
The Problem
3
Declining Demand
Problem Analysis
Declining Demand: Falling Ticket Sales, Unfavorable Consumer feedback to
investments, changes in consumer preferences, substitutes, threats, high costs = limited
lifespan
(Quantitative & Qualitative Data to support)
Consolidation:
Strategy for
Solution
Option #1
– Industry is mature
– Sell off Suburban locations
(quantitative data needed) and
invest in high-performing urban
theatres
– Maximize Value in theatres: Ultra
Premium experience
– Change the model: Rather than
many locations, only invest in
consumer-dense, urban locations – Bring the customers to AMC
rather than chase customers.
Revenue Maximization
➢ AMC should adopt the novel approach to the P&L
Strategy for
Solution
Option #2
challenges and embrace mix management in order to
discover new ways of delivering premium offerings and
maximize profitability.
➢ Manage the assortment sold to unlock volume or
profitability and understand the true value drivers for
individual segments of customers.
➢ Segment the movie-going experience by giving the
audiences chance to choose between a regular ticket or
an IMAX admission offering higher resolution, better
sound, larger screens and recliner seating.
➢ Capitalize the augmented product delivery by identifying
customers who are willing to pay more for an IMAX
experience.
➢ Identify consumer’s wants of luxury and convenience to
offer various increased pricing tiers and strategically
meet demands.
Marketing diversification
Strategy for
Solution
✓ Develop market segmentation surveys to obtain the
Option #3
✓ Optimize the company resources by putting excess cash
customer-specific information to be used for creating
groups which share common characteristics.
✓ Expand the portfolio of services to offer something the
competitors cannot and beat competition.
✓ Leverage positive associations with the newly acquired
brands to polish the face of company the public.
flow to work and improve corporate-level decisionmaking.
✓ Increase market share and profit margins to appease
shareholders.
Profit Maximization
Strategy for
Solution
Option #4
✓
✓
✓
✓
✓
Increase customer lifetime value by
delivering consistently excellent
experiences.
Up-sell, cross-sell, re-sell to increase sales
to increase current customer’s
consumption of products.
Constantly review product portfolio and
pricing to understand the true unit
margins for each product.
Adjust pricing/cost of goods sold (cogs) so
that services may be priced correctly.
Assess and reduce operating costs like
utilities, equipment and inventory,
marketing and advertising, research &
development.
References:
➢ Joseph, N. (2017, April). AMC Entertainment: Recent Acquisitions Create Value For Shareholders (NYSE:AMC).
SeekingAlpha.
https://seekingalpha.com/article/4066056-amc-entertainment-recent-acquisitions-create-value-for-shareholders
➢ AMC. (2022). Financial Performance – SEC Filings – 10K & 10Q | AMC Theatres. AMC Theatres.
https://investor.amctheatres.com/financial-performance/sec-filings/default.aspx