Weakness Analysis Lionsgate has a sustainable competitive advantage problem. Their strategy is to develop low-budget films in niche markets such as: horrors and international films (in Africa especially), through international partners and joint ventures. Lionsgate believes they generate a competitive advantage in these specific industry segments because of their history and know-how; the problem here is it’s not sustainable. It’s valuable and rare to have huge market share in so many niche markets, but it’s not imitable, another entertainment developer could easily develop this strategy, such as Disney using their brand and resources to start penetrating the niche markets through joint ventures, partners and subsidiaries that could operate
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This amount of debt will limit Lionsgate ability to acquire new projects and ventures, because of the vast interest and principal payments needed to pay of these loans. The payments could cause profitability and cash flow issues which could lead to greater problems like not paying taxes or paying normal operating expenses. The debt also has certain restrictive covenants brought upon them which limits the growth of Lionsgate, for example, certain loans they’ve accrued, restricts which lines of business Lionsgate can enter due to the risk of being unsuccessful. This could lead to Lionsgate falling behind competitors who earn huge revenues in new business line concepts. Lionsgate is far less diversified than their competitors. They may have a vast array of television and films, but competitors have ownership of television networks that lead to more advertising revenues as well as stability, because Lionsgate must negotiate for their television productions to be on networks, while competitors produce shows exclusively for their networks (Disney’s ABC and 20th Century Fox, Fox network). Not to mention it limits the amount of television networks Lionsgate can go to, because their competitors will not …show more content…
The Lions gate has two major competitors, one is The Walt Disney Company, and the other one is Warner Brothers Entertainment Corporation. As shown in exhibit 1, both companies were founded in 1923, which have a much longer history than Lionsgate Entertainment Corporation. In 2014, Disney and Warner Brothers had revenues of 48.81 billion and 12.53 billion, respectively, while Lions Gate had only 2.63 billion in revenue. From 2013 to 2014, Disney had an increase in net income at about 18.2% and Warner brothers had an increase in net income at about 3.55%. Lions Gate, on the opposite, faced a tremendous loss in that period, its net income decreased 52.68%. Due to the development of eBooks, online games and other forms of entertainment, movie industry can, in some level, be replaced. The majority of Lions Gate's productions are R rated or PG 14A movies. Because of the nature of these movies, they can be banned in some countries. For example, due to the lack of a motion picture rating system, the Chinese government might not allow the release of certain Lionsgate movies. Also, for some religious reasons, the majority of Lionsgate's movies might not get released in some Middle East countries. In some Asian and African countries, because of the lack of copyright laws, piracy is very common; as a result, there are a
This amount of debt will limit Lionsgate ability to acquire new projects and ventures, because of the vast interest and principal payments needed to pay of these loans. The payments could cause profitability and cash flow issues which could lead to greater problems like not paying taxes or paying normal operating expenses. The debt also has certain restrictive covenants brought upon them which limits the growth of Lionsgate, for example, certain loans they’ve accrued, restricts which lines of business Lionsgate can enter due to the risk of being unsuccessful. This could lead to Lionsgate falling behind competitors who earn huge revenues in new business line concepts. Lionsgate is far less diversified than their competitors. They may have a vast array of television and films, but competitors have ownership of television networks that lead to more advertising revenues as well as stability, because Lionsgate must negotiate for their television productions to be on networks, while competitors produce shows exclusively for their networks (Disney’s ABC and 20th Century Fox, Fox network). Not to mention it limits the amount of television networks Lionsgate can go to, because their competitors will not …show more content…
The Lions gate has two major competitors, one is The Walt Disney Company, and the other one is Warner Brothers Entertainment Corporation. As shown in exhibit 1, both companies were founded in 1923, which have a much longer history than Lionsgate Entertainment Corporation. In 2014, Disney and Warner Brothers had revenues of 48.81 billion and 12.53 billion, respectively, while Lions Gate had only 2.63 billion in revenue. From 2013 to 2014, Disney had an increase in net income at about 18.2% and Warner brothers had an increase in net income at about 3.55%. Lions Gate, on the opposite, faced a tremendous loss in that period, its net income decreased 52.68%. Due to the development of eBooks, online games and other forms of entertainment, movie industry can, in some level, be replaced. The majority of Lions Gate's productions are R rated or PG 14A movies. Because of the nature of these movies, they can be banned in some countries. For example, due to the lack of a motion picture rating system, the Chinese government might not allow the release of certain Lionsgate movies. Also, for some religious reasons, the majority of Lionsgate's movies might not get released in some Middle East countries. In some Asian and African countries, because of the lack of copyright laws, piracy is very common; as a result, there are a