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EMM5604 | Industrial Marketing Management

CASE STUDY REPORT

Vista Entertainment Solutions Ltd – Market Entry Strategies For India

Group 5 :

1. Mohd Faizal Azrai bin Ab Aziz GS43608

2. Hazalifah binti Zainal Abidin GS40673

3. Nur Ain Azman GS44230

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Table of Content Page

1. Introduction 3

1.1. Company Profile (Vista) 3

1.2. Company Profile (Bigtree) 3

2. Case Summary 4

3. Current Situation 5

4. Deriving Key Issue From Case Study

4.1. Success Factor

5. Vista Segmentation, Targeting and Positioning

6. SWOT Analysis

7. Recommendation

8. Conclusion

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1. Introduction

1.1. Company Profile (Vista)

Vista is a joint venture between a management company owned by

some of the key staff, and Village Sky City Cinemas. The company

employs 25 staff, and its software is presently sold in 23 countries.

Vista Entertainment Solutions develops and supplies specialized

software to the entertainment industry, especially to cinemas, both

multiplexes and single cinemas. This software enables cinemas to run

virtually all their different business activities, from selling tickets, to

paying royalties, to the sale of refreshments —from one suite of

software. The company has been completely developed in New

Zealand, starting from 1995, but is constantly evolving to meet changing

demands, and the requirements of different customers.

Vista received its invitation to Bollywood after being spotted on the

internet by Bigtree in 2000. India is known for its Bollywood film market

and their export of cinema software. But a demand for web ticketing

systems gave Vista a way in. Its cinema management system handles

ticketing, film scheduling and distribution, royalty calculations and staff

rostering.

1.2. Company Profile (Bigtree)

Bigtree Entertainment Pvt. Ltd. is India's premiere comprehensive

ticketing, information and analysis solutions provider. The Mumbai

headquartered company founded in 1999 with funds from Chase Capital

Partners JP Morgan, is planning to use the money to expand into tier II

and tier III markets to grow the business beyond movie ticketing.

Network 18 invested in Bigtree in 2007.

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It provides cinemas and event organizers as well as the consumers a

complete range of solution through call centers, Internet ticketing, kiosk

and a mobile ticketing platform. Today Bigtree's tentacles extend across

the entire matrix of the motion picture distribution and exhibition. With a

dedicated team of over 300 people, Bigtree is poised for growth in each

sphere of its operations. Bigtree has also significantly attracted

renowned investors like the TV18 group.

2. Case Summary

The company first entered the Indian market in 2000. The first sale came

about through connections of Village Sky City Cinemas. But parallel to that

,a new Indian company approached Vista through the company’s website.

The Indian company was owned by three young MBA graduates, seeking to

develop their own business, and who believed that automated ticketing

systems for cinemas would be a future growth area. That company became

Vista’s agents in India, and remains so today.

At that time India had some 11,000 cinemas, mostly family owned, and

almost entirely run on a manual basis. However multiplexes were just

starting to develop and they needed more automated systems. Although the

company’s actual entry into the Indian market was to some extent

opportunistic, Vista had already identified it as a huge potential market.

India is essentially the second largest cinema market in the world, after the

USA. But until that time, Vista had only been selling its product into several

much smaller markets. So taking on the Indian market was a huge step

upward. For the company it was a process of discovery, one step at a time.

However Vista has been able to turn this complexity to its advantage by

being ready to adapt its software to the requirements of particular users in

meeting these bureaucratic requirements.

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3. Current Situation (Industry Analysis)

Doing business in India has never been easy. New Zealand exporters have

traditionally faced a bewildering bureaucracy and tariffs for their goods that

would take the shine off any profit forecast.

While everyone’s attention has been focused on China – the world’s fastest

growing economy – India has been having a furious growth spurt of its own.

GDP is growing at over eight percent a year; last year it was 8.4 percent

with the economy growing to US$650 billion. Salaries are increasing by 15

percent a year and there is a rapidly growing middle class of 250 million

people with money to spend.

Taking on the Indian market was a huge step upward for Vista. All the

cinemas were very manual back in 2000. Vista’s software was the first fully

automated ticketing system in India at that time.

The multiplex cinemas were started to growing due to the development of

digital movie format. It is a potential market for both Vista and Bigtree as in

2006, their technology in presents in 90% of the multiplexes cinema in India.

There were about 80 multiplexes cinemas in India and this number was

forecast to grow to 350 to 500 within the following years.

Today any film released in India generates 30% of its revenue from

multiplexes. This is expected to increase to 75% by 2010. According to a

study, in 2012 the revenues grow from by 21% generating close to US $1.9

billion. It mainly came from cinema ticket sales (83%), followed by cable and

satellites rights (11%) and ancillary revenues (5%) while 8% of theoretical

revenues come from abroad.

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It is a good business opportunity for both Vista and Bigtree providing that

they could maintain this good relationship and further enhanced their

products to suit the industrial needs.

4. Deriving Key Issues From Case Study

4.1. Success Factors

According to Vista’s CEO, they have to agree to some of the unusual

things to do included setting up ticket numbering system to help the

government collect its entertainment tax.

