Capstone Project

Country entering strategy (Film Industry)

Submitted To Dr. MR Suresh By Group C5 Akheel M Baramy Arun Thomas Aditya Koyya Arunav Bora 11062 11066 11121 11126

Asit Kumar Panigrahy 11128 Harish Shankar NI 11140

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Table of Contents

1. Introduction to the Indian Film Industry .....................................3 2. Company Overview: Yash Raj Films ............................................7 3. SWOT Analysis of Yash Raj Films ...............................................9 4. VRIO Framework .........................................................................10 5. Country Selection process ............................................................11 6. Class of 2010 model .......................................................................21 7. Chinese film market ......................................................................23 8. Ecnomic Analysis of China ...........................................................31
8.1 Economic Analysis of China in terms of Film Industry: ............................................................ 32

9. Market Audit: ................................................................................33 10. Porterrs Five force Model .........................................................35 11. Pressure groups: Host and home country ................................38 12. Marketing Plan for Entering Peoples Republic of China .......41 13 Conclusion .....................................................................................45

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1. Introduction to the Indian Film Industry

The cinema of India has had a profound effect on cinema across the world since the early 20th century. It consists of films produced across India, which includes the cinematic cultures of Andhra Pradesh, Assam, Bihar, Gujarat, Haryana, Jammu and Kashmir, Karnataka, Kerala, Maharashtra, Manipur, Orissa, Punjab, Rajasthan, Tamil Nadu, Uttar Pradesh and West Bengal. Indian films came to be followed throughout Southern Asia, the Greater Middle East, Southeast Asia, and the former Soviet Union. The cinema as a medium gained popularity in the country, as many as 1,000 films in various languages of India were produced annually. In the 20th century, Indian cinema, along with the Hollywood and Chinese film industries, became a global enterprise. At the end of 2010 it was reported that in terms of annual film output, India ranks first, followed by Hollywood and China. Enhanced technology paved the way for upgrading from established cinematic norms of delivering product, altering the manner in which content reached the target audience. Visual effects based Super hero and Science fiction films like Krrish, Enthiran, Ra.One and Eega emerged as blockbusters. Indian cinema found markets in over 90 countries where films from India are screened. India is the world's largest producer of films. In 2009, India produced a total of 2961 films on celluloid that include a staggering figure of 1288 feature films. The provision of 100% foreign direct investment has made the Indian film market attractive for foreign enterprises such as 20th Century Fox, Sony Pictures, Walt Disney Pictures and Warner Bros. Indian enterprises such as Zee, UTV, Suresh Productions, Adlabs and Sun Network's Sun Pictures also participated in producing and distributing films. Tax incentives to multiplexes have aided the multiplex boom in India. By 2003 as many as 30 film production companies had been listed in the National Stock Exchange of India, making the commercial presence of the medium felt. 1.1 Golden Age of Indian cinema Following India's independence, the period from the late 1940s to the 1960s is regarded by film historians as the 'Golden Age' of Indian cinema. Some of the most critically acclaimed Indian films of all time were produced during this period. This period saw the emergence of a new Parallel Cinema movement, mainly led by Bengali cinema.

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Commercial Hindi cinema also began thriving; with examples of acclaimed films at the time include the Guru Dutt films Pyaasa (1957) and Kaagaz Ke Phool (1959) and the Raj Kapoor films Awaara (1951) and Shree 420 (1955). These films expressed social themes mainly dealing with working-class urban life in India; Awaara presented the city as both a nightmare and a dream, while Pyaasa critiqued the unreality of city life. Indian films were frequently in competition for the Palme d'Or at the Cannes Film Festival for nearly every year in the 1950s and early 1960s, with a number of them winning major prizes at the festival. Satyajit Ray also won the Golden Lion at the Venice Film Festival for Aparajito (1956), the second part of The Apu Trilogy, and the Golden Bear and two Silver Bears for Best Director at the Berlin International Film Festival. 1.2 Modern Indian cinema & International Recognition The 1970s did, nevertheless, see the rise of commercial cinema in form of enduring films such as Sholay (1975), which solidified Amitabh Bachchan's position as a lead actor. Another important film from 1975 was Deewar, directed by Yash Chopra and written by Salim-Javed. A crime film pitting "a policeman against his brother, a gang leader based on real-life smuggler Haji Mastan", portrayed by Amitabh Bachchan, it was described as being absolutely key to Indian cinema by Danny Boyle. 1979 Telugu film, Sankarabharanam, which dealt with the revival of Indian classical music, has won the Prize of the Public at the Besancon Film Festival of France in the year 1981. 1987 Kannada film, Tabarana Kathe, which dealt with the inadequate governance, was screened at various film festivals including Tashkent, Nantes, Tokyo, and the Film Festival of Russia. Long after the Golden Age of Indian cinema, South India's Malayalam cinema of Kerala regarded as one of the best Indian film genres experienced its own 'Golden Age' in the 1980s and early 1990s. Some of the most acclaimed Indian filmmakers at the time were from the Malayalam industry, including Adoor Gopalakrishnan, G. Aravindan, T. V. Chandran and Shaji N. Karun. Adoor Gopalakrishnan, who is often considered to be Satyajit Ray's spiritual heir, directed some of his most acclaimed films during this period, including Elippathayam (1981) which won the Sutherland Trophy at the London Film Festival, as well as Mathilukal (1989) which won major prizes at the Venice Film Festival. Shaji N. Karun's debut film Piravi (1989) won the Camera d'Or at the 1989 Cannes Film Festival, while his second film Swaham (1994) was in competition for the Palme d'Or at the 1994 Cannes Film Festival. Commercial Malayalam cinema also began gaining popularity
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with the action films of Jayan, a popular stunt actor followed by Mohanlal, whose film Yodha was acclaimed for its action sequences and technical aspects. Commercial Hindi cinema further grew throughout the 1980s and the 1990s with the release of films such as Ek Duuje Ke Liye (1981) Mr India (1987), Qayamat Se Qayamat Tak (1988), Tezaab (1988), Chandni (1989), Maine Pyar Kiya (1989), Baazigar (1993), Darr (1993),[78] Dilwale Dulhaniya Le Jayenge (1995) and Kuch Kuch Hota Hai (1998), many of which starred Shahrukh Khan, Aamir Khan and Salman Khan. In the late 1990s, 'Parallel Cinema' began experiencing a resurgence in Hindi cinema, largely due to the critical and commercial success of Satya (1998), a low-budget film based on the Mumbai underworld, directed by Ram Gopal Varma and written by Anurag Kashyap. The film's success led to the emergence of a distinct genre known as Mumbai noir, urban films reflecting social problems in the city of Mumbai. Later films belonging to the Mumbai noir genre include Madhur Bhandarkar's Chandni Bar (2001) and Traffic Signal (2007), Ram Gopal Varma's Company (2002) and its prequel D (2005), Anurag Kashyap's Black Friday (2004), Irfan Kamal's Thanks Maa (2009), and Deva Katta's Prasthanam (2010). Break-up of 2011 Indian feature films certified by the Central Board of Film Certification sorted by languages:

