# I need the internal analysis according to the following AMC Theatres case # I need the VRIO analysis I need four or five things AMC they are really good at and their real competitive advantages and evaluate them through VRIO in a table comparing between the capabilities and the impact on their competitive advantage. # Finally I need what are the key factors from that VRIO Analysis. # I need some important strengths and weaknesses The case Intro. Movie theaters across the US and worldwide have been dealt a massive blow over the past two years. Overall, domestic box office numbers plummeted from 2019 to over $4 billion as of August 2022. Movies intended for the big screen ended up on streaming sites. A lot of the studios had to scramble and immediately put some of their films. I remember The Invisible Man had been out, was doing really well and in mid-March, had to go to streaming. As the pandemic escalated, the film studios made every effort to solidify their streaming services and shore up subscribership and AMC in other major theater chains in the U.S. were at the forefront of this change. Some small, independent theaters closed down permanently as bigger theaters closed down for months at the start of the pandemic. According to some estimates, roughly 1000 screens out of 42,000 screens were closed down due to COVID 19. As for EMC, the pandemic was chaotic. It was out of cash, nearly bankrupt, and the 2021 'APE' meme movement quite possibly saved the company. Yet AMC is looking to stage a comeback. The company announced in August 2022 that it plans to issue a dividend to all common shareholders of 517 million shares of preferred stock under the ticker 'APE'. They saved AMC, and that's when they saved AMC. We had some we had some real money in the bank. We have a massive evaluation of our company right now in market cap, and we need to grow into that valuation. And I think a way to do that is to expand the appetite of AMC and reach beyond just being a pure movie theater play. Well over two years of anemic box office attendance, lack of movies debuting on the big screen and shorter exhibition windows. Can AMC avoid the onslaught of competition from streamers and make the comeback that's looking for? In 1920, brothers Maurice, Edward and Barney Dubinsky purchased their first theater in Dominating the theater industry. Kansas City, Missouri, about a decade later. The Dubinskies owned 40 theaters across Missouri. In Kansas in 1961, the theater changed its name to American Multi Cinemas or AMC. During this time, AMC's multi-theater approach was a game changer, allowing for more movie choices for audiences at one location. AMC is a very innovative company, and when you look at the evolution of seating, for instance, just the sheer size of the seats, cupholders all that. AMC was always on top of that kind of thing. And then beyond that, loyalty programs like the Stubs program and then sort of adopting a subscription-based purchasing ability. By 2012, AMC would see its growth expand rapidly. Dalian Wanda Group acquired AMC that year. The $2.6 billion deal was paired with a $500 million investment to renovate all AMC theaters, making the company the largest theater chain in the world. Since AMC's acquisition from fiscal year 2013 to fiscal year 2016. AMC nearly tripled its number of theaters, and by 2019, the company operated over 1000 theaters around the world. As AMC expanded, so did its revenue. The company saw stable growth, invested heavily into their own theaters. They added restaurants, IMAX and Dolby screens, expanded their own film distribution company, Open Road Films, and even established their own subscription service. These heavy investments allowed AMC to record revenues year over year, but that came to a quick halt in March 2020. The pandemic and streaming. The top three theater chains AMC, Cineworld and Cinemark closed from March 2020 to slowly reopening in August of that same year. The domestic box office plummeted, costing the industry over $9 billion in revenue. There were very few movies to show because studios were delaying the releases of films. And so we were showing old movies from 20 and 30 years ago and nobody came to our theaters. The top three theater chains face billions of dollars in lost revenue in just one year. AMC alone lost nearly $4.3 billion in total revenues. And we went from a world in the domestic marketplace, US and Canada, that had over 5000 theaters open literally overnight to under 100 theaters, and in particular, a huge theater chain like AMC, whose business, along with many other companies, was almost decimated overnight. We had no idea that we were almost going to run out of cash five different times in 2020. A big multinational company, $5 billion-plus in revenue, very stable industry, mature industry. It wasn't growing all that fast, but certainly it wasn't shrinking. All of a sudden, we had no revenue at all. Just overnight gone. By October 2020. AMC resumed operations with theater capacity only reaching about 20 to 40%. The company garnered about 2.2 million guests to their venues, an 85% drop from the year prior that same month. AMC was on the verge of filing for bankruptcy. The movie titles kept on getting delayed because studios understandably didn't want to release their big blockbuster movies where they spent hundreds of millions of dollars on in the middle of the pandemic when they were afraid no one would show up at theaters. So we announced in December of 2020, mid December 2020, that we needed to raise at least $750 Million to make it at least through June of 2021 for AMC to survive. And we were very much running down to parallel tracks. We wanted it. We wanted to do everything in our power to prevent bankruptcy. And that meant raising money. And that was clearly my singular goal. But if we had to go into bankruptcy, we were preparing to do it professionally and smartly. While AMC and other theater chains were nearing their breaking point, this is when streaming services seized upon a massive opportunity. Legacy streamers like Netflix, Amazon and Hulu already