Vista has proven to be rather an innovative company. They are capable

of adjusting their products or services according to the requirements and

customer needs. Even though they have faced a lot of hurdles in running

and starting business in India, but these obstacles are ease by their

excellent local agent, Bigtree. The appointment of Bigtree as their agent

in India perhaps the most critical business decision making that has

been made by them.

Vista says it could not imagine how they could have come to their

prominent position in the Indian market without their agent . They could

not have bridged the huge gulf of understanding with respect to the

intricacies of the market, cultural sensitivities, the numerous regulatory

hurdles, or been able to deal with the associated red tape . The agent

company has worked hard in lobbying the Federal and State authorities

on relevant matters. Accordingly, there would have been major cost

issues in trying to deal with such matters with seconded or visiting New

Zealand-based staff.

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Bigtree also plays a big part in creating the ecosystem of the cinema

industry in India. The ecosystem didn’t exist in 1999. None of the mobile

companies offered the kind of reach they do now. There was no single

number policy, no credit card, debit card and net banking penetration.

Broadband connectivity was very poor. None of the cinemas had

ticketing software. So they had to do everything in offline mode. They

did what the market required them to do. Rather than riding on some

illusionary ecosystem, Bigtree started building it. They started installing

the software at cinemas.

5. Segmentation Targeting Positioning of Vista in India

5.1. Segmentation

The segmentation for business to business market could be done

through various ways. In this case, Vista segmented the market by type

of cinema and product application. Their major sales in Indian cinema

industry are in the multiplexes cinema related product with 95% of these

cinemas installed with their technology.

5.2. Targeting

After doing the market segmentation the firm has to evaluate the

segment of their market potential. Then the company has to decide

which and how many segments to serve and how to serve them. Based

on this case study, at that time Vista was focusing on the market

specialization. They innovate their products special for the requirement

of this market.

5.3. Positioning

With the prominent market share in the multiplexes cinema (95%), Vista at that

time can be considered as the market leader for cinema management software

provider in Indian market.

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6. SWOT Analysis

Based upon the detailed analysis of Vista’s key issues Strengths-

Weaknesses-Opportunities and Threats (SWOT) analysis will be carried out

and serve as a comprehensive summary of the above discussion as well as

the starting point for the development of possible solutions and their

evaluation.

A SWOT analysis represents a tool that companies use in order to

understand what they do well and where they could improve. Furthermore, it

enables them to get insights into the market. Strengths and weaknesses

portray the internal perspective of a company and can be controlled and

influenced. Opportunities and threats on the other hand are concerned with

the market and represent factors that cannot be controlled. However, a

company like Vista needs to be aware of these factors in order to be able to

cope with possible market changes in the future. The table below shows the

Vista SWOT analysis.

STRENGTHS WEAKNESSES

Strong support from Bigtree.

Software customized to customers’

need.

Well recognized brand. Strong

position in cinema industry (present

90% in multiplexes cinema in India).

Experienced running business in a

tough market/ nation.

Too dependent on Bigtree capabilities

in India.

OPPORTUNITY THREATS

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To expand sales for other modules.

350 to 500 multiplexes in the

following 4 years.

New software for single screen

cinema. ( 12000 single screen

cinemas in India)

Expand into other areas of

entertainment industry.

Some of multiplex player may have

built their own ticketing system

platform.

Increasing competition from other

companies.

Table 6.1 : SWOT Analysis of Vista

7. Recommendation

The discussion of the key issues that Vista currently faces as well as the

SWOT analysis that was conducted based on those issues shows that in

order to achieve its ambitious goals and continue to be the major player in

the cinema industry, Vista must consider a few recommendation.

Considering they have successfully created a market demand for cinema

industry in India by providing a good product to meet the needs of the

customer, they should do the same to other large cinema industry market.

Perhaps, expanding business to other continent is their next main priority.

They should use their success in India as the breakthrough to enter other

market.

This could be done by appointing other agent or business partner that could

do the job as good as what Vista did in the Indian market. As for the current

Indian market, they should maintain their strong position by regularly

interact with their customer to build trust and royalty. Maintaining Vista and

Bigtree relationship is also another crucial step. The film and cinema

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industry in India is growing fast with more opportunities to come. They

should continue their product innovation in line with the market change.

For Bigtree, apart from become agent of Vista and as a value added seller

of Vista’s product, they must use their strength and experience in the Indian

cinema industry to increase their revenue by strengthen their business

activities. The multiplex market is now being fragmented by other players

like Fame cinemas, Cinemax and PVR. For Bigtree, it seems is playing a

small part in the food chain of ‘entertainment industry’, as some of these

multiplex players have built their own ticketing system.

In short, Bigtree needs to expand into businesses beyond movies and get

into events. This is surely big news for event/ticketing industry, which has

mostly been untouched by the technology investment community.

8. Conclusion

Key lessons learnt by Vista in the Indian market focus on the importance of

choosing an excellent agent, and of being flexible in relation to meeting the

particular needs of the market, recognizing that there are many differences

in India that foreign companies need to adjust to.