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1.3 Influences There have generally been six major influences that have shaped the conventions of Indian popular cinema. The first was the ancient Indian epics of Mahabharata and Ramayana which have exerted a profound influence on the thought and imagination of Indian popular cinema, particularly in its narratives. Examples of this influence include the techniques of a side story, back-story and story within a story. Indian popular films often have plots which branch off into sub-plots; such narrative dispersals can clearly be seen in the 1993 films Khalnayak and Gardish. The second influence was the impact of ancient Sanskrit drama, with its highly stylized nature and emphasis on spectacle, where music, dance and gesture combined "to create a vibrant artistic unit with dance and mime being central to the dramatic experience." Sanskrit dramas were known as natya, derived from the root word nrit (dance), characterizing them as spectacular dance-dramas which has continued in Indian cinema. The third influence was the traditional folk theatre of India, which became popular from around the 10th century with the decline of Sanskrit theatre. These regional traditions include the Yatra of West Bengal, the Ramlila of Uttar Pradesh, and the Terukkuttu of Tamil Nadu. The fourth influence was Parsi theatre, which "blended realism and fantasy, music and dance, narrative and spectacle, earthy dialogue and ingenuity of stage presentation, integrating them into a dramatic discourse of melodrama. The fifth influence was Hollywood, where musicals were popular from the 1920s to the 1950s, though Indian filmmakers departed from their Hollywood counterparts in several ways. "For example, the Hollywood musicals had as their plot the world of entertainment itself. Like mainstream Indian popular cinema, Indian Parallel Cinema was also influenced also by a combination of Indian theatre (particularly Sanskrit drama) and Indian literature (particularly Bengali literature), but differs when it comes to foreign influences, where it is more influenced by European cinema (particularly Italian neorealism and French poetic realism) rather than Hollywood. 1.4 Film music

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Music in Indian cinema is a substantial revenue generator, with the music rights alone accounting for 45% of the net revenues generated by a film in India. The major film music companies of India are Saregama, Sony Music etc. Commercially, film music accounts for 48% India's net music sales. A typical Indian film may have around 5-6 choreographed songs spread throughout the film's length.

2. Company Overview: Yash Raj Films

Yash Raj Films (YRF) is an Indian entertainment company established by Yash Chopra, an Indian film director and producer who was considered an entertainment mogul in India. He set up his own company in the year 1976. Since the 1980s, it has produced many hits in India and the overseas market. The top hits of YRF in descending order of Gross.

In 2004, the Hollywood Reporter placed Yash Raj Films at number 27 in a survey of the "Biggest Film Distribution Houses" in the world; it is India's biggest production company as of 2006. Yash Chopra and Aditya Chopra topped the power list of India as according to the February 2005 edition of Filmfare magazine. Yash Raj Films has launched its own merchandise label called YRF Merchandise which offers a range of products embellished with pictures and posters from Yash Raj Films like Rab Ne Bana Di Jodi, Band Baaja Baraat and many more.

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2.1 Yash Raj Studios Seeing the lack of a proper film shooting studio over the years, the company built its dream production studio, Yash Raj Films Studios, in Mumbai city. Yash Raj Studios, built in 2006, is primarily owned by the chairman and founder of the company, Yash Chopra. The first film to be shot in the studio was Fanaa (2006). The studio was created and designed by Aditya Chopra and his then wife, Payal Khanna, and is equipped with high technology shooting equipment and goods. The studio covers 20 acres (81,000 m2) on seven floors and is used to shoot films for the company as well as being rented to other filmmakers and television companies. 2.2 Yash Raj Film Works and Acclaim YRFs first film was Joshila ('Passionate', 1973), an action-oriented movie fared only averagely at the box office, but his first independently produced film Daag ('The stain' or 'The stigma', 1973), a melodrama about a man with two wives, was a great success. He then made a number of the classic Amitabh Bachchan movies, scripted by Salim-Javed, notably Deewaar and Trishul (the trident', 1978) are great hits and remain popular today. In the early 80s Yash Chopra's movies seemed to be going back over his earlier successes. It was the change in the mood of the viewing public in the late 1980s and the revival of the romantic movie (Qayamat Se Qayamat Tak in 1988, Maine Pyar Kiya in 1989) that allowed Yash Chopra to re-emerge not only as the only survivor of his generation but to reclaim his position at the top. It is this group of films that accounts for his popularity with the younger generation of movie-goers. This highly successful period began in 1989 with Chandni, a huge box-office success, a film with all the hallmarks of what has come to be known as the Yash Chopra style: heroine-oriented, romantic, emotional, depicting the lifestyle of the super elite, with superhit music used in songs picturised in foreign locations. It is known also for its outstanding technical values. Yash Chopra's career surprises most people. Mostly because it is hard to think that this whole corpus of films was made by one man. Yash Chopra has been at the top of his profession for forty years, while most other directors in Bombay tend to have much shorter lifespans. Apart from a brief dip during the 1980s, Yash Chopra has always been among the top five directors. 2.3 Foreign Direct Investment talks in 2007

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Yash Raj Films Pvt. Ltd. was rumored to be in discussion with silicon valley based Velocity Group of USA (now known as FUSE Global) a US$10 Billion+ private media fund controlled by and Indian origin founder and chariman Keyur Patel for a $500M investment potential in the slate funding. Fuse has been strong investor in media in India and Hollywood and has always remained behind some of the biggest media deals globally. To-date there is no word whether there was a transaction that was crafted given the private nature of both companies. Yash Raj Films has forayed into the international market by launching a Hollywood-based production and financing company that will produce international content. The company named 'YRF Entertainment will focus on developing and producing feature films for the US and the international market.

3. SWOT Analysis of Yash Raj Films

Strengths History of backing and producing several hits in Hindi Cinema industry Financially sound and adept production systems Strong Film distribution channels Enormous installations of studios and sets Knowledge from starting production house in Hollywood

Weakness Lack of attempts in producing other regional language movies in India

Opportunities Yash Raj Films have yet to start distribution and production houses in other countries Early bird advantage of starting globally Reputation value in target countries to attract competent personnel

Threats

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Arrival of other international production houses like Warner Bros, Fox Searchlight, Blue Sky productions in India Dispersing of capital over many countries stretching the financial capability too thin

4. VRIO Framework

Value The values of YRF endeavours have brought successful results time after time. The long list of Box Office hits hold testament to this fact. Rarity The rarity of firms like YRF is because of its long standing work in Indian Entertainment industry. YRF has a strong base of writers, playwrights, technicians who are the main cogs in YRF operations. Inimitability YRF has a unique model of film making. Besides the usual mantra and masala of film making YRF has its model which it follows to ensure the appropriate response from its audience. Organisation YRF was headed by the late Yash Chopra who was part of the beginning of the era of modern Indian cinema. Spear heading the organisation is the Yash Chopra family. With the multi nation diversification of its operations YRF has acquired talents and skills of capable personnel from all over the world.

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5. Country Selection process

5.1 Filter-1 Economic Statistics Per GDP 30254 8466 34657 4831 capita % Exports 10.29% 31.77% 10.55% 9.96%
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Country Korea China Japan Indonesia

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Population .05 bn 1.21 bn .13 bn .24 bn

of

Malaysia

15589

.03 bn

9.26%

Singapore

59710

.005 bn

22.83%

As shown in the above table, we considered these six countries for the next stage filtration. The filtration we used here is by considering the per capita GDP of the country, population of the country, export from India to the country. We did not consider Pakistan here since it already has good demand for Bollywood movies and thus starting the operations in Pakistan comes up with some compromises in the bottom line. The above six countries we will be further shortlisted in the next round by using CAGE Framework.

