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The Cinema complex for everyone to enjoy
Title:
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Report outlining the Innovation effort of the
Entertainment Palace
through “Cinnovation 2007-2010”
Prepared By: Entertainment Palace Strategic Management
1) Erica Perozzi Managing Director
2) Colin O’Driscoll Director of Operations
3) Brian Hughes Director of Development and Innovation
Prepared For: The Board of Directors of PHOD Developments
Date: 3rd April 2008
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TABLE OF CONTENTS Title Page Page 4
Executive Summary Page 6
Introduction Page 7
Market Analysis Page 9
Strategic Objectives and Indicators Page15
Innovation Plan Page18
Financial Statements Page 22
Employees and Skills Page 23
Problems and Solutions Page 26
Project Feasibility Page 31
Major Projects
----Construction works and business exp Page 36
----Pricing plan Page 40
6 Months forward Page 44
Conclusions Page 46
Recommendations Page 50
Appendices Page 51
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EXECUTIVE SUMMARY
In October 2007, PHOD Developments acquired East Cork Cinema World, located at
Fota Business Park Co. Cork.
A strategically-aligned innovation plan was devised, which would see the original
cinema undergo refurbishment and expansion to become the “Entertainment Palace”.
The plan, “Cinnovation 2007-2010”, included the redevelopment of the site into a centre
of excellence for the entertainment industry.
Management aimed to be profitable and attain market leadership within 3 years.
A focus was placed on cost minimisation by the management team.
The internal organisation places a strong focus on: high quality but low cost; the highest
standards in customer service; using best HR practices at all times and enhancing the
skills and working experience of employees.
The cinema began the expansion project which consisted of having 13 screens and 5
multifunctional rooms with digital projection technology, buyout of the premises,
instalment of franchises and the addition of a retail unit at the rear of the building.
Facilities were put in place to stage conferences and seminars in the screens to utilise
available capacity during off-peak times.
The company’s I.T. system has been upgraded to enable customers to reserve seats
online; then enter screens using a swipe card, as opposed to a paper ticket.
The cinema began a pricing plan which consisted of installing the above mentioned
swipe card and online booking systems and providing competitive prices for customers.
Six months after the commencement of the plan, a number of difficulties were
encountered, which led to the reassessment of some priorities and objectives.
Some of the projects earmarked in the “Cinnovation Plan”, such as the insertion of a bar/
lounge area, were stopped as they were deemed unworkable or conflicting with the
company’s strategic objectives.
Several recommendations were made to the PHOD Board. These included ensuring
adequate finance to complete the innovation plan, implementing all remaining active
projects and focusing on the continued expansion of the business model.
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INTRODUCTION
"Never innovate to compete, innovate to change the rules of the game." -- David O. Adeife1
Owner, Aenon Technologies Limited 2
From the inception of any company, or company restructuring effort, strategy must be built
around the company’s innovation efforts. Developing new ways of doing things, at the very
least, will ensure change. Whether that change is positive or negative will largely depend on
the risk involved and the extent to which the ideals behind it drive the company.
As such, the strategy for improving this company is centred on going places competitors
would consider fantasy. The belief must be, unlike that of competitors, that customer volume
is not based on local populations, but on the ability to bring other populations to us. As a
result, a key focus of the business, and the insistence that participating franchises buy into it,
is that prices should be an attraction for customers, not a burden. Also, the ability to allow
customers the freedom to choose a high price experience, or a budget level experience, is
imperative.
The following report outlines how the Cinnovation Plan 2007-2010 came about, its
initiatives; and its effect so far on changing ‘…the rules of the game...’
1 http://www.innovationtools.com/Quotes/Quotes.asp 2 http://www.linkedin.com/pub/4/122/700
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Press Release (3/10/2007, 12.30pm): At 12 noon today, Wednesday 3rd of October 2007, PHOD Developments completed a 100% buyout of The East Cork Cinema World. Effective immediately three company directors; Colin O’Driscoll, Brian Hughes and Erica Perrozzi will take up the roles of Director of Operations, Director of Development & Innovation and Managing Director respectively. They have guaranteed no staff will be let go as a result of their takeover, and hope to create at least 20 new jobs over the next 2 years. “We see this acquisition as a great opportunity to provide a completely new cinematic experience to initially the people of Cork, and eventually to the people of Ireland. The Irish are already considered the world leaders in many industries, and now its time to add entertainment to that list. Yes, our ideas are most definitely ambitious, they could go wrong, but they could also redefine the term cinema. Anyway, whoever succeeded by being cautious? So the message to the people of Cork - prepare for the Entertainment Revolution.” Brian Hughes, Director of Development & Innovation
BENCHMARK The organisation which is most like our organisation is the Odeon/UCI cinema Chain which is located all over Europe and most importantly in Dublin Ireland. The homepage address for this cinema is: http://www.uci.ie/ Innovation Effort: The UCI cinema chain was formed as a partnership of paramount pictures and universal studios in an effort to build cinemas around the world. In 1985 they opened their first multiplex cinema in the UK. One innovation effort appears in 2004 when UCI was sold to Terra Firma Capital Partners who also bought Odeon cinemas. The majority of UCI cinemas then took the Odeon name except for cinemas in places such as Ireland or Italy who kept the UCI name. The Ireland branch is in the future planning on taking the Odeon name in order to rebrand itself for the ever changing Irish consumer. They were also the first company to introduce digital cinema projection.3. Their Products: The UCI cinemas provide facilities for consumers to; watch new release films, buy snacks and drinks, organise conferences, organise private screenings of new releases, bulk buy tickets, buy gift vouchers and hire venues for unique events such as sporting events or music concerts4. Their Competitors:
1. Cineworld 4. Omniplex cinemas 2. Irish Multiplex cinemas 5. Savoy cinemas 3. Ormonde cinemas 6. Vue cinemas
3 http://en.wikipedia.org/wiki/UCI_Cinema 4 http://www.uci.ie/fanatic/b2b/
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MARKET ANALYSIS Cinema location and population figures:
Total Population 10 minute drivetime 2002 100,000
30 minute drivetime 2002 250,000
60 minute drivetime 2002 405,000
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SWOT Statements (Strengths, Weaknesses, Opportunities & Threats) Group Question Title
S What are your organisations advantages? Location, access to market & parking, exceptional staff
What are your core competencies? Customer service, cinematic/entertainment excellence
Where are you making the most contribution?
Pioneering new techniques and related business ideas
What are you doing well? Marketing, R&D, efficiency, cost minimisation
W What areas are you avoiding? Confectionery sales
Where do you lack resources? Customer access - public/private transport network upgrade
What are you doing poorly? Cost minimisation and controlling overheads needs further improvement
Where are you lacking contribution? HR - project in place to revamp procedures and structure
What needs improvement? Queuing times, quality checks - customer service & breakdowns
O Any trends in similar organisations? Strategic alliances and franchises
New technologies? Digital films etc; expansion into conference centre, bar etc.
New needs of customers (internal or external)?
To develop e-queuing and automated ticket sales
T Obstacles to overcome? Develop new business ideas; out-perform competitors
Aggressive customers (internal or external)? Overcome by quality checks
Competing organisations? Cinemas, Bars/restaurants, Internet, Entertainment sector
Negative economic conditions? Slight downturn predicted, countered by pricing strategy
Government regulation? Censorship (IFCO)
Changing business climate? "Staying in the new going out"; the need for digital products
Vulnerabilities? Disposable income may fall, future of business park at our location
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The Entertainment Palace can rely on a number of crucial strengths. Its location, in a new
and expanding business park with free customer parking on the outskirts of Cork City gives
access to a market of over 350,000 people5. Highly skilled, efficient and reliable staff are the
medium through which goals are achieved i.e. providing the highest levels of attention to
details of their work, with a focus on customer service. A further strength is the assistance,
experience and knowledge provided to the cinema by the parent company, PHOD
Developments. The Entertainment Palace prides itself on cost minimisation, effective
marketing and innovative research and development.
The business continually endeavours to identify and overcome its weaknesses. Cinnovation
“2007-2010” recognises that operating a confectionery sales outlet is a drain on the
company’s resources. The lack of adequate public transport links to the area prohibits many
customers from returning on a regular basis. A problem of reduced morale has become
evident in a number of employees of late. It is thought some personnel may be feeling
unsettled by the recent takeover and continuing expansion and are worried about the future of
their employment.
