The Economic Times  Jul 26  Comment 
The company disbursed 67,398 two-wheeler loans amounting to Rs.340.56 crores during the quarter
The Hindu Business Line  May 1  Comment 
The Maharashtra Rajya Sahakar Parishad, a statutory entity established under the Maharashtra Co-Operative Societies (MCS) Act, 1960, has constituted a nine-member committee to propose changes in the...


Marcus Corporation Logo


Marcus Corporation (Ticker MCS) is an entertainment and lodging company which owns and manages numerous hotels and movie theaters located primarily in the Midwest. Founded by Benjamin Marcus in 1935, Marcus Theatres began as one movie theater in Ripon Wisconsin. Today, The Marcus Corporation currently trades on the New York Stock Exchange and is split into two divisions, Marcus Theatres (the sixth largest movie theater chain in the U.S.) and Marcus Hotels and Resorts. [1]

Movie Theater Division


Marcus Corporation theater division currently owns and manages 54 Theaters in 7 different states 44 of which are owned and 10 of which are managed for other companies.

Marcus and Competitors Location by State

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Location of Marcus Ridge theater in New Berlin, Wisconsin

The Chart above shows that while the three competitors have locations in similar states, the main state Marcus Corporation's theater division operates in, Wisconsin, does not have a sizable Regal entertainment or Carmike Cinemas operation. This gives Marcus Corporation a huge advantage against it's larger competitors because most customers visit local theaters only, and since Marcus has more locations more customers can be reached. [2]

Operating Metrics

Operating Metrics for Marcus Theaters Fiscal Year 2010

The above chart shows different metrics of Marcus Corporation's movie theater division and two of its competitors, Regal Entertainment and Carmike Cinemas. These two competitors were chosen because of they operate in the same markets as Marcus Corporation. The above chart shows the number of theaters and screens per theater. This average is then used to figure out the amount of revenue gained per theater screen. This number can then be used to determine if Marcus is better off adding more screens in their theaters and if Marcus has anything that gives it an advantage against the larger competitors. Obviously, the larger movie theaters have an advantage because they are able to have more people viewing each screen. The concession revenue per location tells a different story. Marcus is able to make less revenue but pull more profit per location than some of its competitors. The concession profit per location is greater than that of Carmike Cinemas. What should be noted about the movie theater industry is that there are a lot of single owned and operated locations. They tend to be locally owned and have customers strictly in a single town or area. Since they are not traded publicly, information could not be gathered on these individual locations.

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Seating for a Marcus Screen in Duluth, Minnesota

[3] [4] [5]

Industry Analysis (Attractive Industry)

Power of suppliers (High/Low)

Movie theaters, especially Marcus Theatres, tend to have multiple suppliers which have very little power over what the movie theater does. However, the large movie companies are the ones that are in charge. Since the movie production companies are in charge of making, marketing, and distributing the movies, theaters are at their mercy. What movies are available to view are completely dictated by the movie companies. If the public is not aware of a movie being shown, they will not show up to see it in theaters. This gives movie companies tremendous power over the theaters.

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Lobby of Majestic Theater located in Brookfield, Wisconsin

Suppliers of concessions and equipment on the other hand have very little power over move theaters. There are many suppliers of theater food and equipment who need the movie theater customers. There are not a lot of choices for projector companies, or popcorn machine makers to sell products to. This makes movie theaters their best choice, giving the theaters strong power over them.

Power of Buyers (Medium)

The movie theater industry tends to operate at a strictly local level. Meaning consumers will tend to not travel great distances to go to the movies. Movie theaters, especially those in small towns, tend to have a loyal local customer base because of the closeness of the location. So this means that the buyers have very little power over the movie theaters. It could be argued that if a movie theater is bad enough, people would just not go to the movies, they would just wait for the movie to come out on DVD or TV and watch it from the comfort of their own home. This gives the buyers more power over the movie theater's actions. The theater must make sure to provide a good enough service to attract customers enough to see the movie in theaters. The movie theater has very little control over the marketing and exposure of movies. The major motion picture companies tend to be in charge of marketing. So the theater industry has little control over what the consumer wants.

Threat of New Entrants (Medium)

The amount of capital to build and start a movie theater is very high. The most expensive part of the theater tends to be the building itself. Therefore, the most common start up of a theater is a person or company buying a theater already in place and running it. This makes starting a theater much cheaper and easy to do. It is also very simple to get a hold of suppliers to provide movies and concessions, making new entrants more likely. There is a limited number of these buildings available however and so the threat of new theaters opening is lowered.

Threat of Substitutes (High)

Watching movies is considered a leisure activity, so any other type of leisure activity could be considered a substitute to Marcus corporation's movie theater division. Everything from watching television to surfing the internet would be considered a substitute. This creates a scenario where

Competitive Rivalry (Medium)

Movie theaters that tend to be located close to each other tend to be highly competitive. However, with the similarity of the products(movies, snacks, drinks, seating) consumers are not very likely to travel great distances to experience the same thing. Any theater is just as capable of playing a movie as any other. So theaters that are far enough away do not have to worry about local consumers traveling to another town to experience the same product. So rivalry is really only a problem at the local level.