5.2 Filter 2- CAGE Framework Administrative distance Geographic distance Economic distance Both emerging economies, though China's India and China Language barrier Hindi is have completely China and India an been Both GDP are significantly higher India's Chinese industry film has than is are

Country

Cultural distance

alien having problems neighbours in about border Chinas fears even though

language to the Chinese

regarding India, such as their

been growing at 64% which

Chinese people prefer to belief that India watch romantic comedy films which is on US the lines of plan

and is a part of the Access to the is one of the to market is easy highest growth their geographicall y rates of any film industry
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most encircle country

Hollywood films
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in recent times

Still two of these countries join China is a big in of China has

strategically for country achieving mutual Huge success of films like objectives terms geography

restrictions on of films

as than India and number

3 idiots in china proves both of them are thus reach to foreign that young, romantic and emerging flamboyant films have countries

different cities to be released and all over the in a year (20 to china challenging is films), unlike India

market in China like it is belong for India BRICS nation Relation been between because Films Singapor e India In 2003 Chinese, are made in cultural and similarity trade

has strong both of Geographicall There has been a in renaissance Singapore industry

English

and y separated by film sea

and Korean languages

since 2006 It has one of

both

the highest per

Because of strong Tamils countries signed Access to the capita income population, the culture of an agreement to market is easy in the world India is not unfamiliar to expand military geographicall Singapore nations co-operation y around 60000 $

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Bollywood

has % of exports to the country is Singapore is a close to 4.34% the total is

been welcomed fairly Singapore in

Bollywood is familiar to because of and small yet full of

Singapore with programs not limited to of developed which like IIFA (Bollywood significant

cities, buying comparable to power per unit exports area is high china to

awards) taking place in Indian the same place population Since the formal establishment of the South Korea diplomatic

enjoys ties between the

emotional

Bollywood two countries in Geographicall several y separated by

dramas and would love 1973, watching more

movies trade agreements sea and other been countries like china there been

like Three Idiots, My have Name is Khan and Black S. Korea and India reached Recently, have

acknowledgment s in the Korean public and Population is

less at about .05$ bn which makes potential is market looks it

political spheres that expanding with

Korean films are one hour relations and 45 minutes

long. India should be Distance major high

Bollywood films, despite a

low Inspite of to having a good capita

getting trimmer over the economical and compared years, are

still political priority Singapore and per for South Korea China income

considerably lengthier

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The

two

countries agreed to shift to their the

focus

revision of the visa policies

between the two countries, expansion trade, Country of small and compared to is

establishment of India free agreement encourage The majority Bollywood further audience, Ju points out, investment consists of women in the between the two 20-40 age bracket countries India supported Indonesian independence and Nehru had raised Indonesian Indonesia and India Indonesia is one of many question countries in Asia with a the United thriving community in Geographicall the Has got a low per income compared to capita had trade to Korea's per

capita is 30000 which is very high compared to India's

of Nations Security y seperated by other ASAEN Council. On a sea January Size of countries the Population is

Bollywood film fanatics

2011, India and country Islam is a cultural force in Indonesia signed small the country
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is about .24 bn which makes it to not so

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an agreement to compared

double the trade India between within countries Indonesia absorbed had many them 5

attractive compared big to

markets

like China

aspects of Indian culture almost millennia The since two ago. most

obvious trace is the adoption Bollywood songs are very sanskrit into well like by many Indonesian language large Access to the of market possible through and sea Japanese companies, such Though geographicall y Japan and India India is they as Sony,Toyot a, and Honda, land is

Indonesians

are have there manufacturing been facilities in

apart, had the cultural

India, and with the growth of the the Indian

largest recipient exchanges of People follow Buddhism Japanese official predominantly which is development originated basically from assistance Indian land (ODA) between

two countries, economy, especially through Buddhism India is a big market for

Japanese firms

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Japan is inviting Indias growing Bollywood film India is also one

Japan currently Indias

is third

industry to look to it as a of the only three shooting destination, countries in the with

largest source of direct investment foreign

hoping that it will increase world tourist India numbers

from whom Japan has security pact Manmohan Singh's visit to Japan in 2010, both countries

agreed to foster increased business exchanges, people-to-people contact signed and a

memorandum of understanding to The cultural exchanges simplify between the two countries procedures created many parallels in each their folklore Malaysians love citizens The two visa for Japan is one of the largest economy in worlds

other's

terms of GDP

Bollywood. Because of Malaysia and India this a large segment of Bollywood fans from

countries are on excellently friendly terms

Malaysia make it their destination of choice

with each other seeing Malaysia as is Access to the

when it comes to their holiday plans

home to a strong market is an concentration of easy task

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Indian immigrants and the fact being Malaysian prime minister is of

Indian origin

Malaysia has one of the

largest communities Malaysia commercial has of Persons of Indian Origin

Islam is a strong cultural links with India in the world, force in Malaysia and dating back to numbering some of the contents in pre Christian era Bollywood considered may be as close to 2 Malaysia is the largest

million (about third 8% Malaysias population). The two Prime Ministers decided establish bilateral Strategic to a

of trading partner for India

inappropriate with their culture

within ASEAN Indian companies that made major

acquisitions include Reliance

Chinese and Indian cultur

Partnership

in 2010

Industries Limited, Ballarpur Industries Limited, Larsen &

al influences made their October

mark when trade began which envisions with those countries, and development of increased with a multi-faceted

immigration to Malaysia

relationship

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from the long term strategic perspective and

Toubro WIPRO

and

5.3 Filter- 3 Growth trends for film industry in other countries Growth Country Market China Korea $2.08 bn $1 bn rate 33% 13% 20%

Malaysia $150 mn

5.4 Filter 4 AAA strategies for Global value creation Adaptation: Adapting the product according to the needs of the host country. This strategy is already followed in a limited way by the company. Some of the films scenes were censored in some countries because the audience dont prefer to sit in the theatre for more than 2 hours. This creates a problem when the important scenes in the movie also have to be removed which inturn affects the correct understanding of the film by the viewer. Thus adaptation in some cases can be detrimental but nevertheless some simple changes like showing subtitles according to the language of the host country is something that everybody uses as a strategy. Aggregation: This could be the best way that the company should be adopting. The company should also consider the host countrys tastes in mind while making the film. Thus there wont be requiring any tweaking after the film has been released. For countries like China

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where the company foresee a very good potential is one of the best countries to work for considering the opportunity that it gives for the film maker. Arbitrage: this is to exploit the current market conditions so as to achieve cost advantage of other benefits. In China we can use the cheap labour as an advantage to operate at low costs. This in turn will bring benefits to the company and the same advantage cannot be provided by other countries. 5.5 Result: China has been screened after the four rounds of filtration because of following reasons It has got A huge movie market with the highest growth rate than any other country Political distance is minimum between China and India since both of them belong to BRICS countries and have to maintain the relationship strategically. Economy: Chinas GDP is growing at a faster rate (more than world average). This gives good scope to tap an increasing middle class population.