The Entertainment Palace currently has numerous opportunities to take advantage of
developments in the sector. Cinnovation 2007-2010 recognises the continuing possibility of
using collaboration with partners and franchises to expand the business. The plan also
provides for the introduction of digital film technology; and new systems to allow customers
with both Laser and credit cards to purchase tickets online.
Current threats include competing cinemas and other rival businesses in the entertainment
sector. Socio-economic threats may also influence future performance of the Entertainment
Palace. Current social trends indicate that an increasing number of consumers now prefer to
socialise and relax at home – “staying in is the new going out”. Recent economic trends
point to a possible downturn in the years to come. A fall in disposable income is likely to
cause a drop in demand for services such as the Entertainment Palace.
5 http://www.corkcity.ie/aboutcork/
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Markets which will be served:
The main market which will be served is the entertainment market which includes: Cinemas,
restaurants, bars, music events, sporting events etc. The cinema will serve consumer markets
of all ages and gender. The wide variety of amenities available in the Entertainment Palace
means that all needs are catered for and there will be something for everyone.
Competitors for market share:
1. Bars e.g. Mardyke Entertainment Complex
2. Family Restaurants e.g. Captain America’s
3. Concert venues e.g. Cork Opera House, “Live at the Marquee”
4. DVD stores e.g. Chartbusters, Xtra Vision, HMV, Zavvi
5. Internet websites e.g. Clasicmovies.org, Amazon, Play.com
Mahon Point Omniplex: http://www.omniplex.ie/cinema/omniplex/cork.htm Strengths Now well established, quality service, state of the art equipment
Weaknesses Lack of diversification, may struggle if disposable income falls
Opportunities Build on the advantages provided by location – access to market
Threats New market entrants, web, trends – “staying in the new going out”
Innovation First stadium-seat cinema in Cork, alliance with Haagen Dazs
Mardyke Entertainment Complex: http://www.mardyke.com Strengths Wide range of services, niche market large % disposable income
Weaknesses Not reaching full potential need for marketing etc.
Opportunities Expansion – aggressive marketing aimed at student population
Threats Bars/clubs tapping into available market
Innovation Karaoke kiosks, change to over 21’s market, Club Isobar
Captain America’s: http://www.captainamericas.com/start.htm Strengths Brand recognition, niche market, novelty product/service
Weaknesses Missing out on market – price sensitive consumers
Opportunities Expand and target new markets, Eg: students
Threats New entrants encroaching on market share
Innovation Novelty experience for consumers
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Cork Opera House http://www.corkoperahouse.ie Strengths Well established and recognised, brand loyalty
Weaknesses Small in size, in need of refurbishment, location/access (parking)
Opportunities Grow brand, attract new and better acts to ensure continuing loyalty
Threats New Docklands concert venue, Live at the Marquee
Innovation Wide variety – moved from just theatre to music, comedy etc.
Chartbusters http://www.chartbusters.ie Strengths Brand size and loyalty; price and variety of products
Weaknesses Process by which customers rent DVD’s etc., frequent queues etc.
Opportunities Online services and automation of services
Threats Expansion by competitors
Innovation Alliance with Tan.ie, drinks and snacks now available in-store
Classicmovies.org http://www.classicmovies.org Strengths Popular amongst target market – niche market
Weaknesses Difficulty in expansion – no appeal from outside markets
Opportunities Improve recognition and awareness of services
Threats Increasing popularity of DVD, regulation, new market entrants
Innovation Pioneering of on-line classic movie availability
Stakeholder requirements:
Group Title Responsible StatusOwners Improve cost structure Erica Perrozzi ☺ Owners Improve research and development system Sarah Watson ☺Owners Greater utilisation of assets Colin O'Driscoll ☺
Customers Improve quality of products and services Sarah Watson ☺Customers Reduce waiting times David Walsh ☺
Customers Reduce costs and provide incentives (i.e. Membership discounts)
Erica Perrozzi ☺
Customers Reduce disruptance during expansion Colin O'DriscollCustomers Collaborate with community transportation services Brian HughesSuppliers Set up a fast effective payment system Nicola Jones ☺Suppliers Ease of communication Niall Routledge ☺Suppliers Company loyalty Niall Routledge ☺
Employees Ensure health and safety standards at all times Grace Manning ☺Employees Opportunity for promotion Grace Manning ☺Employees Wages and benefit in kind incentives Grace Manning ☺Employees Employer motivation Grace Manning ☺Employees Democratic work environment Grace Manning ☺
Community Ensure environmental protection i.e cut down noise pollution during expansion
Colin O'Driscoll
Community Sponsership of sporting clubs, charities etc Erica Perrozzi ☺Government Follow employee acts Grace Manning ☺Government Follow health and safety regulations Grace Manning ☺Government Follow environmental protection regulations Colin O'Driscoll ☺Government Ensure payment of corporation and employee tax Emma Hanley ☺Franchises Ensure fair profit share rate Erica Perrozzi ☺Franchises Legal contracts Erica Perrozzi ☺
Requirements
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Following extensive market research the seven key stakeholders of the “Entertainment
Palace” were identified. These were: the owners, customers, suppliers, employees,
community, government and franchises. It was discovered that each of these stakeholders
placed different requirements on the organisation. Different employees were given the job to
investigate these requirements further and ensure that they were all catered for within the
Cinnovation 2007-2010.
Although all the stakeholder requirements were seen as being important there were three that
would become integral to Cinnovation 2007-2010. These were:
1. The customer requirements of reducing waiting times, reducing cost, providing
incentives and collaborating with community transportation services.
2. The employee requirements of increasing employee motivation, providing
opportunities for promotion and having competitive wage packages.
3. The community requirements of ensuring environmental protection through the use of
energy efficient practices.
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STRATEGIC OBJECTIVES AND PERFORMANCE INDICATORS Mission Statement: To develop an organisation that is founded on excellence, endeavour and market leadership.
Strategic Objectives Group Title Responsible Status
Environment Achieve market leadership in the cinema industry Erica Perrozzi ☺
Environment Endeavour to grow our business (customer base) by 10% every year for the next three years Erica Perrozzi ☺
Organisation Break even by year two and be profitable by year three Erica Perrozzi
Organisation Fully implement the Cinnovation 2007-2010 plan Brian Hughes
Organisation Improve dealer and supplier partnerships Niall Routledge
Quality Endeavour to provide high quality products and services to customers at all times Colin O'Driscoll ☺
Capacity Explore make vs buy opportunities Brian Hughes
Capacity Open up three new premises Brian Hughes
Responsiveness Reduce customer lead times David Walsh
Workforce Provide a healthier and safer work environment Grace Manning
Workforce Continue recruiting the best staff available Grace Manning ☺
Information Carry out continious research in cinema technology Brian Hughes ☺
Cost Improve cost structure Erica Perrozzi Cost Source cheaper goods with the same level of quality we already have Niall Routledge ☺
Alliance Obtain franchises and ensure fair profit share rate and legal contracts Brian Hughes ☺
The table above outlines the objectives that management has set out for the Entertainment
Palace to achieve. The overall goal is for the organisation to be the best in its industry;
providing a top quality service to its customers, recruiting and retaining the best staff and
keeping costs at a minimum while maintaining the quality and integrity of its service. The
cinema holds 5% of the market share at the moment and aims to hold 25% in the future.
Initial costs for the expansion of Entertainment Palace will be quite substantial however,
estimated at €27m for 2008, but many of the investments are based upon future cost savings.
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Achieve Market leadership
Indicator: % Market share
Cinema Market share
Year 2007
Entertainment Palace 5%
Mahon point 30% Ballincollig 12% Gate cinema 15% Douglas 8% Blackpool 15% Others 15%Year 2008
Entertainment Palace 8%
Mahon point 29% Ballincollig 11% Gate cinema 15% Douglas 7% Blackpool 15% Others 15%Year 2009
Entertainment Palace 15%
Mahon point 27% Ballincollig 10% Gate cinema 14% Douglas 6% Blackpool 14% Others 14%Year 2010
Entertainment Palace 25%
Mahon point 24% Ballincollig 8% Gate cinema 13% Douglas 5% Blackpool 13% Others 12%
Niall Routeledge has overseen efforts to maintain and improve relations with suppliers.
