Running Header: Mini case study: Hollywood Goes Global

Mini Case Study: Hollywood Goes Global

Shahbaz Khan

Albany State University

MGMT 6199, Business Policy & Strategic Mgmt.

Dr. Devi Akella

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 Hollywood case study

Questions:

1. How has the global environment changed for U.S. (Hollywood) movie studios

since 2000? Explain.

 The global environment changed drastically for the U.S. (Hollywood) movie

studios in the early 2000s. Globalization has changed the economics of the

industry. The case study stated that by 2020 more than 70 percent of total ticket

sales for Hollywood blockbusters will come from foreign ticket sales. Foreign

ticket sales used to be 50 percent in 2000. Hollywood is unable to continue

producing big-budget movies without foreign revenues. Foreign sales now make

or break the success of the newly released big-budget film. Movies must do well

in China because it has become the largest market globally.

2. Apply the integration-responsiveness framework (see Exhibit 10.8) to describe

which global strategy Hollywood studios followed originally, and how their

strategic positioning has changed over time. Explain how and why?

 Global integration refers to coordinating the firm's value chain activities across

countries to achieve worldwide efficiency, synergy, and cross-fertilization to

maximize similarities. Global integration and local responsiveness have become

known as an integration-responsiveness framework to assist managers in

developing a deeper understanding of the trade-offs between global integration

and local responsiveness.

 At first, Hollywood applied an export strategy used to focus on its domestic

operations primarily. However, it does intend to expand globally and export some

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 Hollywood case study

products to take advantage of international opportunities. Initially, they

implemented a global strategy that showed the same actual films abroad, but

now they sometimes make different films, so the government has no control over

modified scenes in the movie.

 Hollywood only made movies and shows that fulfilled its local business's needs

meant American western culture. Still, as this industry started to expand, it began

to adopt Multi domestic strategy. A multi-domestic plan customizes products or

processes to the specific conditions in each country.

3. Given the economics of the now global movie industry, what are the strategic

implications for Hollywood studios? What are some opportunities, and what are

some threats? How should Hollywood movie studies take advantage of these

opportunities while mitigating the threats?

Mainly due to the collapse of DVDs and Blu-ray sales, Hollywood could not

produce movies with high budgets without using foreign revenues. By 2000, the

sale of foreign tickets to film in Hollywood was so high that it was almost 50% of

the worldwide total, and by 2014, they made up to two-thirds, with some of the

movies crossing 80% of total receipts earned by the box office. Some of the

opportunities are that the industry needs to make movies become blockbusters

internationally and casting foreign actors in leading roles and adapting scripts to

appeal to worldwide audiences are other opportunities. On the other hand, some

of the threats are content editing by the government before its official screening,

and another threat is low-cost foreign competition.

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 Hollywood case study

4. When commenting on the disappointing performance of The Great Wall, movie

executives continue to highlight the huge market opportunities in China and

emphasize that they will soon find the right formula to make movies that are

attractive to both American and Chinese audiences alike. Do you agree with this

assessment? Why or why not?

 The tastes and preferences regarding movies are very different in America

compared to China. Suppose Hollywood wants to take advantage of the massive

market in China. In that case, they need to improve the quality of their work by

studying more about the audience to create movies that are blockbuster hits

globally.

o Assuming that movie studies will be able to create breakthrough hits that

are attractive for both Eastern and Western audiences, what type of global

strategy would that entail? What are some benefits of this type of global

positioning? What are some of its risks? Why is this type of global

positioning so hard to achieve?

 The type of strategy they are following is the global standardization

strategy. The strategy refers to using standardized marketing

messaging and campaigns across markets, countries, and cultures.

A few benefits from this are Hollywood will make more money,

diverse labor, and low-cost labor. Global standardization risks no

local customers, wage increases, and currency rates.

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 Hollywood case study

 It is hard to achieve global standardization because of Pricing,

Policies and Regulation, Communication, Large structures, and

Currency exchange rates.

o What can movie producers do to ensure that future Chinese-American co-

productions are more successful? Explain.

 Marvel Movie producers have done an outstanding job with their

latest movies, such as Shang-Chi, The Legend of The Ten Rings,

and ETERNALS, by incorporating cross-culture and representing

China to give Hollywood its first Asian superhero. Shang-Chi and

Eternals both crossed 400 million estimated by the global box

office.

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 Hollywood case study

Reference

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