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6. Class of 2010 model

6.1 Firm/enterprise related variables Firm resources, capabilities and competencies YRF is a Veteran film making company with a vast experience in releasing films in overseas countries and achieving success and records in those countries YRF has a unique model of film making. Besides the usual mantra and masala of film making YRF has its model which it follows to ensure the appropriate response from its audience. Nature of product/business The nature of product or the change of pace of technology is slow in the case of film industry. Even though the budget has been increasing because of an increase in the use of

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computerised softwares, the way of broadcasting, the technology adopted by theatres etc remains almost the same for the film industry

Country screening approaches A systematic way of country screening has been done and china has been selected as the target country. China is a must win market for YRF since the company needs to hold a strong position there before any other player comes. In China there is a limit to 20 foreign film releases in a year. Even though this number limit is expected to be increased, the advantage of being a first mover is very high given the restrictions in place. Mode of Entry For a market like china, it is very essential to have a co producer of Chinese origin. This is because an outsider may not be welcomed initially when it comes to producing Chinese films in their country. This holds true in the case of distribution also. Before starting distributing the films, YRF needs to have a tie up with the local distributor inorder to gain the familiarity of the place and interactions with the people. 6.2 Host country related variables Legal System China has got strong legal system in place when it comes to the treatment of foreign players. They have restriction of 20 films a year for foreign films and because of this Bollywood has to compete with other Hollywood flicks for one of the slots in 20. YRF can also influence the government to increase the number of foreign films allowed in a year once they start operating in China. But it requires time for them to do that. Role of Government in host country China has got authoritative leadership working in the ideology of communism. Government is strong and has been harsh towards many companies because the former feared that their existence is at danger. Facebook was banned in China as the Chinese government feared that the people could turn against them after getting inspired by Arab Spring. Thus rules and
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regulations of Government should be given utmost priority lest YRF will have to withdraw from the country after having spend crores of rupees in China. Cultural dimension China is higher in masculinity, long term orientation and power distance. Respecting the authority is very crucial in such countries. Also questioning the deeds of authority also will be considered unacceptable in such countries. Intensity of local competition Chinese film industry has been growing at one of the highest rates achieved in any country. Thus the no of local players and the size of local players would have increased. Thus the competition will be tough from the local players side as they are the host pressure groups. Apart from local competition, the foreign players competition also becomes a determinant factor. This becomes more serious when we consider the restriction on the number of films which can be released in a year. Thus the competition from local and foreign players especially Hollywood movies have to be seriously evaluated and strategized effectively.

7. Chinese film market

China has the fastest growing film market in the world. According to the State Administration of Radio, Film and Television, Chinas box office receipts exceeded $1.6 billion in 2010; a 64 per cent increase from the previous year, By contrast economic woes sent the 2010 US box office down 5.72 per cent to a 13-year low of $10.57 billion. Much of the increase in Chinese receipts was attributed to the success of Avatar and Chinese blockbusters such as Feng Xiaogangs Aftershock and If You Are the One 2 . Chinese box office revenues surged 44 per cent to $908 million in 2009 according to the state-run China Film Group. Chinese films accounted for 56 per cent of the take. In 2005, China's box-office receipts totalled about $230 million. In the 1990s and early 2000s, Chinese filmmakers needed to sell a movie to Europe and the U.S. to make a profit. This is no longer the case, with China's robust box office. Chinese films do well at international festivals.

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From above statistics, it is understood that Chinese films are earning more than every previous year and their size is growing. In addition, Chinese government is trying to restrict foreign movies so that they dont capture the market. There are 16 major studios and 32 distribution companies in China. About 150 to 350 films are made in China each year, with an average cost of $300,000. Most popular films produced in China are dramas and slapstick comedies. 7.1 Chinese losing interest in Chinese movies China is now the third largest film producer in the world, after India and the United States. Chinas film industry produced over 500 films in 2009, compared to just 100 in 2002. In 2010 more than 520 films were madeabout as many as in America. Only India produced more. Only a small number of Chinese films make it to theaters, and many of these are produced by the state-run China Film Group and often play on a swelling national pride to attract wide audiences. Of the 330 films were made in China in 2006 less than half made it to theaters. Most went straight to DVD. Some were never seen; Blockbusters and romantic

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comedies dominated the box office. The Bureau of Film Administration is the government bureaucracy that presides over the Chinese film industry. The number of Chinese watching Chinese films has declined significantly in the past three decades. In 1977, just after the Cultural Revolution, a peak of 29.3 billion people attended films. In 1988, 21.8 billion people attended films. In 1995, 5 billion movie tickets were sold, which is still four times the number as of the United States but about the same on a per capita basis. In 2000, only 300 million tickets were sold. In 2004 only 200 million were sold. The decline has been attributed to television, Hollywood and watching pirated videos and DVDs at home. In the 1980s, about half of all Chinese still didn't have televisions and virtually no one had a VCR.

From the research results as shown, Chinese prefer Hollywood blockbusters mostly than any other films. 7.2 Attitude towards movies China produces three main kinds of movies: commercial films, propaganda films and art films. Chinese art films are popular with the Western art house crowd but are often hard to find in China even on pirated DVDs. In 1995, Chinese art based films won 48 prizes at international film festivals but hardly any of them were shown in China.

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Chinas box office revenue generated by domestically produced films has increased rapidly in recent years. However, the money has come from a limited number of blockbusters which gave no respect whatsoever towards our traditional cultural values. The government is in favor of high movie ticket prices; it is making our film industry into a capital-intensive industry. If a director tries to make a film, he or she will only get the script approved if the film can help the relevant gatekeepers either get rich or get promoted. These gatekeepers dont care about the film industry. Their children study overseas, and their only wish is to wait until they have the money to emigrate. Ironically, they deem China not a good place for their children because of its bad culture. o The Chinese people have always been very sensitive about sexuality but not worried about violence, nurtured on kung fu o Some think films have had a significant social and cultural impact in China o Gradually, Chinese are losing interest in Chinese movies and started showing interest in Hollywood and other countries movies. This is mentioned by Beijing Film Academy too, that Chinese audience consume more foreign films than the other way around o Award winning movies which are art based and which focus on social and political realities are not encouraged by Chinese and they dont earn money in local film market o The government is also in favour of high movie ticket prices, making film industry into a capital-intensive industry. If a director tries to make a film, he or she will only get the script approved if the film can help the relevant gatekeepers either get rich or get promoted o Many Chinese intellectuals productively bring Western cultural theoretical concepts into their work, and play, creatively, in the spaces between Western post-theories and the various streams of Chinese historical cultural heritages o Even though directors prefer art based movies, Chinese viewers prefer love, romance and comedy flicks over genres o One of the directors Zhang said, Young people are the key, if they lose their interest in domestic movies, we will be in big trouble. Then China's film market will be occupied by foreigners. Hong Kong, Taiwan and Korea are examples of this. The mainland is our last battleground. So in this case, it's not shameful to shoot commercial or funny movies
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7.3 Problems to release/make non-Chinese movies o As per an actor, The whole Chinese cultural barrier has made things really difficult. The simplest things seem to involve translations from three different people. Everything takes so much longer than usual o A producer said, People dont like saying yes here. They think about things, and you cant do that when there's a shooting schedule to keep o Communication is the major problem because Chinese language is highly unambiguous and translation or sub-titles doesnt convey the intended message (dialogues) properly. Every sentence might result in two or three meanings resulting in misunderstandings 7.4 Attitude towards watching movies in theatres: o Tickets to Chinese cinemas are costlyabout 80 yuan at weekends. Audiences are paying for the experience of an afternoon away from their cramped apartments, rather than simply to see the film (illegal versions of which are widely available). Cinemas are clean and air-conditioned. Many have state-of-the-art screens and sound systems. The snacks are quite good too. o The number of movie screens grew by 570 - an average of 1.6 new screens every day in 2009. A total of 313 were built in 2010 year for a total of 6,200 screens. This is because they prefer theatres over pirated DVDs. o There is great demand for Drive-in theatres because middle class people with cars like to show-off in front of all.