Managers are also satisfied that customer service meets high standards, although they are still
pursuing even higher standards. The objectives relating to employees have also seen good
progress. However, signs of poor morale and motivation have been noticed amongst some
employees. The objectives to explore make versus buy opportunities; and the objective to
open three new premises have seen no progress to date. Management have deemed these to
be of lesser importance and have diverted resources elsewhere.
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Performance Indicators based on a 3 Year Period
Title Measured
by Unit Current Target Responsible StatusAchieve market leadership CSO % 5% 25% Erica Perrozzi Grow our business (customer base) Ticket sales % 20% 10% increase
per year Erica Perrozzi ☺ Provide high quality products and services to customers
Number of complaints vs
number of sales
% of satisfied customers 75% 95% Colin O'Driscoll ☺
Open three new premises n/a Num/
Premises 1 4 Brian Hughes Breakeven by year 2 and profitable by year 3
Breakeven analysis € (€13m) €10m David Walsh
Provide the best training for our staff
€ spent on training €/per worker nil €150 Grace Manning ☺
Provide good working conditions to ensure staff loyalty
Staff turnover % Turnover 30% Below 20% Grace Manning Fully implement the Cinovation plan 2007-2010 Plan objectives Year 2007 Finish by
2010 Brian Hughes Reduce customer lead times Time in que Minutes 4 2 David Walsh Continously fund and carry out research in cinema technology
R & D expenditure
€ invested/ year nil €250,000 Brian Hughes ☺
Improve cost structure n/a Ratio of cost to revenue €27m 5 Erica Perrozzi
The above table of indicators lists the current status and target status of the objectives from
the previous table.
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Cinnovation Plan 2007-2010 Vision Statement:
“We endeavour to create a complete cinematic and presentation experience through
continuing technological and process innovation.”
1) Renaming
East Cork Cinema World is to be rebranded as the “Entertainment Palace”.
2) Customer Flow
It is intended to operate a one-way system through the building. Customers will enter
through the Entrance hall, pass the franchises and ticket desks, enter the respective
screen, and exit through the film memorabilia retail unit, to ensure maximum potential
for customer spend while at the Entertainment Palace.
3) Building
Present:
East Cork Cinema Ltd. currently rents one unit in Fota Retail Park, Cork, and is
cramped for space. It contains 6 200-seat screens.
Planned:
The Entertainment Palace Ltd. will own one building in Fota Retail Park, and expand
the existing structure to suit its own needs of 18 screens.
4) Digital Cinema
Present:
East Cork Cinema Ltd. currently works off a film reel system for all its screens.
Planned:
The Entertainment Palace Ltd. will have all 18 screens digital-capable. Screens 1 and
2 will also be 3D-enabled. In addition, all screens will be fitted with a hearing loop
system for the hearing impaired.
5) Multifunctional
Present:
East Cork Cinema World currently shows only films.
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Planned:
The Entertainment Palace Ltd. will:
a. Have a whole floor devoted to its multi-function rooms. These five suites can
be used for parties, sports events, conferences, educational seminars/
presentations etc.
b. Screen 1 – the 600 seat screen, will be built with a stage so it can also function
as a theatre.
6) Franchises
Following discussions with franchise owners, the Entertainment Palace has negotiated
contracts with the following franchises to become long-term tenants:
a. Planet Hollywood6
A family restaurant filled with film memorabilia.
This famous restaurant up until now has had no franchises in Ireland for nearly
a decade. However, given the type of facility being created, this partner is a
must.
b. Juice Junction7
An Irish fresh juice and smoothie franchise to cater for the health-conscious
market.
c. Sweets from Heaven8
This franchise has not yet ventured outside the United States, but here it will
provide the missing element to the mix of confectionary stands in the Entrance
Hall.
d. Kernel’s9
Kernel’s has the largest range of creative popcorn products of any franchise.
e. Ben & Jerry’s10
Given the presence and unprecedented success of Haagen Daaz in Mahon
Point Omniplex, it was important to secure another ice-cream franchise for the
Entertainment Palace. 6 http://www.planethollywood.com/index_restaurants.htm 7 http://www.juicejunction.ie/ 8 http://www.sweetsfromheaven.com/ 9 http://www.kernelspopcorn.com/ 10 http://www.benjerry.ie/
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7) Tickets
Present:
East Cork Cinema Ltd. currently uses the traditional paper based ticket service.
Planned:
The Entertainment Palace Ltd. will introduce a swipe card system. This will involve
customers receiving a temporary swipe card as a ticket. When the ticket is purchased it
will act as though there is a credit for one film on the card. There will be one member of
staff at the door of each screen to swipe the card to take the credit off to ensure the ticket
cannot be used again. Having staff at the individual screen doors ensures that customers
are only entering the screen which they paid for.
For the first few months of the scheme there will be multiple floor staff encouraging
customers to sign up for permanent swipe cards. The benefits to the company should
include:
i. Increased customer loyalty as permanent cards will act as membership cards –
hence providing them with discounts.
ii. Reduced ticket costs as customers ‘bring their ticket with them’.
iii. Increased information with regard to customers, status (OAP, student etc.) likes
and dislikes, and so more appropriate marketing can be directed towards
individual customers.
iv. Having the card will also give you an account with the cinema. Typing in your
details on the website will allow you to view what discounts you have available to
you with both films and the franchises, what tickets you have purchased. This
account will also provide for the purchasing of tickets online.
v. There will also be points at the cinema for checking your account, which will
remove the need for ticket printout stations.
8) Human Resources
The changeover to new ownership is stressful to any small organisation, and hence
introducing new staff friendly measures immediately will help ease the transition.
Using his significant organisational experience, director Brian Hughes is to put together
a report detailing how this can be achieved to create the best possible working
environment for staff.*
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Note: An extract from the aforementioned report is contained under the ‘Skills’ section.
9) Bar Project
In order to keep customers within the Entertainment Palace after the feature film has
ended, a bar will be added as part of the retail unit.
10) Transport
As the Entertainment Palace is not within walking distance of any residential
developments, there will be three approaches taken to rectify this:
i. Lobby local and national governments to add a train stop at the Fota Retail Park.
This proposal will be submitted in conjunction with the other residents of the
retail park.
ii. Work with Bus Eireann to extend services past the Retail Park.
iii. Endeavour to forge links with private transport companies for the provision of
transport facilities with customers.
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FINANCIAL STATEMENTS & PROJECTIONS
2007
IncomeTicket Sales 4,356,000Advertising 7,260,000Confectionery 1,960,000
13,576,000
ExpenditureFilm Reels 9,000,000Utilities 500,000Tickets 17,000Wages & Salaries 399,760Insurance 150,000Security 50,000Tax 50,000Rent 600,000
10,766,760Profit/Loss
Gross Profit 2,809,240Corporation Tax @12.5% 351,155Net Profit 2,458,085
2008 2009 2010
IncomeTicket Sales 4,500,000 5,000,000 7,000,000 Advertising 7,300,000 8,500,000 10,000,000 Confectionery 2,000,000 1,000,000 -Rent from franchises + 10% of profits Planet Hollywood - 40,000 85,000
Sweets from Heaven - 30,000 70,000 Kernel's - 27,500 65,000 Ben & Jerry's - 25,000 55,000 Juice Bar - 20,000 45,000
Alternative Space use Conferences - 10,000 75,000 Education - 5,000 25,000 Parties - 5,000 35,000
13,800,000 14,662,500 17,455,000
ExpenditureDigital Auditorium Conversion 1,000,000 - -Digital Film Prints 5,500,000 2,000,000 2,000,000 Utilities 750,000 400,000 250,000 Tickets 20,000 20,000 5,000 Wages & Salaries 700,000 700,000 700,000 Insurance 300,000 300,000 300,000 Tax 200,000 200,000 200,000 Purchase of Building 1,500,000 - -Construction 15,000,000 - -Advertising & Market Research 1,000,000 750,000 750,000 Security 200,000 250,000 250,000 Renewable Energy Structures 1,000,000 1,500,000 1,000,000 Ticket Card Scheme 1,000,000 25,000 -
28,170,000 6,145,000 5,455,000
Profit/Loss Gross Profit -14,370,000 8,517,500 12,000,000Corporation Tax @12.5% 0 1,064,688 1,500,000Net Profit -14,370,000 7,452,813 10,500,000
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EMPLOYEES AND SKILLS The employees of the Entertainment Palace can be broken down into two areas for the
purposes of skill analysis. The cinema’s part-time staff consists entirely of second- and third-
level students, all of whom are floor assistants apart from the two part time supervisors.