had a pipeline of content and solid business models, but others want it in Disney Plus and Apple TV Plus, launched in 2019, while HBO, Max Peacock and Paramount Plus launched in 2020 and 2021, respectively. Most films, typically slated for the theaters, found homes on these streamers, all of which tested different business models. Disney Plus had its premiere access, which garnered $60 Million in rentals for the film Black Widow. On its opening weekend, HBO Max streamed their 2021 theatrical releases at no extra cost while also debuting them in cinemas in 2021. When movies slowly began trickling back into theaters, a part of the long-standing business model was its theatrical window, which went from 90 days to 45 days and in some cases, 17 days. Studios will average up to 80 or 90% of box office sales, depending on the film. That's usually applicable to bigger films like a marvel release or anything. That's high stakes along those lines, but it tends to average out over time, and theaters will collect a higher share of revenues, even just starting days after an opening weekend. While the new change to the theatrical window has been met with an overall positive response. The new theatrical window could impact smaller theater chains the most. At face value. The change down from 90 to 45 sounds more drastic than it really is. However, smaller theaters need some of that revenue more, and they rely on not just the blockbusters, but we're talking about arthouse theaters that have had a longer recovery period to go here. And honestly, until this year, it was it was a real struggle and it's still a big challenge. As best as we can tell, about 1000 screens out of 42,000 closed. And we don't know that those are all permanent. Some of them are some underperforming screens for larger circuits. Some of them are individual companies. In 2021, though, still hampered by the lack of films debuting, the sentiment surrounding theaters began to shift, and box office revenues nearly doubled from the year prior. Signaling a return of the movie theater. Not only was Spider-Man No Way Home a great film, but it posted the second biggest domestic opening weekend of all time. All time. And then, of course, now we've seen over the course of the summer of 2022, almost a total return to normalcy in terms of not just having one movie dominate Spider-Man No Way Home, for example, was responsible for 92% of the overall weekend box office domestically when it opened. That's a very top-heavy marketplace. Now we're seeing where you can have five films all doing well due. Checking it out at the box office while. Streaming first was the primary focus early on in the pandemic. The companies who own these streaming services needed to get their films back into theaters. Five out of the eight most popular streaming services are backed by film studios, with backlogs of films that needed to turn a profit at the cinemas. Big tentpole blockbusters look to exclusively be debuted in theaters. AMC's comeback. Fast forward to today. So far in 2022, both theaters and studios are poised to make a comeback as record-breaking attendance and the overall moviegoing sentiment has been revitalized. Basically about 8% behind the summer of 2019. And if you look at July, we're actually about 35% ahead. I think there's no question that audiences are ready to come back to the movies. We had $300 Million opening weekends over the course of six weeks, and that's only happened twice before in the history of movies. Business models developed during the pandemic for streamers like Disney Plus and HBO, Max are now gone from their respective platforms as they focus on theatrical releases. This is a content-driven industry now. Studios are going to be producing more and more and more. They're going to figure out in the long run where some of those things belong. And sometimes it's going to be on streaming. Sometimes it's going to be in theaters. And ultimately people will choose with their wallets. As for AMC's comeback, the company learned from its mistakes during the pandemic that it cannot rely on the moviegoing experience alone. More recently, the company made some head-turning investments, such as investing into a gold mine and launched their own retail popcorn and concessions business. We've got to take this company, AMC Entertainment, much further. Then just being the operator of 1000 movie theaters in the US, Europe, in the Middle East, we have a massive valuation of our company right now in market cap and we need to grow into that valuation. And I think a way to do that is to expand the appetite of AMC and reach beyond just being a pure movie theater play and do other things as well in the future as we did movie theaters in the past. AMC, in its Q2 of 2022 raked in nearly $1.2 billion in revenue, a drastic jump from 2021 and an even bigger jump from 2020. The company also announced in a press release that not only would 517 million in preferred ape shares would be created, but the shares would have the same voting rights as AMC's Common Stock. Citing that, given the flexibility that apes will give us, we will likely be able to raise money if we need or choose, which immensely lessens any survival risk as we continue to work our way through this pandemic to recovery and transformation. AMC's comeback story is at the center of yet another major inflection point in the 1980s. It was the home release of VHS in the 1990s and 2000 it was DVD and Blu-rays. Today it's streaming, but AMC and other theater chains are finding themselves quite needed as major streaming services are learning that they need audiences to return to the theaters first. There's no reason why theaters can't coexist with streaming. People all have kitchens in their houses, but they go out to eat in restaurants. They can make content for streaming. They can make content for theatrical release. And the world is big enough. Consumer appetites are large enough that we can all live harmoniously. Movie theaters in a way. And even as big as AMC is for AMC, they're like a bespoke, curated event-creating business