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7.5 Hofstede measures of culture Comparison India and China

118 120 100 77 80 60 40 20 0 PDI IDV MAS India China UAI LTO 48 20 56 40 30 80 66 61

Power Distance (PDI): Both China and India are very high in PDI rankings i.e., an appreciation for hierarchy and a Top Down Structure in society and Organizations. The subordinate-superior relationship tends to be polarized and there is no defence against power abuse by superiors. Individuals are influenced by formal authority and sanctions and are in general optimistic about peoples capacity for leadership and initiative. People should not have aspirations beyond their rank. That means, if senior members in the family reject a youngsters decision to watch a movie, he/she cant argue. Individualism-Collectivism (IDV): At a score of 20, China is more collectivist culture than individualistic i.e., people act as per the group interests. India is also collectivistic but in comparison with China, India is more individualistic indicating that there is comparatively good priority to self-made decision.
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This will have effect on films because everyone in the group should accept to watch a movie unlike in India where people watch movies alone if others reject to. Masculinity/Feminity: Even though it is mildly above the mid-range in score, India is actually very masculine in terms of visual display of success and power. The culture, spirituality, philosophies often doesnt allow people display masculinity. At 66 China is a masculine society success oriented and driven. The need to ensure success can be exemplified by the fact that many Chinese will sacrifice family and leisure priorities to work. Service people (such as hairdressers) will provide services until very late at night. Leisure time is not so important. The migrated farmer workers will leave their families behind in faraway places in order to obtain better work and pay in the cities. Another example is that Chinese students care very much about their exam scores and ranking as this is the main criteria to achieve success or not. This boosts the directors who prefer dramas showing the lead role grow up in career from nothing. Uncertainty Avoidance (UAI): India scores 40 on this dimension and thus has a medium low preference for avoiding uncertainty. In India there is acceptance of imperfection; nothing has to be perfect nor has to go exactly as planned. India is traditionally a patient country where tolerance for the unexpected is high. At 30 China has a low score on uncertainty avoidance. Truth may be relative though in the immediate social circles there is concern for Truth with a capital T and rules abound. The Chinese are comfortable with ambiguity; the Chinese language is full of ambiguous meanings that can be difficult for Western people to follow. Chinese are adaptable and entrepreneurial. At the time of writing the majority (70% -80%) of Chinese businesses tend to be small to medium sized and family owned. Long Term Orientation (LTO): The Indians score 61, making it a long term, pragmatic culture. Time is not linear, and thus not as important as to western societies which typically score low on this dimension. Societies that have a high score on Long Term Orientation, typically forgive lack of punctuality, a changing game-plan based on changing reality and a general comfort with discovering the fated path as one goes along rather than playing to an exact plan. With a score of 118 China is a highly long term oriented society in which persistence and perseverance are normal. Relationships are ordered by status and the order is observed. Traditions can be adapted to suit new conditions. Chinese people recognize that government is by men rather than as in the Low LTO countries by an external influence such
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as God or the law. Thinking ways focus on the full or no confidence, contrasting with low LTO countries that think in probabilistic ways. Chinese are very long term oriented in relative to Indians and before accepting Indian movies, they definitely make an analysis on it covering how it impacts the society, culture, market etc.

7.6 A-B-C-D Framework

Access: Ticket prices in China are high and economic accessibility to lower class society is not possible very easily as one movie might cost them whole weeks earnings. But to middle class and upper society, economic accessibility is very high. In addition, physical accessibility is also very high to everyone because of the rate at which number of theatres are opening every year and that too are of multiplex quality standards. Buying Behaviour: The number of movie screens grew by 570 - an average of 1.6 new screens every day in 2009. A total of 313 were built in 2010 year for a total of 6,200 screens. This is because they prefer theatres over pirated DVDs. Audiences are paying for the experience of an afternoon away from their cramped apartments, rather than simply to see the film (illegal versions of which are widely available). Consumption Characteristics: The consumption whether it is in theatres or pirated DVDs depends on the ticket prices and theatres quality. And also consumers are mostly driven towards love, romance and comedy movies. So, unless all these conditions satisfy, the audience doesnt spend money to watch in theatres. Disposal: Disposal is not applicable to film industry.

7.7 Political Risks Government Risks Instability risks

Government can censor a Government trying to make Firm Specific Risks film subjectively based on film industry a capital

the content. Eg: A firm intensive industry.

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producing involvement

high and

youth If a director tries to make a violence film, it has to be accepted by specific gatekeepers who dont approve it unless there are some monetary or

may not be allowed in china.

promotional benefits. Government regulation with Fear of government that

regards to co-production and foreign films might have direct film marketing and negative impact on youth and Country Level Risks censorship can change the Chinese culture and might attractiveness of the industry. Chinese change attitude towards

government country.

protectionism can also affect the activities.

8. Ecnomic Analysis of China

Chinas economic freedom score is 51.2, making its economy the 138th freest in the 2012 Index. Its overall score is 0.8 point lower than last year, reflecting worsening performance in business freedom and government spending. China is ranked 30th out of 41 countries in the AsiaPacific region, and its overall score is lower than the global and regional averages. Economic freedom in China rests on fragile foundations. The judicial system is vulnerable to political influence and Communist Party directives, and corruption is perceived as widespread. The partys small leadership group holds ultimate authority, and direct control is exercised over many aspects of economic activity. The pace of genuinely liberalizing economic reform has slowed or stopped. The government has tried to counter the slowdown in global demand with expansionary fiscal and monetary interventions. The embrace of market principles that could enhance efficiency and long-term competitiveness has become sporadic and is unevenly distributed throughout the country. The
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absence of political will to undertake more fundamental restructuring of the domestic economy has led to overreliance on public investment and exports to promote growth. The state-controlled financial sector continues to undercut efficiency and productivity through extensive use of subsidies and credit controls. 8.1 Economic Analysis of China in terms of Film Industry:

China is now the world's second-biggest film market after America. It has a booming homegrown film industry, making historical dramas and romantic comedies, but foreign blockbusters are the big money-earners. Although most films are pirated on release and viewed online and on dodgy DVDs, the rising middle classes are increasingly willing to fork out for a night at the cinema. Last year China's box-office take rose by more than 30%, to over $2 billion, according to the Motion Picture Association of America. The number of cinema screens in China has doubled in five years, to nearly 11,000again, second only to America. China's box-office revenues may overtake America's by 2020. Yet China will not grant Hollywood the access it desires. Until recently only 20 foreign films could be screened at Chinese cinemas each year. In February the number increased to 34 though only if the extra 14 are shown in 3D or large format. So, to guarantee their films are released in China, American studios are trying another ploy: seeking a Chinese partner. Co-productions are not classed as imports and so bypass the 34-ayear quota. They may have better luck being distributed, too. A number of co-productions are under way. Walt Disney recently announced its first partnership with DMG Entertainment in Beijing to produce Iron Man 3, starring Robert Downey junior. This week, during a visit to the Beijing International Film Festival, James Cameron, a director, said he is looking for co-production opportunities in China for sequels to his film Avatar. The film remains the highest-grossing of all time in China. Chinese audiences also love Mr Cameron's Titanic: the newly released 3D version took $105m in its first two weeks of release, double the takings in North America over the same period. But Hollywood's dealings with China have been marred by allegations of corruption. On April 24th Reuters reported that America's Securities and Exchange Commission had launched an investigation into whether American studios made illegal payments to Chinese officials.