There is a basic level of induction training provided to all floor assistants which includes till
operation; restocking guidelines; fire, health & safety procedures; clean up procedure and
start/end of day procedures.
Currently all full-time staff members are third level graduates, with many undertaking post-
graduate work in their own time. As such, all full-time employees already possess strong
communication and computer skills before joining the company. To complement this, and to
ensure that there is no confusion between staff members, all new full time employees receive
the same training as part time employees.
Staff are an integral element of the success of the “Cinnovation 2007-2010” plan, and as
such, need to be appropriately equipped to execute it with maximum effect. This requires a
fresh approach to staff training, a project to be overseen by Brian Hughes and implemented
by Grace Manning.
The following the summary from his report:
In order to implement our innovation plan, Cinnovation 2007-2010, the company needs to
make better use of existing employees, while at the same time, promoting a strong culture of
employee loyalty. This requires a three pronged approach, in order to cater for the varying
needs and types of individual that are present within our organisation.
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i) Team
Unless everybody within the organisation is working together toward the same goals,
then staff will only end up competing in or neglecting some areas of work, which can only
be to the detriment of the company going forward.
ii) Challenge
Everybody likes to feel they are using their talents in the best way possible, while also
trying to develop them on a consistent basis.
iii) Fun
If any of our employees feel that coming to work in a place called the Entertainment
Palace is boring or a chore, then we are not doing or job right.
With regard to how staff training is carried out, having two days a month (half the staff get
one day, the other half get the other, but constantly varying the group composition), devoted
to a training/social day incorporates all three of the above requirements. These days will
consist of a morning presentation/ workshop session off the premises, and in the afternoon an
activity outing. Potential topics/ activities include:
Training Socialising Customer Service Paintballing Event Service Bowling Price Determination Kayaking Business Models 3v3 sports leagues Entertainment Industry Stats Orienteering Entertainment Industry Changes
Treasure Hunts
One of the main features of such an approach is that it removes the entire hierarchy from the
organisation, while not damaging the authority of management because it is outside of the
workplace environment. As a result, teambuilding can occur in a natural way
These must be separate from the training that full-time staff need to receive in order to lead
the organisation. The table below outlines the current skills of full-time staff and those skills
that each individual must acquire.
Such courses should be run in a much more formal way, and can be done in-house if there
already exists individuals qualified to train others in the particular area. In addition, we (the
Directors) can impart our own experience by delivering presentations on some of the topics
for which training is required
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Staff Skills Table:
Skills Group Title Technical I.T.: Understanding the IT systems at work within the company
Technical Film Eq.: Film Equipment: Understanding how the new digital film equipmentworks
Personal Comm/Pres: Communication and presentation Management Project Mgt: Project Management Management Event Mgt: Event Managment Management Perf.: Monitoring Performance Safety Fire M.: Fire Marshall Safety First Aid Interpersonal Cust. Ser: Customer Service Relationship of employees to skills:
Experience: Qualification & Experience: None: Training Required:
Project Mgt Event Mgt Cust. Ser Comm/Pres Fire M. First Aid IT Film Eq. Perf. Managing Director Erica Perrozzi Director of Development & Innovation
Brian Hughes
Director of Operations Colin O’Driscoll Company Secretary Melissa Harte Secretary for Development & Innovation
Sarah Watson
Secretary for Operations Elaine Carey Cinema Manager - Fota David Walsh Cinema Assistant Manager –HRM
Grace Manning
Cinema Assistant Manager – SCM
Niall Routledge
Supervisor – New Departments
Mairead Clancy
Supervisor Derek Moore Supervisor Hazel Corbett Supervisor Paul Barrett Head of I.T. Nicola Jones I.T. Staff Member James Collins I.T. Staff Member Michael Wade Accountant Emma Hanley
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PROBLEMS AND SOLUTIONS
Prob no. Group Title Impact Risk Priority Responsible Status
1 ProactivePeople agitat ed by construct ion process
4 4 3 Colin O'Driscoll Under invest igation
2 ReactiveLoss of the potent ial to make money
4 3 4 Brian Hughes Under invest igation
3 ReactiveIdeas not tested properly i.e. Computer system
4 3 3 Brian Hughes Under invest igation
4 Proactive Location of cinema 3 2 2 Brian Hughes Under invest igation5 Reactive Problem of idle space 4 3 4 Brian Hughes Progress to project
6 ProactiveTechnology breakdowns and data loss
5 4 5 Nicola Jones Progress to project
7 ReactiveFinding businesses to form partnerships with
3 3 3 Brian HughesAwaiting managment
decision
8 Reactive Prices for t he customer 5 5 5 Erica Perrozzi Progress to project9 Reactive Keeping overheads down 4 4 4 Erica Perrozzi Progress to project10 Reactive Customer ques 3 4 4 Colin O'Driscoll Progress to project11 Reactive Disruption during films 2 3 2 David Walsh Under invest igation
12 ProactiveHigh cost of opening new businesses
2 4 3 Erica PerrozziAwaiting managment
decision
13 Reactive Loss of suppliers 4 2 3 Niall Routledge Under invest igation
14 ReactiveLoss of employee motivation
3 3 4 Grace Manning Progress to project
15 Proactive Booking errors 5 3 3 David Walsh Under invest igation16 Reactive Customers not paying 4 3 3 David Walsh Under invest igation
17 Reactive Loss of advert iser contracts 4 1 2 Erica Perrozzi Under invest igation
18 ReactiveLoss of cinema advertising campaigns
4 3 2 Erica Perrozzi Under invest igation
Problems
Note: Impact, risk, priority measured on a 1-5 scale where 5 is the highest and 1 is the lowest.
Whilst designing the “Cinnovation 2007-2010” innovation plan eighteen problems were
identified. These problems are detailed above and highlighted as being either proactive or
reactive. They were highlighted as such because some problems were foreseeable in the
future whilst others arose naturally during the innovation process. The impact, risk and
priority of each problem were recorded and a person within the organisation was assigned the
responsibility of investigating such problems as they arose. One of the proactive and five of
the reactive problems which had a high impact to the overall project were seen as having the
highest priority to the company at the moment and it was decided to turn each of these
problems into a separate project. All other problems were either awaiting management
decision or under investigation.
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25
Technology breakdowns and data loss, a proactive problem as it could be anticipated, was
seen as potentially having a huge impact on the overall workings of the company. It was seen
as this because one of the initiatives of the Cinnovation Plan 2007-2010 was to move all film
showings from projectors to digital; open an online ticket sales system and have a digital
ticket system in operation. Thus a breakdown would strongly inhibit the businesses
operations. There was also a high risk in it occurring as there were little data checks in
operation in the original cinema.
The problem of idle space, one of the reactive problems as it arose during the innovation
process, was also seen as having a high impact and risk of occurring as there were times in
the day when cinema screens would fail to fill (a problem many cinemas face). The problem
of prices for the customer was seen as having a high impact, risk and priority as it was seen as
being the deciding factor on increasing the cinemas customer base. Keeping overheads down
became a problem as it was found that the company’s costs would potentially rise in the
future if something wasn’t done to reduce them now11. Customer queues became a high
priority problem because customer satisfaction was seen to be reduced as the time spent in
queues increased. Loss of employee motivation also became a high priority problem as
motivation was seen as the factor that was causing a high staff turnover in the company.
Each of the problems were investigated by those who where placed responsible for them and
several solution ideas were formulated. These solutions came from customers, employees,
benchmark companies and new knowledge. The problems which progressed to project were
highly investigated and the solutions of these formed the base of the projects plans.
The solutions for problem 5 (problem of idle space) were primarily obtained from the
benchmark company UCI/Odeon cinemas. They also offer conferencing, education, sport and
private screening services to customers to solve their problem of idle space12. This was seen
as a highly innovative idea and was thus adopted by the company. The solutions for problem
6 (data loss) were formulated by Nicola Jones, head of IT. She felt that by carrying out
regular technology checks and replacements and creating hard copies of files the problem of
data loss could be solved.