Box Office Hits

The below movies were some of Hollywood's most popular movies of 2010. The four movies provided the most revenue for Marcus Corporation's theater division and its competitors.

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Movie Poster for Toy Story 3


  • Toy Story 3 $415,004,880
  • Inception $193,348,000
  • Twilight Eclipse $300,531,751
  • Harry Potter 7 $295,001,070

Hotel and Resort Division


Marcus Hotels by Location

The above chart shows the locations of Marcus Hotels and resorts sorted by location and ownership. The managed Hotels are owned by other companies and those companies pay Marcus Corporation a fee for managing their operations. [7]

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Front sign of Pfister Hotel in Milwaukee, Wisconsin

Operating Metrics

Operating Metrics for Fiscal Year 2010

The above chart shows some operating metrics for Marcus Corporation's hotel division compared to competitors also in the hotel industry. It shows that Marcus is able to collect more revenue per available room. This has been instrumental in assisting Marcus through the current global recession in which consumers are spending less money on travel and lodgings. Marcus is able to keep up with, if not beat, its competitors in occupancy rates which are a large factor in hotels making money. If customers do not stay in the rooms, all other operations of the hotel are meaningless because no one would be around to use them. With these statistics, it would be profitable for Marcus to open more hotels in different areas as apposed to adding more rooms to the hotels already in operation. Already the average number of rooms per operation are over one and a half times the size of its competitors. Marcus may have a hard time increasing occupancy rate of the same locations. [8] [9]

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Room in the Pfister Hotel

Industry Analysis (Unattractive Industry)

Power of suppliers (Low)

Suppliers tend to have little power over hotels and their operations. There are many suppliers that offer many price ranges for hotels and their services. This takes away the power suppliers have on the industry and Marcus Hotels and Resorts specifically. Marcus has a larger operation, with many suppliers. The items needed to run a hotel are also very simple in nature. Suppliers would not be very hard to find for those products.

Power of Buyers (High)

Customers have very high power over the hotel industry. Switching costs for customers are low due to the multiple choices customers tend to have when they go on vacation. Customers also, however, tend to not pay until after services have been provided. If a customer is not satisfied with his/her service, he/she generally attempts to get a credit so they do not pay as much. This makes the hotel industry vulnerable to consumers because hotels need to keep patrons satisfied.

Threat of New Entrants (Low)

Threat of new entrants are relatively low. The costs to build and run a hotel are just too high for many companies to enter the industry. Also, since hotels are busier depending on the location, any spot which would raise large amounts of customers would already have many hotels built there. So the only way to start a hotel cheap would be to buy an existing building, and that can still be really expensive.

Threat of Substitutes (High)

Substitutes for the hotel and resort industry vary. Since the industry can be defined as a leisure industry, any activity could be considered a substitute. However, hotels are used mainly for travel and vacationing. So rather than saying any activity is a substitute, it can be said that activities that take place of travel are the substitutes. Some examples are camping, staying at home, or even mobile homes are substitutes to hotels. The global recession has made these substitutes seem like a better choice since many of them are a cheaper alternative to renting a hotel room.

Competitive Rivalry (High)

Competitive Rivalry in the industry is very high. The largest factor in hotel placement is location. If people are not going to be traveling through the area, or staying there for any reason, hotels will not be successful. That being said, locations that favor those factors will attract many hotels. For this reason, hotels tend to be built close together, giving customers many choices as to where they want to stay. Prices then have to be cut to attract customers to stay.

Revenue Breakdown

Breakdown of Marcus Corporation's Revenue by Sector

The above chart shows the revenue streams of Marcus Corporation. The largest item is clearly movie ticket admissions. However, shown from the chart below, movie theater operations are also the highest cost to the company. Concessions make a higher margin for movie theaters than admission tickets do since the revenue generated is much higher relatively to the costs. This can be attributed to the relatively close prices of movie tickets and concessions. While it is rather expensive to buy the rights to play a movie, it is relatively cheap to make popcorn and have fountain drinks. For the hotel sector, room rental revenue has a higher margin than food and beverages. This can be attributed to the higher price of hotel rooms compared to the price of food and beverages at hotels.

Marcus Corporation Costs by Sector



  1. Marcus Theaters About Section
  2. Theaters section of Marcus Theaters
  3. Marcus Corporation 10-K
  4. Regal Entertainment 10-K
  5. Carmike Cinemas 10-K
  6. http://www.disnology.com/2010/04/28/new-toy-story-3-movie-poster/
  7. Hospitality Management section of Marcus Hotels and Resorts
  8. Marriott International 10-K
  9. Wyndham Worldwide 10-K
  10. Marcus Corporation 10-K
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