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China is difficult in other ways too. From the language barrier to hiring the cast (a percentage of whom must be Chinese), studios must adapt and some try to avoid offending China, even when their films are not co-productions. The invading army in a remake of Red Dawn, an American film, was changed from Chinese to North Korean in post-production. But making a film that Chinese and Western audiences both want to watch is tricky. The 2010 remake of Karate Kid swapped Japanese karate for kung fu, yet the film performed badly in China, where audiences did not warm to a bully-boy depiction of the Chinese. And what will the need for Chinese-government approval do to the quality of co-productions made for the American market? Dan Mintz, head of DMG Entertainment in Beijing and co-producer of Iron Man 3, describes China as both Hollywood's saviour and its worst nightmare. Co-productions will not necessarily be filmed in China. The key is that Chinese producers will provide funding. But co-produced films are scrutinised by censors at both script and post-production stages. Films must comply or risk being bounced from cinemas, which would be business suicide in a market where nine-tenths of revenue comes from box-office receipts (in America, it is closer to 30%). Government rhetoric suggests that the fledgling domestic market needs protection from American imports, at least long enough for it to grow in strength. Shanghai Film Group's 3D remake of Havoc in Heaven, starring one Monkey King, was released in January and made just $8m at the box office. DreamWorks Animation's Kung Fu Panda 2 made more than $90m. The mouse may be commercially mighty, but the monkey has bureaucrats. And, for the time being, they are stronger.

9. Market Audit:
At present China is the third largest producer of films after India and the United States of America. There are 16 major studios and 32 distribution companies in China. About 150 to 350 films are made in China each year, with an average cost of $300,000. Most popular films produced in China are dramas and slapstick comedies. In the next five to 10 years, the Chinese film market could well become the largest in the world. The market grew by almost 44 percent in 2010, and about 30 percent in 2009. In 2009, it was worth US$908 million - about a tenth of the $9.79 billion of US revenues in the
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previous year. At the current rate, the Chinese film market will outgrow the American market in five to 10 years. And out of the entire revenue China films accounted for 56 percent of the take. The rest of the 44 percent was contributed by foreign films.

9.1 Scope of Indian Movies in China:

The craze for Indian movies in China started in 1979 with the screening of Raj Kapoors Awaara. China was still reeling from the excesses of the Cultural Revolution. The Chinese were starved of social and cultural stimulus and eager to control unrest, the government decided to open up the economy. Awaara, released in India in 1951, was one of the first foreign films allowed in. It was a massive hit with approximately 30 million tickets sold. One would have thought that after that 1979 Bollywood breach of the Chinese market, Indian movies would have found slow but ready acceptance in that country. However, the next Bollywood film to make as massive an impact was the Aamir Khan starrer 3 Idiots, nearly 32 years later. The reasons for this are many. Till 2001, China only allowed 10 foreign films in. That quota was increased to 20 in 2001 with an additional 14 for the big screen format. This means that Bollywood films jostle for space with big-budget Hollywood blockbusters that smash Chinese box office (BO) records with mind-numbing regularity. Some point out that a certain kind of Bollywood movie does better than others. Besides 3 Idiots, many light satires like Munnabhai MBBS (rated quite high at 8.0 on the popular Chinese portal Douban), and the politically themed My Name is Khan have fan followings in China. The fact that Chinas box office collections has grown in leaps and bounds since 2001 might spark some interest. In 2001, its takings were a paltry $143 million (Rs7.4 billion). Ten years later, the figure is a whopping $2 billion (Rs106 billion). What is Bollywood waiting for?

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10. Porterrs Five force Model

Porter's five forces analysis is a framework for industry analysis and business strategy development formed by Michael E. Porter of Harvard Business School in 1979. It draws upon industrial organization (IO) economics to derive five forces that determine the competitive intensity and therefore attractiveness of a market. Attractiveness in this context refers to the overall industry profitability. An "unattractive" industry is one in which the combination of these five forces acts to drive down overall profitability. A very unattractive industry would be one approaching "pure competition", in which available profits for all firms are driven to normal profit.

10.1 Barriers to entry: (Medium High)

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The major barriers to entry are: China allows only 20 (additional 14 for the big screen) foreign films to be screened each year across the country. This means that Bollywood films jostle for space with big-budget Hollywood blockbusters that smash Chinese box office (BO) records with mind-numbing regularity.

China exercises tight control over all aspects of filmmaking, films that mock status quo, the political system, show the unflattering side of China or talk about taboo subjects (sex/homosexuality) are banned.

According to a film critic from China, Mr. Zhou It is difficult to get an audience for a Hindi film adding that its length, unnecessary song-and-dance sequences and a predictable storyline are drawbacks.

10.2 Bargaining power of suppliers: (Low - Medium) Supplies required by film production companies include: scripts, costumes, make-

up, props, sets, cameras, film stock, lighting, and stunt and action equipment.

Revenue highly relies on movie industry in a whole.

With the market opportunity huge but with only a limited number of films being allowed to be screened Yash Raj films would need to adhere to the Chinese specifics and cannot bargain on details like censorship and movie run-time.

10.3 Bargaining power of buyers: (Medium - High) Buyers have a strong influence on the success of a movie. Therefore the film producers have to ensure that they provide the audience with the correct mix of entertainment and drama.

Sensitive to the increasing concentration and dominance of cable and satellite program distributors.

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With ticket prices across multiplexes ranging around 70-90 Yuan per ticket the buyers demand the best in class entertainment.

10.4 Threat of potential new competitors: (Low - Medium) As China allows a maximum of only 20 (additional 14 for the big screen) foreign films to be screened each year across the country the competitors from within bollywood do not have much of a chance to compete with Yash Raj Films as its a huge brand.

Moreover, the limit also includes foreign films of other languages including the ones from Hollywood. Therefore there would be nit much of competition from new competitors from Bollywood. Yash Raj would have to compete with majors like Johar productions, Vidhu Vinod Chopra productions and UTV from Bollywood.

10.5 Threat of Substitute Products and Services (Medium High) A significant increase in popularity of other forms of entertainment like cable TV, Computer gaming, online movie streaming has reduced the interest of people in movies.

A rise of downloading programs through the internet, both legally and illegally is proving a great threat to the film industry in China and across the world. The customers download good quality prints of movies free or at a nominal price and enjoy it back at their homes reducing the profitability of theatres and in turn the film industry drastically.