11 See 2006 costs of the financial sheet. 12 http://www.odeon.co.uk/fanatic/b2b/
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26
Prob no.
Solution ideas Impact Risk Priority Responsible Status
1 Carry out construction during off peak times
5 1 4 Colin O'Driscoll Under investigation
2 Further expansion of the business 4 5 1 Brian Hughes Under investigation
3Collaborate with other companies and carry out research and development
4 3 3 Brian Hughes Under investigation
4Work with local authorities to get a transportation service set up and collaborate with taxi companies
4 3 5 Brian Hughes Under investigation
5Use idle space for other activit ies i.e. Conferences, education & private party screenings.
5 2 5 Brian Hughes Progress to project
6Have regular technology checks and replacemants and hard copies of files 4 2 5 Nicola Jones Progress to project
7 Promise potential companies opportunities for expansion
3 4 3 Brian Hughes Awaiting managment decision
8
Set up special offers such as: All in one packages; online booking, membership and loyalty discounts; t icket cards and special prices for groups.
5 3 5 Erica Perrozzi Progress to project
9
Power of one, source the best quality products at the lowest possible prices and t icket cards instead of printed tickets
4 3 5 Erica Perrozzi Progress to project
10Set up: Online ticket sales, phone in orders, collect ion points and more ticket selling points.
5 3 5 Colin O'Driscoll Progress to project
12 Get investors, issue shares and obtain debt equity 4 5 3 Erica Perrozzi Awaiting
managment decision
14
Create opportunities for promotion, wage benefit s, benefit in-kind, employee of the month, st aff nights out, health care packages and share ownership.
4 3 5 Grace Manning Progress to project
15Ensure that employees are properly trained and do regular technology checks
4 3 4 David Walsh Under investigation
16 Ensure that there is a good security system in operation
3 3 4 David Walsh Under investigation
Ideas
Note: Impact, risk, priority measured on a 1-5 scale where 5 is the highest and 1 is the lowest.
Erica Perrozzi extensively investigated problem 8 (prices for the consumer) through
consumer research. Consumers expressed interest in online booking discounts, all in one
packages, membership and loyalty discounts as well as a huge interest in the new innovation
of swipe cards. In relation to problem 9 (keeping overheads down) it was decided that the
best ways to cut costs would be to: source the best quality products at the lowest possible
prices, follow the power of one programme and eliminate the need for printed tickets by
installing swipe cards which could cut costs by a small fraction in the future. The solutions
for problem 10 (customer queues) were suggested to Colin O’Driscoll by several employees.
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27
They are the people who are constantly dealing with customers and organising the shop floor
and therefore had several valuable ideas such as online ticket sales, phone in orders,
collection points and more ticket selling points. The final problem which progressed to
project was problem 14 (Employee motivation). Brian Hughes investigated this and created a
policy document with regard to improving the welfare of all staff. These initiatives are to be
implemented by Grace Manning in conjunction with Brian Hughes.
The relationships chart below shows how each solution relates to/impacts on each problem:
Problems Use
idle
spac
e fo
r oth
er a
ctiv
ities
i.e.
Con
fere
nces
, edu
catio
n, p
rivat
e pa
rty
scre
enin
gs.
Have
regu
lar t
echn
olog
y ch
ecks
and
repl
acem
ents
and
har
d co
pies
of f
ileSe
t up
spec
ial o
ffers
such
as:
All i
n on
e pa
ckag
es; o
nlin
e bo
okin
g,
mem
bers
hip
and
loya
lty d
iscou
nts;
ticke
t car
ds a
nd sp
ecia
l pric
es fo
r gr
oups
.Po
wer
of o
ne, s
ourc
e ch
eap
supp
lies a
nd g
et th
e be
st q
uaili
ty p
rodu
cts
at th
e lo
wes
t pos
sible
pric
esSe
t up:
Onl
ine
ticke
t sal
es, p
hone
in o
rder
s, co
llect
ion
poin
ts a
nd m
ore
ticke
t sel
ling
poin
ts.
Crea
te o
ppor
tuni
ties f
or p
rom
otio
n, w
age
bene
fits,
bene
fit in
-kin
d,
empl
oyee
of t
he m
onth
, sta
ff ni
ghts
out
, hea
lth ca
re p
acka
ges a
nd sh
are
owne
rshi
p.
Problem of idle spaceTechnology breakdowns and data lossPrice for customerKeeping overheads downCustomer quesLoss of employee motivation
Strong relationshipModerate relationshipWeak relationshipNo relationship
RelationshipsSolutions
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28
Original project portfolio:
Projects
(a) "Construction works and business expansion"
(b) “Idle Capacity Utilisation”
(c) “Quality-Check System Re: Technology breakdown and Data loss” (d) “Pricing Plan”
(e) "Reduce and Control Overheads"
(f) “E-queuing Plan: Shorten customer lead times”
(g) “HR Revamp Re: Employee Motivation”
(h) "Screening sports events"
(i) "Reducing disruption during films"
(j) "Invest in Executive transport"
(k) “Develop Bar facilities on-site”
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29
PROJECT FEASIBILITY
Project Feasibility
Decision Criteria
Project Name SkillsGoal
Alignment Risk Impact Cost IMPLEMENT
(a) "Construction works and business expansion" 1 5 3 5 5
(b) “Idle Capacity Utilisation” 3 3 2 5 4 (c) “Quality-Check System Re: Technology breakdown and Data loss” 3 4 2 4 1 (d) “Pricing Plan” 4 4 3 5 3 (e) "Reduce and Control Overheads" 5 4 3 4 1
(f) “E-queuing Plan: Shorten customer lead times” 3 3 3 5 4
(g) “HR Revamp Re: Employee Motivation” 3 4 3 4 1
(h) "Screening sports events" 3 2 4 3 3 X (i) "Reducing disruption during films" 2 2 1 2 3 X
(j) "Invest in Executive transport" 2 2 4 2 4 X
(k) “Develop Bar facilities on-site” 2 3 4 3 3 X
Having revisited the original portfolio of projects, the management team made important
decisions as to the feasibility of the projects. The decisions were arrived at by examining the
company’s compatibility with the projects on a skills, goal alignment, risk, impact and cost
basis. Human Resource and financial factors were also discussed.
The construction project – a central aspect to “Cinnovation 2007-2010” – was cleared to be
implemented in full. The works were outsourced and put to tender; the contract being
awarded to John Sisk & Sons Ltd.13, Ireland’s largest general contractor. The cost of the
expansion, estimated at €15m was met by the initial investment of PHOD Developments.
The plan to utilise idle screens as conference venues was also approved, as it would provide
substantial revenue in off-peak times that would not otherwise materialise. Both the Quality-
check project and E-queuing plan were given the go ahead. The IT Department provided
management with a presentation outlining how they would implement those plans;
management were suitably impressed and had full trust in the IT function to allow the
projects to continue.
13 http://www.sisk.ie
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30
It was decided that a new pricing strategy to provide extra sales would be approved as it was
a sound idea and provide increased revenue in the short-medium term. Based on the advice
of Accountant Emma Hanley, the project to reduce and control overheads was implemented
in full – improving the cost structure is central to the business plan of the Entertainment
Palace. Management also eagerly approved the planned HR revamp which was aimed at
improving employee motivation. Recruiting and retaining the best quality staff are seen to be
of paramount importance for the Entertainment Palace as the business expands and grows.
