Vageesh Kumar 212038 Akash Nijhawan 202002 Anwer Rahi 202009 Nitish Sharma --202024 Rakesh Leading Movie rental store operating in Rural and Secondary markets Company had over 2000 retail stores located in 50 locations. The firms quarterly revenue exceed $200 million in 2004 The company was started by cofounder Joe Malugan and his attorney in 1985 As per the case Movie gallery were able to sustain its growth was only because of their prime focus of working in Rural and secondary cities. The Market was growing at a constant rate of 6.1 % for movie rentals. But this is overall data and there was a larger scope in suburban and rural market and hence Movie Gallery grew at 16.3% out-pacing the market growth by almost 3 times. The delay in arrival of destructive technologies (VoD, High Speed Internet, Mobile TV etc) in the rural and suburban areas also made them sustain their growth.
If there is any challenge which would slow down the business of Movie gallery it can account to the destructive technology spreading to rural and suburban areas. Also Movie gallery has not invested their time in innovating into new ventures of entertainment like pay per view etc. which can easily take over the business of movie gallery soon.
If at all movie gallery enters in the metro markets they would face a huge competition from industry leaders like Blockbuster and Hollywood video who have a number of stores and experience in dealing with the urban customers. The huge challenge of raising capital for operations would be incurred as the working capital is more for metro than in rural cities. The technology is the biggest threat in metro where people often go online and watch movies on demand and multi theaters complexes, things like Video on Demand and Pay Per View, Multiplexes etc. are already popular with customers there. At first they went public in the year 1994 to manage and raise capital for any future changes and expansion of the chain From the year 1996 and late 1998 the company slowed it pace of growth and devoted time towards developing a sound system, building infrastructure, improving balance sheet and solidifying its penetration and presence in the rural market. The company planned to open 100 stores per year starting 1999 Another feather in the cap was the acquisition of blow out entertainment stores . Since their major market share was present in rural and secondary market they had sufficient surplus time to train, research with employees and make them a better sales person. Surely as a group we are optimistic about the growth of movie gallery, provided the Senior management at the company starts innovating with the products offered by them. They have not ventured out in going online stores and offering online streams of the movies which could help increase their business. The concept of movie rental were made available to the rural and secondary market by movie gallery as motioned in the case, the company is confident enough in the early 20 th century that they would make a lot of profits as the technology and concept of multiplexes would take time to trickle down to the secondary markets. Which is true in nature. Plus their vision and mission are in line with what they want to be best the dominant entertainment source
We jointly have an opinion that future is not good for Movie Gallery as they are not innovating to sustain their growth. The position of Movie Gallery was strong during the time mentioned in the case study. But they stood in front of the most cruel competitor, the Destructive Technology, which spares no existing businesses. We have seen the Audio Cassettes washing out Records and the being washed out themselves by CDs and Digital Audio. Similarly DVDs were at a great risk by the latest technologies like Video on Demand, Internet Video, Pay Per View etc. Movie Gallery filed for bank bankruptcy protection under the U.S. Bankruptcy Code in 2007-08. Went into losses due to decreased revenue because of alternative sources of entertainment and movie viewing.