Piracy in the form of DVDs is rampant in China. In 2007, it was estimated that 93 percent of the movies sold in China were pirated. The film industries in China, Hong Kong and Hollywood all lose billions to the pirating of films on videos, DVDs and VCDs that cost only a few cents to make and are sold for around $1 a piece all over

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China in markets, on street corners and subway station and in the backrooms of legitimate DVD and video stores

11. Pressure groups: Host and home country

11.1 Host Country pressure groups:

11.1.1 Government: China being a communist country, its government has placed many restrictions in the screening of domestic and foreign movies. Content that are politically sensitive and sexually explicit are banned strictly and cannot be screened across theaters in China. The Indian movie makers have to ensure to stick to these guidelines before they plan to release any movie in China. In addition foreign ownership of film distribution and movie theater ownership is limited to 49 percent. Foreign films are often blocked from being shown during peak viewing times such as major holidays or when school is in session. The rules can often be changed suddenly and arbitrarily. There have been cases of films premiering and then being pulled because they were deemed to be too successful. 11.1.2 China Film Board: The film board allows only 20 (an additional 14 for the big screen format) foreign movies to screened across China in a year. China's film regulator also has implement laws governing the review and approval of international co-productions. 11.1.3 Chinese Censor Board: The biggest challenges for studios and producers are getting films approved by the Chinese censors and then getting paid their full share of box office. Censorship is an issue because the Chinese authorities view Sino-foreign co-productions as vehicles to promote Chinese soft
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power and to educate foreign audiences about China and the Chinese. Getting paid is an issue because of under reporting and other practices engaged in by the movie theaters here. For example, a kissing scene in the 2010 film Color Me Love had to be shortened because censors deemed it was too long. Many foreign films never make it to China. The guidelines on content are very strict: No sex, no religion. Nothing to do with the occult nothing that could threaten public morality or portray criminal behaviorin other words the basic ingredients for many successful films. Those that are allowed to be shown often have key scenes deleted. 11.1.4 Chinese film producers: With an increase of foreign films in the Chinese film market, domestic box office receipts have shrunk by 12 percent in 2012 from 2011. The Chinese production houses are facing stiff competition and in order to survive they would exercise pressure on the Chinese government to impose stricter restrictions on foreign films. This would prove disastrous to the foreign films that would need to pass through stricter screening norms in order to release their movies in China. State-run companies still control the importing and distribution of foreign films in China, despite a 2009 World Trade Organization ruling that overseas firms should be allowed greater participation. China also protects its domestic industry by only allowing around 20 foreign movies to be screened a year, making it difficult for overseas studios to capitalize on growing demand from the country's emerging middle class. 11.1.5 Chinese film distributors: The most profitable branch of the Chinese film industry is distribution. Of the money taken in the cinemas, 50 percent goes to theater owner, 25 percent goes to the film studio and 25 percent goes to the distributor (it used be 30 percent for the distributor and 20 percent for the studio). One angry studio owner told Reuter he told his distributor, "We spend the money to make the movies; we take all the investment risk, while you do nothing. You make profits on the basis of almost no costs." Films must obtain a new permit each time they travel. This money goes to the distributors, who are often slow to grant permits until they receive enough in bribes. An a few occasions, film makers have stolen their own films from studios so they could be shown in foreign film festivals. Distributors often work together with studios and theater chains and increasing are becoming interested in making money.

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11.2 Home Country pressure groups:

11.2.1 Indian Production houses: The Indian production houses might prove a threat that would oppose Yash Raj Films to venture into China. With the marketing plan of distribution and co-production in the worlds second largest market of films Yash Raj films venture will have to take the bite of having to struggle with its counterparts. These production houses even though would not oppose the distribution they would still oppose the idea of co-production as Yash Raj films being a huge player in the Indian movie industry might prove successful in co-production of movies in China. They could take up this case with the FICCI opposing that this venture would mean Yash Raj investing more on its Chinese venture thereby leading to unemployment among the Indian movie support crews. 11.2.2 Indian People: The Indo-Chinese war of 1962 is still afresh in the minds of the Indian people who believe it was the fault of the Chinese to go to war with our country. Adding to it is the latest news of China trying to capture parts of North East India by issuing stapled passports to residents of Arunachal Pradesh declaring them as citizens of China. Reports of China strengthening its army to stage a war against India would also play havoc to Yash Raj films venture of coproducing in China. People could protest stating that this venture is against the thoughts of the Indians and therefore Yash Raj films would have to drop the idea.

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12. Marketing Plan for Entering Peoples Republic of China

The movie marketing plans for PRC should be chosen specifically addressing local government policies and regulations. As per Chinese government regulation only 20 foreign movies are allowed in to China for direct distribution after translating but going for a full coproduction can give a free ride in China without coming under quota restrictions. But strict rules remain in term of censorship for foreign movies, distribution of movies and coproduction with rules like Chinese actors need to be given prominent roles in the movies and use of technology of film making. The feasibility for Yash Raj films comes here with better movie scripts (Romantic Movies), movies related to current day today lives of people, technical personnel skills, and technology in terms of film making. As a booming market of more than $ 2 Billion China is only second to Japan with a lot of untapped potential in China and rising middle class if the movies can target the middle class population with their aspirations then it can be a great success. 12.1 Marketing Strategies 12.1.1 Film Distribution by Chinese Distribution Firms: Many Indian films like Three Idiots and My Name is Khan were able to become Chinese market block busters through this strategy. Here Indian firm negotiates and gives the distribution and translation contract to Chinese distribution firm for marketing Indian Movies in Chinese mainland. But the flip side is since the marketing is done by the Chinese firm as per law recommends the market study is impossible and highly restricted with restriction on earnings of only 13% of Box office collection. In case of Three Idiots distribution was done by Ekdo Films which grossed revenue of more than Rs.20 Crore in Chinese market, similarly other distribution firms like Zw Films, Xianghong Films and TV, China Film Group and Huaxia Film Distribution Company are other distributors who can help Yash Raj Production with distribution and translation in China. The advantage of this method will be it will help develop a taste for Yash Raj films with the people, marketing and translation cost will be borne by the distributor. This partnership can also lead to a future co-production venture also. 12.1.2 Co-Production in China: Co-production is an area where Yash Raj films can make a move as it can help learn the market in depth without any restrictions at the same time stick to the government restrictions by avoiding foreign film quota. The possible joint venture can be
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like producing Bollywood movie in China which also has Chinese characters to act with the use of Chinese filming units one of the example can by Chandini Chow To China Bollywood Movie produced in India and China with the release by Warner Brothers.Co. Yash Raj films need to have strong partner in co-production who can address the situation of 10 Million people for 7.3 Theatre Screens, which means there is heavy competition for getting theatre release. The co-production can help faster and proper distribution, technology and management learning for Chinese production house. For the Yash Raj films coproduction is an entry opportunity combined with an opportunity to earn more revenue as the profits can be shared on the basis of partnership bypassing the rules for foreign import movies. The co-production movies are considered as home grown movies. The possible coproduction firms in China are Huayi Brothers- strong privately held production house with capitalisation of $1.5 Billion similar to Yash Raj Films, Bona Film Group, and Enlight Media. With government interference and inefficiencies most of the production houses have its own problem. But the strong contender for co-production can be Huayi Brothers which is privately held and a firm that is looking forward to long cooperation with different production houses worldwide. 12.2 Marketing Objective c

