What should

EasyGroup do next?
Extending the “Easy” Business
Model

Group 6
HANDA Premik
LI Xiyan
Mandhana Varun
CONTENT

1 Case Review
Who is easyGroup?

2 Easyjet vs EasyCinema
A business model relates uniquely to a
business situation, specific strengths of the
firm, competitive environment, regulations,
etc.

3 easyCinema’s further strategy

Internal analysis: SWOT Analysis
External analysis: Porter’s 5 forces
Case Review
Who is easyGroup

EasyGroup
a branded incubator with a mission
• To create long-term capital growth
• By selecting and incubating substantial,
profitable and sustainable business
• To reduce the cost of living and extend the
easy brand

easyCinema - A revolution ? Reduced cost base Inspiration from LCC concepts

The Easy group proposes to Online sales, entry turnstiles Early bookings for cheaper tickets,
introduce the LCC concept in the instead of ushers, no smaller and more cramped seats,
cinema exhibition business. advertisement or F&B section no advertisements
Case Review
3 fundamental elements in movie business

1 Hollywood Studios
“the blockbuster effect”

3 easyCinema, UGC
The UK cinema market: 2 20th Century Fox
emergence of multiplex 2 types: Studio owned or
independent
Agree or Not

A business model relates uniquely to a

business situation, specific strengths of the firm,
competitive environment, regulations, etc.

AGREE.
Idea Selection Viability Check
Internal Environment: SWOT Analysis of EasyGroup

STRENGTHS WEAKNESS
• Low cost structure • Hard to get rights to screen films
• Technology oriented • New entrant in entertainment industry
• Pricing strategy • Radical concept against habits: buying tickets in
• Established brand image Risky Venture advance, smaller seats
But
Prior Experience; THREATS
OPPOTUNTIES
Market Potential • Existence of a distributors & incumbent
• Companies trying to exit the exhibitors’ cartel
market, opportunity to buy • Customer expenditure is stagnant in box
assets at a bargain office
• Personnel cost to be deducted
 External Environment : Porter’s 5 forces Model
The business environment appears competitive, but a meaty prospect

LOW LOW HIGH NEUTRAL NEUTRAL

New entrants Substitutes Customers Suppliers Rivalry

• High capital • Consumers have

• With the expensive • 37% of the movies • Despite top players
investment the choice of movie
‘first-run films’ supplied by US covering majority
• High brand loyalty being released in • And a choice of Majors of the market
• High competition cinemas, threat of theatre • But ~53% are • Our USP makes us
substitutes remain independent stand of the
• Thus, low threat of • Resulting in high
low suppliers competition
new entrant bargaining power
Mimeographing EasyJet

01 04
easyGroup Business Model Yield management
Low costs, no-frills, maximization of the capacity Used for the airline business and can be applied to
and utilization rate, and price yield management easyCinema. Pricing strategy: price linked to
demand, advance purchase and more for peak-time
movie tickets
02 05
Web Solutions Consumer-oriented Businesses
Internet makes this business model a dynamic one, Displays significant price elasticity and require a high
with a young and accessible image fixed-cost base and low marginal-cost to service
additional customers

03 06
Self-serving system Customer Maximization
Allows fix costs to be avoided by managing the Maximizing both capacity and the extent to which it
scheduling, pricing, booking, payment and various was utilized
other aspects of the business and outsourcing to Could grow the cinema admissions well above
the customer current rates
easyJet vs easyCinema
Could the latter simply copy the former?

easyJet easyCinema
Business Model

Lower price Lower price reduces

√ works
revenue also comes
revenue
without real estate
from hotel etc. business
Business situation
No frills works No frill reduces revenue
Firm strengths
√ no meals provided reduces
cost, caters to short journey
Environment
No popcorn is not necessary for
catering to entertainment
condition
… Cinemas have high
Large number of
√ airlines
Utility of airplanes
renting cost
Utility of cinemas is not
guaranteed
maximization
Horizontal Integration
EasyGroup’s future map

• Cinema accounts for only

25% in value chain

• Integrating to the parallel

domains would be huge
step

• Great increase in video

sales, which implies
gradual transformation of
the film industry
 Entry Strategies

Acquisitions Quality Other Sources Innovate Loyalty

Companies exiting High quality Common customer

-> experience -> Outsource F&B for rental Cater to local tastes - loyalty program for
Buyout older Best in class sound income & Advertisements > screen sporting the various business
cinemas at a and display, clean events to create an eco-
bargain theatres system

Marketing Upgrades Control Leverage other business

Emphasis on informing Implement tech Tight control on labour
about cheaper tickets upgrades to expenses with bare Sweating of assets in a
when booked in automate customer minimum staff levels. symbiotic manner
advance as well as service Reusage of staff like in
better value airlines
Cost Method Analysis Payment Structure

Integrated distributors
01 Nut scale method
US majors have strong bargaining power

Independent distributors
02 Sliding scale method
With majors flowing - easyCinemas has
47% Others the upper hand
9% Concession Cost of Sales
21% Staff Costs
27% Film Rental

• Focus on reduction in Staff Costs

• Elimination of Concession Cost of Sales
Leveraging other business
EasyGroup’s future map

Synergy + Proper usage of space Customer attraction

A section of the parking lot can be Complimentary brief Internetcafe
used for easyCar service usage with movie tickets ->
Users generally stay for longer
easy
easyCar Internetcafe
More-Spend Tactics ZERO Advertising Costs
Free movie screening for easyMail Advertisement expenses
premium passengers / in- easyJet easyValue
could be avoided
flight entertainment users Shared on a barter basis
 Thanks for
coming to
easyCinemaJ
easyCinema