Everest Group

Case study analysis

Team : Forty Two

Members:
• R Kathiravan
• S Sharath Kumar
 Executive Summary
• Problem Statement:
Calibrated expansion into Indian market, with the goal of breaking even in three years.

• Targeted Cities
- Surat, Nagpur, Mysore and Indore; we have eliminated tier-1 cities as brands like PVR and Inox have a strong footprint in these cities.

• Objectives
• Healthy sales in the first year, more than doubling by year three.
• Excellent revenues from concessions.
• Careful management of internal finances to control costs.
• Modest by stable profit margin by year two.
Market Analysis
• Market segmentation based on growth of disposable income.
• Tier 1 cities
• Developed cities with high disposable income eg: Metros like Mumbai, Delhi, Chennai, Kolkata and Bangalore.
• Pros : High population density, higher spending power, infrastructure support
• Cons : Competition from existing players, Higher investment cost, regulations such as price caps, permits etc.

• Tier 2 cities
• Developing cities with increasing disposable income with potential for investment. Eg: Surat, Indore, Mysore, Nagpur.
• Pros : Lower cost of living with high spending power, government support for investments, reduced regulations.
• Cons : Infrastructural support, accessibility.

• Tier 3 cities
• Cities with untapped potential with comparatively low disposable income. Eg: Salem, Ranchi, Shillong.
• Pros : Untapped market, lower cost of investment.
• Cons : Lower potential for profits.
 Market Analysis
• Competition and buying pattern
• Competitions from movie theatres, restaurants, video streaming services.
• Willingness to spend premium amount for a holistic entertainment experience.

• Target Market segment strategy

• Higher Disposable Income
• Better growth opportunity
• Reduced government regulations for construction and permits
• Absence of Ticket Price Caps
• Less Competition
• Access to distributors for procuring rights to latest movies
 Strategy and Implementation
Value proposition –
Identifying the
Deciding Deciding the Affordable
target markets –
Tier 2 Cities
approach - Mall format - Multiplex entertainment
ecosystem

Implementation :

• Lease a place for multiplex in an upcoming mall in tier

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