The marketing Objective of Yash Raj films should be to become market leader in Chinese film industry with market share of atleast 10% in next 5 years with earnings of more than Yuan 1500 million in co-production with Huayi Brothers. The target market for the movie release initially will be Beijing, Shanghai, Guanzhou, Shenyang, Nanjiang and Tianjin. The target market will be Chinese middle class population which is growing at the fast pace at the same time reaching prosperity. 12.3 Product adaptation and Modifications: The movies produced initially can be in to coproduction with Chinese venture Huayi Brothers. The joint venture can produce movie with Huayi brothers support for movie production in China, Locations, with Script, new technology and direction support from India by Yash Raj Films. The stories can be based on Indians in China and their life with Chinese people with Romance and also comedy which is the major success factor for Indian films in China. The Production can over future look forward to produce movies in Chinese in Mandarin with Chinese people as characters for localisation in case the acceptance for Indian movies is not found good or regulatory changes from the communist government. The content of the co-production shouldnt contain any
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revolutionary ideas or any faith that can harm the government policies and the same can be heavily censored by the government. 12.4 Promotion Mix: In China promotion plays an important role in creating in creating revenue internet is an important medium for advertisements, followed by hoardings and large banners all the promotion activities are subjected to promotion from Chinese government censorship. New social media sites Weibo and Renren. Social media initiative can create viral marketing for movies. 12.5 Distribution & Displays: The movie distribution can be done through the traditional channel by the co-production firm in China like print distribution to theatres in inner regions of China. In the town areas direct to Theatre technology can be used for distribution with movie aired from production centre to the theatre using satellite. The place aspects of marketing mix of service scape come to play here with the Theatres and multiplexes which should be providing the quality movie watching experience, ambience and sounds. The multiplex or theatre should be such that it adds value for the guests and improve the experience in terms of watching movie with ambience, seating and sound quality. Coming to distributing aspect the co-production firm should ensure that the film gets released in the multiplexes that provide best of the experience. 12.6 Pricing: The pricing for tickets in China are extremely high for one single person the charge will be around $10 for one show. The taxes, distribution expenses, and other overheads are extremely high in China so the pricing is also high. The only way to turn people towards theatres from pirated dvd and movies on internet is by providing better service for the money paid at the theatre. The average budget for a Chinese movie can vary from Rs.20 Crore to Rs.50 Crore depending up on the settings and actors. The returns in turn will be around Rs.70 to Rs.80 Crore or more depending up on the movie. 12.7 Resource Requirements & Co-Production Partner In case of entering any market it is extremely important that we have right partner. In case of film industry the decisive factor will be the meeting of gaps in technology for co-production , government interferences, strong distribution ability of the co-production firm for theatre space, financial strength to deal with equal investment for joint ventures, as well as interest to look towards a new industry joint venture with Bollywood. Few of the possible suggestions will be Ningxia Film Group (Government controlled and promoted and just started which has
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only launched one film), China film Group (Owns film distribution in China, Full government control, financially strong, and good experience in film production and distribution), Huayi Brothers ( $1.5 Billion firm, Open for tie ups and coproduction and experience with Hollywood co-productions, privately held firm, and Strong distribution network), Bona film Group ( privately held, More oriented towards Hong Kong and USA, Listed in NASDAQ with market capitalisation of $34 Crore) . From all the above discussed the viable firm is Huayi Brothers as it is privately held, looking forward to co-productions for technology, better script, previous experience with other firms in co-productions, strong distributions systems and financial capacity for co-productions making it a strong candidate for a tie up with Yash Raj Films. 12.8 Resource requirement 1. Financial Resource- The initial joint venture and production can cost Yash Raj at least Rs.150 Crore with expense for setting local office, initial film expense, marketing and production expenses, licensing expense and fees. 2. Personnel Resources- The personnel resources will consist of marketing division, acting crew from India and China, editing staff, distribution and other technical activities crew. All these are intangible and highly skilled as they form part of the service environment. 3. Production Capacity- This will be the requirement of shooting spaces and studios, number of pictures that can be produced by the firm in one year and ability to break even the same.

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13 Conclusion
The study concentrated on entry for Yash Raj films to Asian Markets which are growing at fast pace at the same time provided growth opportunity for the firms operations abroad. The study mainly focuses on the match of the capabilities of the firm Yash Raj films with the need of a country that has all necessary criterias like growth, paying capacity, infrastructure for growth pulled back by lack of experience in to film industry, technology and guidance which will give Yash Raj films an opportunity outside at the same time an opportunity for the foreign firm to learn the art of film making with respect to time. The countries were selected from Asia basically South Korea, Japan, Peoples Republic of China, and Pakistan. Among the few selected the shortlisting was based on economic screening and political conditions prevailing in the country. The approach also looked at the long term gain and creating valuable relationship that is sustainable. The result of the screening showed to go towards Peoples Republic of China which has the worlds biggest populations and world number 2 in box office. The screening approach also analysed the cultural of China, Chinese film culture, Cultural Distance and Economic situation, rules and regulations to prove that the destination is valuable. But the offset regarding joint ventures, censorships, quotas created a negative image but the improving relationship between India ad China , growing trade relationship and opportunity for growth on the basis of sharing each ones knowledge and values can create a good relationship for entering a country. As a part of the study it was able to understand that Chinese people are highly law abiding because of strict regulations, regulations and penalties. Evaluating Chinese market China is a Standalone Market with its growth potential as well as a platform country with its proximity with Singapore, Malaysia, Taiwan, Japan, Koreas. The movies which are permitted in China can easily move in to other east Asian Markets as the PRC censoring regulations are extremely strict and other countries are more liberal so PRC can become a platform nation with its geographical as well as cultural proximities. From our study we are able to conclude that Yash Raj Films should venture in to PRC with co-production firm which is non-governmental, financially strong, and having good distribution networks like Huayi Brothers to establish its foot print in China. The firm should be looking forward to co-production with Indian and Chinese artist followed by pure mandarin films depending up on the peoples preference.

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Reference
http://www.bbc.co.uk/news/business-13894702 http://www.business-standard.com/india/news/indian-film-industry-looks-good-in-global-peckingorder/476724/ http://www.nytimes.com/2012/04/30/business/media/china-film-group-acts-as-a-powerfulgatekeeper.html?pagewanted=all&_r=0 http://factsanddetails.c http://www.businessweek.com/magazine/china-and-hollywood-team-up-for-more-coproductions09082011.html http://factsanddetails.com/china.php?itemid=245&catid=7&subcatid=42 http://www.globaltimes.cn/NEWS/tabid/99/ID/748556/Chinese-film-market-enters-busy-seasonwith-40-films.aspx http://chinahollywood.org/chinese-entertainment-industry-overcoming-barriers-entry http://www.bbc.co.uk/news/world-asia-15691218 http://www.dnaindia.com/entertainment/report_has-bollywood-breached-the-great-wall_1678982 http://chinafilmbiz.com/2012/07/29/chinas-leading-movie-production-companies/

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