Projects Title Responsible %Complete Status
Construction works and business expansion Brian Hughes 40% In progress
Idle Capacity Utilization Colin O'Driscoll 90% In Progress
Quality-Check System Re: Technology breakdown and Data loss
Nicola Jones 100% Completed
Pricing Plan Erica Perrozzi 30% In progress
Reduce and Control Overheads Emma Hanley 10% In progress
E-queuing Plan: Shorten customer lead times David Walsh 100% Completed
HR Revamp Re: Employee Motivation
Grace Manning 0% Waiting
Screening sports events Brian Hughes 0% Stopped
Reducing disruption during films David Walsh 0% Stopped
Invest in Executive transport Colin O'Driscoll 0% Stopped
Develop Bar facilities on-site Brian Hughes 0% Stopped
*Project progress as on January 2008*
It was decided that three of the proposed projects were not feasible. The plan to screen
sporting events was halted due to test marketing that revealed there was not sufficient
demand for such a service. Consumers were simply unwilling to pay an increased rate for a
service they can already enjoy in their local pub or in the comfort of their own homes. The
plan to increase security in order to reduce disruption during films was also dropped. The
consensus was that the impact of implementing this would be minimal. Part-time staff act as
stewards in screens (as well as carrying out their other duties) as it is, meaning that
management could not warrant approving the cost of the project. Similarly, the planned
purchase of a number of Limousines to provide executive transport to the site was not
implemented. It was felt that this would not provide the company with a substantial enough
boost to its image as it would only service a small number of clients. As a result,
management were not willing to approve the cost of the project.
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31
A further project involving the setting up of a fully licensed bar at the Entertainment Palace
was developed as management believed it would be a viable and successful option. This
creative idea would mean that our business is the only cinema complex outside of Dublin
with such facilities. As a result, this concept was eagerly pursued. However market research
later showed that opening a bar would have negative implications for the image of the
Entertainment Palace, as it would detract from the idea of it being a family experience.
Projects Title Cost Return Impact Risk Priority Start* Due
Construction works and business expansion
€10m 30% increase in profits per
year 5 3 5 Oct-07 Jul-08
Idle Capacity Utilization €100,000
2% increase in profits per
year 5 2 4 Oct-07 Mar-08
Quality-Check System Re: Technology breakdown and Data loss
€20,000 Smoother operations 4 2 4 Nov-07 Jan-08
Pricing Plan €200,000 10% increase in customer
base per year5 3 4 Oct-07 Nov-08
Reduce and Control Overheads
€30,000 5% increase in profits per
year 4 3 4 Oct-07 Dec-10
E-queuing Plan: Shorten customer lead times
€200,000
Customer satisfaction and demand
increase
5 3 4 Oct-07 Jan-08
HR Revamp Re: Employee Motivation
€10,000 Achieving a
staff turnover of below 20%
4 3 3 Mar-08 Sep-08
Screening sports events €50,000
3% increase in profits 3 4 2 Apr-08 Stopped
Reducing disruption during films
€50,000
Customer satisfaction and demand
increase
2 1 2 May-09 Stopped
Invest in Executive transport
€400,000 Customer satisfaction 2 4 1 Jul-09 Stopped
Develop Bar facilities on-site €500,000
Increased demand and satisfaction
3 4 4 Feb-08 Stopped
*Project Portfolio compiled January 2008
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32
Links between Projects and Requirements:
Projects Owne
r req
uire
men
ts
Cust
omer
requ
irem
ents
Supp
lier r
equi
rem
ents
Empl
oyee
requ
irem
ents
Com
mun
ity re
quire
men
ts
Gove
rnm
ent r
equi
rem
ents
Fran
chise
requ
irem
ents
Construction works and business expansionIdle Capacity UtilisationQuality-Check System Re: Technology breakdown and Data lossPricing PlanReduce and Control OverheadsE-queuing Plan: Shorten customer lead timesHR Revamp Re: Employee MotivationScreening sports eventsReducing disruption during filmsInvest in Executive transportDevelop Bar facilities on-site
Strong relationshipModerate relationshipWeak relationshipNo relationship
RequirementsRelationships
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33
Links between projects and objectives:
Projects Achi
eve
mar
ket l
eade
rshi
p in
the
cinem
a in
dust
ryGr
ow b
usin
ess b
y 10
% e
very
yea
r for
the
next
thre
e ye
ars
Brea
k ev
en b
y ye
ar tw
o an
d be
pro
fitab
le b
y ye
ar th
ree
Fully
impl
emen
t the
Cin
nova
tion
2007
-201
0 pl
anOp
en u
p th
ree
new
pre
mise
sRe
duce
cust
omer
lead
tim
esPr
ovid
e a
heal
thie
r and
safe
r wor
k en
viro
nmen
tOb
tain
fran
chise
s and
ens
ure
fair
prof
it sh
are
rate
and
Pr
ovid
e hi
gh q
ualit
y pr
oduc
ts a
nd se
rvice
s to
cust
omer
s
Construction works and business expansionIdle Capacity UtilisationQuality-Check System Re: Technology breakdown and Data lossPricing PlanReduce and Control OverheadsE-queuing Plan: Shorten customer lead timesHR Revamp Re: Employee MotivationScreening sports eventsReducing disruption during filmsInvest in Executive transportDevelop Bar facilities on-site
Strong relationshipModerate relationshipWeak relationshipNo relationship
ObjectivesRelationships
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34
MAJOR PROJECTS Construction works and business expansion projects
Title: Construction of the Entertainment Palace
Description: This project will involve the purchase of the current rented space, and the
subsequent redesigning and expansion of the entire building.
Start Date: October 3rd 2007
Expected Finish Date: July 2008
Progress report: Construction is one month in and on schedule
% complete: 40%
Resources:
Project Manager: Brian Hughes
Team: Sarah Watson, Colin O’ Driscoll, Nicola Jones, Derek Moore*, Sisk Construction
Project Details:
Position at October 3rd 2007: (Extracted from Company Overview provided on this date by
Cinema Manager David Walsh):
The Cinema Palace currently occupies one 2177 sq. m unit in Fota Retail Park (circled), and
has ten full sized screens, some of which are under ground level. It employs two assistant
managers, three supervisors, seven full time staff and twenty part-time staff.
The cinema first opened in June 2005 and has increased its number if customers every month
at an average rate of 5%. It now operates at virtually maximum capacity on weekends and
most weekday evenings.
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35
Target Position:
The purpose of the expansion is to be able to adequately implement Cinnovation Plan 2007-
2010. As such, it includes the following elements:
1) To have an 18 screen cinema on three floors including:
a. One 600 seat room containing a stage for theatrical productions, practices,
comedy gigs etc. The room is shaped like an amphitheatre for a greater acoustic
experience and to maximise the use of space. This room also has the capacity to
act as the primary screen in the cinema. (See Appendix 1)
b. Four 500 and eight 300 seat screens, also shaped like amphitheatres. (See
Appendix 1)
c. Five multifunction rooms, capable of catering for up to 150. (See Appendix 1)
2) To have an entrance hall the height of two floors, with five franchise units and ticket
collection points.
3) To incorporate a retail section at the back of the cinema.
4) To have every screen in the cinema digital-ready.
5) To minimise the energy usage of the building through:
a. Maximising insulation.
b. Installing solar panels.
c. Installing a wind energy generator on the roof of the cinema.
Relationships: The aim is to achieve these goals while keeping the cinema running. In order
to maintain customer loyalty, construction will only take place from 7am to 3.45pm on
weekdays – when there is nobody using the cinema. These hours have also been chosen to
maintain the support of local residents. In addition to this, work being done on existing
screens is to be done one screen at a time, so as not to take from the customer capacity of the
cinema too much.
Tasks:
1) The purchase of the whole building (Pic. 1 above), as opposed to just renting half of it.
2) *Drawing up design plans for submission. This task will be carried out by Derek Moore
as he has a degree in Architecture and is already employed by the company. His services
will be paid for apart from his original salary. (See Appendix 1)
3) Applying and securing planning permission for expansion of the premises from the
owners of the retail park and the Planning Authority.
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36
4) Begin external construction on the redesign and expansion of the building. This will be
carried out by Sisk Construction, as they have been partners with PHOD Developments
on many projects.
5) Begin internal construction a new entrance hall and retail area at the rear.
6) Work with franchise partners to construct their units.
Milestones:
1) Purchase the building
2) Secure planning permission
3) Complete digital changeover
4) Grand Opening of the Entertainment Palace on July 26th 2008
Loading: Start Date: 3rd October 2007
Deadline Date: 26th July 2008
Total Work Days: 298
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37
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38
Pricing Plan: Title: Pricing plan
Description: This project aims to improve the customers experience by ensuring a
competitive price through discounts, price packages and special offers.
Start date: 1st October 2007
Finish date: 31st November 2008
Progress: In progress
% complete: 30%
Resources
Leader: Erica Perrozzi
Team: Emma Hanley, Brian Hughes, Colin O’Driscoll, Nicola Jones and
Melissa Harte.
