Home Search Sitemap Contact Bookmark

Free Dissertations - Business Dissertations

While It Has Seating Capacity For 750 Patrons, The Run Down Nature Of The ...

While it has seating capacity for 750 patrons, the run down nature of the cinema means that on most nights it fails to realise its potential.
The cinema has had a relatively steady customer base, but the recent opening of a multiplex cinema complex in Shepherd's Bush has meant that patron numbers have been down.
Even before the opening of the new multiplex cinema, the cinema had already been suffering a downturn since its heyday in the mid-1980s due to external factors. These have included a rise in property prices slowly changing the demographics of the people who live in the area, shifting customer entertainment habits (people have many more entertainment options available to them today) and the fact that the window between a release in the cinema and subsequently on DVD has been shrinking and movie piracy issues. While these issues have affected the cinema in a negative way, these are also the issues on which the prospective owners believe they can capitalise.
This downturn in patron numbers has meant that the cinema is unlikely to make a profit this year and with the current owners not having the funds to invest into upgrading the cinema, it is likely that the this year will be only the start of a downward earnings trend for them.
In light of this, the current owners have decided to sell the cinema while it is still showing some profit. This has created the opportunity which is set out in this business plan.
Financial Situation and Legal Requirements
West London Cinema has been owned by the same family since 1975. It has always prided itself on its friendly atmosphere and reasonable prices. Unfortunately, the owners have not always ploughed the cinema's profits back into the business and as such, it has become a little run down with increasing numbers of complaints about uncomfortable seating, poor screen resolution and a unimpressive sound system.
The owners wish to borrow £250,000 pounds to achieve their business objectives.
With respect to legal requirements, the owners will need a liquor licence, building approval from their local authority, a hygiene inspection of their kitchen and advice from a solicitor as to whether or not they are able to trademark the Gold Class name.
Industry Analysis
Industry Description
The cinema industry as a whole is facing challenges from many sides. Consolidation within the UK market means that four groups (Terra Firma, Blackstone, Vue and National Amusements) now own over 70% of UK screens. This consolidation means that the larger cinemas are better placed to meet the challenges of a quickly changing marketplace. Unfortunately, the losers in this consolidation of the marketplace and the emerging challenges to the cinema have been the small, family run cinemas.


Thanks