Environmental Forecasting in the Movie Industry

Environmental forecasting is a crucial component of an industry’s competitive analysis because its main purpose is to predict change within the industry. For an industry heading in the wrong direction, the movie exhibition industry should be dedicating a lot of resources to its forecasting of the competitive environment. The scope of environmental change is a big indicator of why the industry is headed in a downward direction. The entire industry is changing, not just one chain of theaters within the industry. All four major exhibitors in the United States are being affected by the consumers’ recent change of preference to stay at home and watch movies rather than make the trip out to a theater. AMC, Carmike, Cinemark, and Regal have all experienced a similar pattern of declining attendance at their respective theaters. Overall ticket sales have declined since the industry’s peak in 2002, showing that the speed of environmental change is moving at a relatively high pace. This high pace calls for a quick course of action if the movie exhibition industry wants to make a comeback in the near future, before other movie viewing options take over the vast majority of the market, which is the age 14-24 demographic according to the case study.

Due to the quickness alternative movie viewing options such as Netflix are gaining traction in the industry, the state of environmental change has become extremely intense. In fact, it has become so intense that an in-depth scenario analysis of the industry has become vital for the movie exhibition industry. Scenario analysis takes into account a wide range of factors that play into the successes and failures of an industry as a whole. Some of these factors include economics, sociology, psychology, demographics, and politics. In order to create a beneficial scenario analysis of the movie exhibition industry, we must ask what would happen if the environment should change dramatically? Well, because a