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Instructions:

Instructions:

You can add anything that you think it is important for any question.
You can find all answers below the questions (only read the answers and write in your own words – to avoid plagiarism – because I collect these answers from web and friends)
Paraphrase
Free plagiarism
Please, this paper very important for me so do your best on it.
4 references only.

Regards
INTRODUCTION ( 150 words) please, do not use (First, second, etc ) you can add anything that you think it is important for this introduction.

Professional placement is a vital component of a pupil’s experience. It is where learning opportunities are available for students to undertake practice under supervision. Professional placements have a positive effect on students’ ability to integrate theory to practice. It is essential to conduct this type of practice for several reasons. Firstly, quality placement experience is considered to be part of effective education. Secondly, patients and the public need to have the highest performance from health care professionals. Lastly, it builds knowledge and experience in order to prepare senior students for professional practice The aim of this report is to highlight King Khalid University Hospital (KKUH). The focus will lie particularly on the Health Information Management Services (HIMS) Department. The 45 placement objectives will be discussed, analysed and considered.

1. Hospital location, relevant history, specific points of interest. Maximum of one page. ( Almost 250 words)

2. Describe the type of hospital and services or facilities available. Include the number of beds, average daily occupancy, annual separations, day cases, emergency and outpatient occasions of service. ( 200 words)

This information to answer question 1 & 2

In year 2014, statistics
Patients admitted 44,879
Patients Discharged 44, 863
Avg, Daily Census 653
Avg, Occupancy Rate 84
Avg, Length of Stay 4.6
Number of Operations 7,435

No, of Visits in A&E 156,398
NO, of Outpatients Visits 367,853
King Khalid University Hospital (KKUH) is in the central of Riyadh city.
Established in 1982.
The second and biggest educational hospital in Riyadh city, Saudi Arabia.
KKUH provides many services for researchers and trainees.

And it was limited in its infancy on the complex outpatient clinics, and then evolve with time to work with a capacity of 950 beds and 20 operating room, and a separate building for clinics featuring 161 examination room in addition to other facilities. It also has a full-service hospital in the medical laboratory services and radiology and pharmacy.

King Khalid University Hospital on an estimated area of 80,000 m 2, to reach the absorptive capacity of the hospital inpatient beds to 1,200 beds, as part of the ongoing development projects taking place in the city medical facilities in the field of educational services and medical.

In 1982, a dedicated university hospital was opened and was named King Khalid University Hospital. This facility is an 950 bed facility with all general and subspecialty medical services. It contains a special outpatient building, more than 20 operating rooms, and a fully
equipped and staffed laboratory, radiology, and pharmacy services in addition to all other supporting services.
The hospital provide primary, secondary care services for Saudi patients. It also provides tertiary care services
to all Saudi citizens on referral bases. All care is free of charge for eligible Saudi patients including medications.

KING KHALID UNIVERSITY HOSPITAL
Free health services, vital to any society, are offered by King Khalid University Hospital (KKUH), which possesses highly qualified consultants, carefully chosen physicians, and the finest nursing staff and general personnel possible. KKUH possesses the most current technological equipment, and annually serves the needs of a host of ambitious students at the College of Medicine.

KKUH has several specialized departments like:
• Medical Imaging (Radiology)
• Laboratory
• Nursing Department
• Rehabilitation
• Anesthesia
• Pharmacy
• Infection Control
• Clinical Physiology Department
• Physiotherapy

HEALTH INFORMATION MANAGEMENT SERVICE

3. Obtain a copy of the health service organisational chart showing the lines of responsibility. Discuss the reporting structure, especially pertaining to the Health Information Management Service. Include advantages, disadvantages, issues, review, plans for future change if applicable (Around 270 words). (See attachment)

The HIMS department plan is attached in the appendix.
The Hospital organisational chart is important for all staff.
All staff must have access to the organisational chart.

The organization chart can be defined as the level of employee involvement in decision-making through teamwork. In addition, it helps to bring groups of people together in order to perform efficient and proper functions. It is essential to determine the relationship between functions, positions, responsibility and authority to do particular tasks.
If you look at attached an organisation chart (Chart 1) you would notice variety of departments are listed on the chart with evident reporting structure. However, it does not encompass Health Information Management Service.

The patient information manager position is shared amongst two health information managers who report to the executive director. The Coders and the freedom of information officers report directly to the managers of patient information. There are three deputy health information managers who oversee the inpatient and outpatient clerical staff. One of the deputy managers is employed full time and two of the deputy managers work part time, therefore share the vacancy.
The main advantage of the organisation structure is that relative to the size of the hospital and the number of staff in other secondary hospitals there are an adequate number of staff at KKUH. This reduces stress related to work overload and increases efficiency as tasks may be distributed amongst the employees. The current weakness of the organisational structure is related to varying roles amongst clerical staff such as the inpatient and outpatient clerical staff. This poses a problem in circumstances where there are clerical staff shortages and staffs are required to cover positions within the different clinics, due to the limited training the staff will not be able alternate between the positions.
4. Obtain a copy of the Health Information Management Service organisational chart. Discuss the reporting structure, justifying any advantages or disadvantages to the structure (250 words ). (See attachment)

The HIMS organisational chart is attached in the appendix.