Details of the project:
End of 2006 position: The price for adults per ticket is €9, children tickets are €6.50,
students are €7 and family tickets are €26 (2 adults & 2 children).
There is a phone in order system but there is no online ticket service in
operation.
Target position:
1. Ticket prices will be as follows: Adults = €7.00, children = €4.50, students = €5.50
and family tickets €20(2 adults & 2 children).
2. There will be an online ticket system offering a 10% discount for online purchases.
3. There will be discounts of 20% for groups of over 20 people.
4. There will be special events set prices as follows: Birthdays (per 30 people) = €300
(including ticket and food concessions).
5. Loyalty cards in which you visit 8 times and get a free ticket will be in operation.
6. Memberships will be in operation. A monthly membership will be €100 with
unlimited visits.
7. There will be a swipe card system in operation in which one card will act as a ticket,
loyalty and membership card. Customers will purchase a ticket or membership in the
cinema or online and then will go to the ticket sales counter where the employee will
swipe the card and the ticket will be added electronically. The card will then be
brought to the cinema screen door where an employee will swipe the card and grant
MG 3012
39
entrance. This will also help with shortening the queue time for customers as it will
be completed quickly and easily.
8. All in one packages will be available. These will be one price for food and drink
concessions as well a ticket. Collaboration with franchises will be needed. Price: €13
(adults), €8 (children), €10 (students) and €38 (families).
Relationships: The shortening customer lead times project will need to be completed
before this project will be able to commence.
Tasks:
1. Customer research will be carried out in order to determine if the project ideas are
feasible.
2. Cost and revenue research will be carried out in collaboration with the accounts
department.
3. Prices will be adjusted according to the results of the above research i.e. new normal
ticket prices, off-peak prices, group discounts, party prices and all in one packages
prices.
4. All new prices will be updated on the ticket sales computer system.
5. Once the online ticket service has been set up it will be tested and put in operation.
6. Swipe cards and swipe machines will be ordered and a programme will be installed in
the computer system to follow all member activity, loyalty activity and ensure the
smooth running of the swipe card system.
7. Ticket cards will be distributed during ticket sales to new customers.
8. Advertisement will be carried out to inform the public of the new price system and
swipe card system.
9. Full operation of new price and swipe card system.
Milestones: Milestone 1: New prices set based on previous research.
Milestone 2: Full operation of online ticket service.
Milestone 3: Swipe card system set up.
Milestone 4: Advertisement of new prices.
Milestone 5: Full operation of new price system.
Loading: Total work: 396 days
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40
Work completed: 76 days
Remaining days: 320 days
Schedule: Actual date Start date: 5th October 2007
Deadline: 31 November 2008
Estimated finish date: 5th December 2008
Costs: Benefits:
Research 9,000 10% increase in customer base per year
Price adjustment: 1,500 Continuous increase in profits
Computer system update: 500 Payback 3 years
Online site set up: 10,000
Swipe card/membership programme: 100,000
Advertisement: 74,000
Staff training 5,000
Total Cost: €200,000
Present total cost: €10,000
Swipe Card Design:
MG 3012
41
Progress: The chart below indicates the projects progress as on January 2008.
Swipe card Design:
MG 3012
42
PROJECT STATUS AFTER SIX MONTHS: (April 2008)
Tit le Cost Start Due Responsible %Complete StatusC on stru c tion works an d b u s in ess exp an s ion
€10m Oct -07 Jul-08 Br ian Hughes 60% In progress
Id le C ap ac ity U tilization
€100,000 Oct -07 M ar-07 Colin O'Dr iscoll 100% Completed
Q u ality-C h eck S ys tem R e: Tech n olog y b reakd own an d D ata loss
€20,000 Nov-07 Jan-08 Nicola Jones 100% Completed
P ric in g P lan €200,000 Oct -07 Nov-08 Er ica Perrozzi 40% In progress
R ed u ce an d C on tro l O verh ead s
€30,000 Oct -07 Dec-08 Er ica Perrozzi 35% In progress
E -q u eu in g P lan : S h orten cu s tom er lead tim es
€200,000 Oct -07 Jan-08 David w alsh 100% Completed
H R R evam p R e: E m p loyee M otivation
€10,000 Jan-08 Sep-08 Grace M anning 10% In progress
S creen in g sp orts even ts
€50,000 Apr-08 Jun-08 Br ian Hughes 0% Stopped
R ed u c in g d is ru p tion d u rin g film s
€50,000 M ay-09 Jun-09 David w alsh 0% Stopped
In vest in E xecu tive tran sp ort
€400,000 Jul-09 Aug-09 Colin O'Dr iscoll 0% Stopped
D evelop B ar fac ilit ies on -s ite € 500,000 Feb-08 M ay-08 Br ian Hughes 0% StoppedS creen in g of C on certs an d award s cerem on ies € 300,000 Apr-08 Jul-08
Colin O'Dr iscoll0%
W ait ing
R esearch d evelop m en t of s im ilar ven tu re in G alway € 75,000 Jun-08 Dec-08
Er ica Perrozzi
0%
W ait ing
Projects - Six M onths Forw ard
Six months have now elapsed since “Cinnovation 2007-2010” was introduced. In preparing
this report, it was deemed necessary to document the progress of all projects. The
construction project continues to perform well and is now ahead of schedule (60% complete).
A key factor in this regard is the good working relationship PHOD Developments have
developed with Sisk Construction, having worked closely with them on many occasions. As
it is on schedule management are preparing to set a date to unveil in full the newly
refurbished and fully operational “Entertainment palace”. This is expected to be soon after
the completion date of July 2008. The plan to utilise idle capacity has now been completed
on schedule and is ready for the official opening. Management are confident this will begin
to reap its rewards in the near future. The Quality-check project was completed in February
2008, one month behind schedule. The latter stages of the project proved to be very time-
consuming and as a result Nicola Jones’ team did not meet their completion date. This points
to some failures in the planning of the project. However quality standards have undoubtedly
improved in the short time since its completion meaning it was a success overall.
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43
Erica Perrozzi and her team have made steady progress with both the pricing plan and the
cost reduction project. Both projects are on schedule. Duty Manager David Walsh has
mixed results with the projects under his stewardship. The project concerning on-line sales
and swipe card entry to screens was completed on schedule and has had a significant impact
since its inception. Management and customers alike are enthusiastic about the
improvements if has made to the flow of operations at the Entertainment Palace. His other
project, as explained earlier in the report, was killed before work commenced on it. Grace
Manning (Assistant Manager for HR) and her team have recently set about implementing the
project to revamp the HR structures and thus increase employee motivation. Although this is
in its early stages, it is envisaged that its outcomes will improve working conditions for all
staff before long.
Development and Innovation strategist Brian Hughes has had two major setbacks which have
somewhat undermined the vision of “Cinnovation 2007-2010”. The planned setting up of a
fully licensed bar onsite is no longer an option due to unfavourable market research results,
which showed this could damage the image of the Entertainment Palace. Furthermore, the
project to begin screening sports events in cinema screens was also axed prior to
commencement, as research indicated that a lack of demand did not make it financially
viable. The loss of two key aspects to the innovation plan is a serious blow. However, it
appears demand for the theatre-designed screen may exceed all expectations. Director of
Operations Colin O’Driscoll also decided that the purchase of a fleet of limousines for
transport of executive clients to the cinema was an unjust drain on resources. It was felt that
the investment would only affect a small majority of our clients and would therefore have
little effect on our business. The funds could be spent more wisely in other areas.
Two new projects have been developed in the intervening six months and are still under
investigation. Staging concerts and televising the major show-business awards ceremony is
believed to be a viable alternative to the screening of sports events, but the hosting of film
premieres is now also a new long term goal. Notably, Managing Director Erica Perrozzi
recently announced plans to research the opening a similar operation in Galway. The
research is purely exploratory at this stage, but managed have been buoyed by the success of
the Entertainment Palace to date.
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CONCLUSIONS Having watched with anticipation and as the innovation plan has unfolded, management are
extremely satisfied with the progress to date and are accordingly optimistic for the future.
The achievements of “Cinnovation 2007-2010” has been characterised by the success of
several of its key projects.
