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Eros’ Backward Integration Strategy: A Trendsetter for Indian Film Industry?

CASE STUDY, MEDIA AND ENTERTAINMENT
ET Cases, 9 Pages
AUTHOR(S) : Syed Abdul Samad and Dr. Nagendra V. Chowdary

Case Preview

Eros’ Backward Integration Strategy: A Trendsetter for Indian Film Industry?

 

Eros International Media Ltd. (Eros), India’s largest film company1, along with its in-house film production company, Trinity Pictures (Trinity), in 2015, had embarked on a journey to rewrite the rules of producing and distributing Indian films. Led by a slew of professionals, Eros’ backward integration strategy was based on 3 filters – Is it franchisable? Is it in an unexplored genre? And can it hit 1,000 crore in terms of revenue as a franchise? With these 3 sign posts, it had already lined up 10 films which would be made over the next 2 years (2017-2018).2 However, the analysts were wary about the execution of Eros’ backward integration strategy and its influence on the value chain of the Indian Film Industry.



1 Vanita Kohli-Khandekar, “With Trinity, Eros goes beyond the script”, Business Standard, April 23rd 2016, pg 21
2 Ibid.

Teaching Note Preview

Eros’ Backward Integration Strategy: A Trendsetter for Indian Film Industry?

 

Synopsis

Trinity Pictures (Trinity), Eros International Media Ltd.’s (Eros) in-house film production wing, was rewriting the rules of film-making in the Indian Film Industry. While Eros was competent in getting the deals, co-producing and distributing films, Trinity had taken up backward integration. Eros, which earlier was only funding storytelling, had brought storytelling and creation within Trinity by lining up a slew of writers and directors, who were working on creating characters and stories. Led by a slew of professionals, Eros’ backward integration strategy was based on 3 filters – Is it franchisable? Is it in an unexplored genre? And can it hit 1,000 crore in revenue as a franchise? Along with this backward integration strategy, it also merged a multi-model strategy where each of its entity was involved with making different kind of films – Eros would take up big-star projects, Color Yellow would produce small budget films and Trinity would make franchise films. This case study enables a discussion on whether Eros would be able to succeed with its backward integration strategy and how it would impact the Indian Film Industry?

Prerequisite Conceptual Understanding (PCU)/Before the Classroom Discussion

The students/participants should be asked to read about the following topics:

• Vertical Integration – forward and backward integration
• Film Industry’s value chain
• Corporate Strategy – for a media and entertainment firm

Assignment Questions

I. Discuss the value chain of the Indian Film Industry and the major innovations in the Indian Film Industry in terms of financing, production, distribution and marketing.
II. Debate on the efficacy of Eros International’s backward integration strategy through Trinity Pictures based on its 3 filters?
III............

Preamble to the Case Study Analysis and Suggested Orchestration

This case study helps understand the reasons behind Eros taking up backward integration and the benefits for the production company. It also gives an idea of the value chain of the Indian Film Industry and the trends and innovations w.r.t. film financing, producing, marketing and distributing. It helps to analyze the factors contributing to these innovations. Further, it allows the participants to debate about the possible impact on other studios operating in the Indian Film Industry. The case study analysis was carried out as presented in Exhibit (TN)-I..........

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Abstract

This case study enables the participants to discuss and debate on Eros International Media Ltd.’s (Eros) backward integration strategy within the Indian Film Industry. Eros, India’s largest film company, along with its in-house film production company, Trinity Pictures (Trinity) had embarked on a journey in 2015 to rewrite the rules of producing and distributing Indian films. Led by a slew of professionals, Eros’ backward integration strategy was based on 3 filters – Is it franchisable? Is it in an unexplored genre? And can it hit 1,000 crore in revenue as a franchise? With these 3 sign posts, Trinity’s CEO, Ajit Thakur, had already lined up an illustrative list of writers, directors and 10 films that were ready to go on floor over the next 2 years (2017-2018). While the industry pundits concurred with the strategy, the analysts were wary of the execution. Could Eros rewrite the script for the way Indian movies were made with a larger scale and target global audience? Would Eros become another Walt Disney?


Pedagogical Objectives

  • To understand the value chain of the Indian Film Industry and have an overview of the major milestones in terms of funding, production, distribution and marketing of Indian films over the last few decades
  • To discuss and debate on the efficacy of Eros International’s (through its in-house film production house Trinity Pictures) backward integration strategy based on its 3 filters
  • To discuss on the possible impact that Eros’ backward integration can have on Indian Film Industry’s ways of making and marketing Indian movies

Case Positioning and Setting

This case study can be used for either of the following:

a) MBA Program
Strategy Course: Vertical Integration – Helps understand that a Vertical Integration strategy (Forward or Backward) allows a firm to have greater control over its processes and gain competitiveness.

b) Executive MBA/MDP
Media and Entertainment Course: Corporate Strategy for a Film company – To have an overview of the Indian Film Industry’s value chain and discuss on Eros’ backward integration strategy’s efficacy.



This Case Pack Includes:
- Abstract
- Case Study
- Teaching Note (**ONLY for Academicians)

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