The construction project is nearing its completion and is on schedule. This has been a huge
investment for the company but management are confident the benefits will soon speak for
themselves. As seen in the previous status report, other projects are progressing well.
Management are extremely happy with the efforts of all staff. Their work rate, dedication,
and loyalty to the company is to be admired. Hiring the best staff to ensure the Entertainment
Palace operates to the highest standards will continue to be a key focus of management in the
future.
An important hub of the company’s approach has been fostering alliances and partnerships.
The relationship with Sisk Construction goes from strength to strength; and efforts to form
partnerships with local government continue at pace. Management are also confident that the
groundwork with has been done with the new franchises will ensure good relations and
mutual benefits for all concerned.
Communication with the target market has shown that our potential customers appear to be
interested and enthusiastic about the unveiling of the Entertainment Palace. The current
advertising campaign prior to the opening consists of building anticipation for the consumer.
At the moment consumers are unaware of the impending experience that awaits them, and as
such, the heightened novelty impact of this should create a surge of initial demand.
Management have been careful not to disclose the finer details of “Cinnovation 2007-2010”
to the general public. The idea behind this is to stage a grand opening once all works are
completed. The gala event will include promotions, prize-giving and a general atmosphere of
fun and enjoyment for all who attend and take place on July 26th 2008. The media will be
notified shortly in advance to ensure widespread coverage, thereby capturing the imagination
of the paying public as the Entertainment Palace is unveiled to Ireland and the World.
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Although management had planned to implement “Cinnovation 2007-2010” in full, a number
of obstacles were met along the way. The innovation plan envisaged that the expansion of
the Entertainment Palace would a ground-breaking venture, which would be the envy of the
entertainment industry in Ireland and throughout the world. The impressive objectives were
deemed to be attainable at the outset. However as matters progressed it became apparent that
some of the goals of the organisation were too ostentatious to be achieved in a three year
time-frame, if ever.
One of the main disappointments was the collapse of the project to improve transport links to
the Entertainment Palace. Although East Cork Cinema World had a solid market base,
PHOD Developments realised it would be difficult to increase it significantly once the
refurbished and re-named Entertainment Palace came into being. There was simply not
enough public transport servicing the area. It was then decided to include in “Cinnovation
2007-2010” a project to collaborate with the local authorities to upgrade infrastructure. This
would include the creation of three new bus routes. The south side of the city would be
serviced by two new routes. The first would depart every 30 minutes and travel from the city
centre through Douglas, the Rochestown Road and on to Fota business Park via the Jack
Lynch Tunnel. Another route would go from Carrigaline to Monkstown, Passage West and
Cobh (via the Glenbrook River Crossing) and on to Fota, at one hour intervals. The north
side of the city would benefit from an upgrade of the Cork to Midleton route, which would
see services every 20 minutes at peak times with the route slightly altered to access the
business park. It was also proposed to increase the frequency of rail services on the Cork to
Cobh line.
Management believed it to be viable as it would be serving all commuters – not just
customers of the Entertainment Palace. However Cork City and County Councils were
rejected the plans citing budget constraints. This was despite assurances of a multi-million
Euro investment in the project by PHOD Developments. The decision was a major setback
for the company’s innovation plan as it would have a massive impact on customer numbers,
as well as future projections for demand and revenue. On a positive note, plans for the re-
opening of the Cork to Middleton rail link are well advanced. Management are confident
they can capitalise on this by approaching Iarnroid Eireann with a view to establishing a rail
commuter stop in the vicinity of the business park.
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Screening sporting events in cinema screens was an important aspect of “Cinnovation 2007-
2010”. It was hoped that the prospect of watching sports in a cinema style atmosphere would
appeal to consumers. Although market research revealed that the idea itself went down well,
it transpired that most people were unwilling to pay the price of a cinema ticket to enjoy such
an experience. This was another big blow for management’s innovation plan. The knock on
effects of abandoning the initiative will have substantial repercussions in terms of set-up
costs and the loss of predicted future income. It idea was an integral part of the plans to
avoid having idle capacity in the Entertainment Palace (i.e. empty screens). Thankfully, the
schemes to make screens available to host presentations, educational seminars, conferences
and bookings for groups have proved to be a huge success and have improved the problem of
idle capacity.
There is a possible risk of an adverse reaction of customers to the layout of the proposed
facility. Currently the retail units are situated at the rear of the building, after the cinema
screens. A one way system ensures that customers must pass through the retail units before
exiting the building thus stimulating sales. This is a new initiative in the layout of Irish
cinemas. However, management are optimistic that any negative perceptions can be
overcome through effective planning, communication with customers and effective
marketing.
“Cinnovation 2007-2010” originally included plans to establish a fully licensed bar at the
Entertainment Palace. This would have been the first of its kind in the Cork area; and one of
only a handful of such undertakings in the country. It was thought that this novel idea would
enhance the entertainment experience for many consumers. However Market Research was
carried out and the results were not favourable. An analysis showed that the perceived image
of the Entertainment Palace was being damaged. Consumers regarded the company as being
an experience for the whole family to enjoy. The presence of a pub seemingly did not fit well
with their ideals. The crucial decision was soon made to cease operations in the bar and seek
a new franchise to take over the sales unit. The outcome was that a critical element of the
innovation plan was in tatters and €50,000 was lost as a result of research into the feasibility
of the project.
Overall, “Cinnovation 2007-2010”can be seen as a huge success – a triumph of innovation
over uncertainty. Management are confident that the Entertainment Palace can continuously
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strive to reach new levels in terms of product delivery, customer service, technological
progress cost minimisation and quality assurance. The expansive range of services and
facilities being provided will not only match any existing operation in the country, they will
surpass anything else by some length. The Entertainment Palace is assured of benefiting
from first mover advantage by becoming Ireland’s premier entertainment facility. As new
markets become available the company will endeavour to capitalise on them, a fact backed up
by current research into the development of a similar facility in Galway. This innovation
plan is leading the way in enhancing the cinematic experience for consumers in this country.
The opportunities for the Entertainment Palace appear to be endless. Management vow to
ensure that no stone is left unturned in the pursuit of cinematic excellence.
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RECOMMENDATIONS In preparing this report, the Management of the Entertainment Palace have made every effort
to ensure that the Board of Directors of PHOD Developments are furnished with accurate,
relevant and up to date information. We recommend the following to the Board:
The directors (Perrozzi, Hughes and O’Driscoll) appointed to the Entertainment
Palace project should remain in their positions.
PHOD Developments should remain an active partner in the Entertainment Palace and
ensure that finance is provided to ensure its continued development.
All remaining active projects should be implemented in full.
Immediate responsibility for the Cork Entertainment Palace should be transferred to
cinema manager David Walsh.
The Entertainment Palace directors should focus on the continued expansion of the
business model, and further the development of a branch in Galway.
The expansive resources of PHOD Developments should be used to investigate the
possibility of expanding into new industries.
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APPENDICES Appendix 1 Floor plans:
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Roster of Full-time administrative staff employed by the Cinema Palace Ltd. as @ 21/01/08
Position Name Qualifications Managing Director Erica Perrozzi Ph. D in Statistical Industry
Analysis, M.Comm, B.Comm Director of Development & Innovation Brian Hughes Ph.D in Organisational
Development, MBA, H. Dip in Branding, B. Comm
Director of Operations Colin O’Driscoll Ph.D in Operations Management, MBA, B. Comm
Company Secretary Melissa Harte B. Comm (Euro-French) Secretary for Development & Innovation Sarah Watson B.E Energy Engineering Secretary for Operations Elaine Carey B. Comm Cinema Manager - Fota David Walsh B. Comm Cinema Assistant Manager –HRM Grace Manning H. Dip in HR, Dip in Media Cinema Assistant Manager – SCM Niall Routledge H. Dip in SCM, Dip in Business Supervisor – New Departments Mairead Clancy BCL Supervisor Derek Moore B. Sc Architecture Supervisor Hazel Corbett - Supervisor Paul Barrett - Head of I.T. Nicola Jones M. Sc, B. Sc Computer Science I.T. Staff Member James Collins B. Sc Computer Science I.T. Staff Member Michael Wade B. Sc Computer Science Accountant Emma Hanley B. Sc Accounting
Appendix 2: Staff
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: PHOD Developments : New Employees : Existing Employees