The HIM’S organisational chart is important for all staff.
All staff must have access to the organisational chart to understand their responsiblites, enhance the workflow, …, … etc
Shows clear reporting structure – employees know who to report to, who to contact when there is an issue that needs resolving or a question that needs to be answered.

Advantages are clear lines of communication, clear lines of authority, and clear areas of responsibility. In an organized hierarchy, people are encouraged to communicate with the level directly above or below them, which keeps other levels clear of communication “clutter,” leading to more efficiencies and providing easier communication with familiar levels and people. The clear lines of authority are very important, because personal relationships and other factors tend to muddy these if there is no organizational chart.
A chart also lets people know what their functions and responsibilities are, which keeps everyone in an organization on track, doing what he or she is supposed to be doing.

Disadvantages of having an organizational chart include a loss of flexibility, possible difficulties in lateral communication, and a significantly decreased exchange of ideas, although a matrix structure can alleviate some of these problems, while creating others. When people have assigned roles and responsibilities, they might have a tendency to never think about pitching in to help in another areas, for example, and assigned work is completely confined, although it might be better served by going outside the chart’s limits. A rigid structure can hinder lateral communication, with no clear means of one department communicating with another, which can lead to difficulties when things go wrong, or even when they don’t. This lack of communication also can mean that ideas among departments are not exchanged, with many missed opportunities for improvement in a company.

5. Outline the key functions and scope of the Health Information Management Service (Around 160 words).
Please write at least 10 functions.

The HIMS department will enhance the workflow and to provide high quality services for patients at KKUH.
There are many of functions and responsibilities of the HIMS. The important include and not limit to:
? Maintains confidentiality of patient information at all times.
? Maintenance of computer patient administration system (eSIHI) and other information systems.
? Release confidential patient information to authorized Health Care Professionals external to the Hospital.
? Provision of medical records and other relevant material for approved research, audits clinical review and education.
? Development and implementation of the Quality Improvement Program to ensure that both patient care and Health Record Management Service comply with established standards. This includes assessing the medical record content as well as medical record services.
? Supply morbidity statistical data
? Provide clerical, secretarial and reception services throughout various units and department in the Hospital.
? Collection of departmental and hospital-related performance indicators.
? Provide advice, where appropriate, to other Hospital departments on medical record related matters.
? Allow classification of diseases and procedures for inpatient admissions using international Classification of Diseases and Health Related Problems, 10th Revision Australian Modification (ICD-10-AM).
6. Read the job descriptions of the Manager and senior supervisors within the Health Information Management Service. To gain an understanding of the scope of each position.
• List and briefly document each position.
• Discuss the roles and duties with the staff concerned.

(Around 10 points for each position) (For all questions, around 1100 words)

Manager of HIMS
? Create and maintain policies and procedures related to health information
? management.
? Oversee all activities in the HIMS including admission and discharge, medical record service, non-admitted service, freedom of information, central secretarial service, health information system support
? Improve quality of care in evaluating and meeting customer needs.
? Improve performance management to help increase work performance.
? Ensure availability of technology in order to have accurate and secure health information.
? In charge of the financial operation of the HIMS.
? Ensure the HIMS is meeting KKUH’s policies and patients’ needs.
? Attend internal and external committees in regard to health information.
? Provide training and support in regard to health information.
Deputy Manager of HISM

• Provide assistance and support to the HIMS Manager in strategic planning, financial and material resources.
• Evaluate the HIMS policies and procedures and discuss them with the Manager and coordinators.
• Provide consultation and advice to health care professionals regarding health information.
• Ensure safety is adopted in the HIMS and comply with occupational safety.
• Provide statistical information that helps to evaluate and develop performance.
• Organize and perform training programs related to health information.
• Responsible for training health information management students.
• Perform any duties as required.
• Manages the operational aspects of the Health Record Management Service (HRMS) in KKUH to ensure an efficient and effective service.
• Provides administrative support to the HRMS Manger including physical and human resource requirements and health information professional issues.
• Provides advice to the Manager in developing and reviewing HRMS policies and procedures.
• Co-ordinates and directs section Coordinators and Senior Staff in the design, implementation, monitoring and evaluation of continuous quality improvement related to the Service.
• Ensures consistency in the application of HRMS policies, standards, procedures and systems, and provides appropriate training and development for staff to comply with the standards.
• Provide professional advice to KKUH staff (nursing, medical, allied health, administrative) with regard to design and review of the patient health record and associated forms and systems.
• Provide strategic advice to senior hospital management on confidentiality, privacy and legal matters / issues concerning patient information.
• Develops and contributes to the development and implementation of an electronic health record and document management strategy and systems for KKUH and wider health sector.
Manager of Medical record department

Job Summary:

2.1 The organization and management of all Areas/Sections of the department (MRD).

2.2 The organization and management of all types of progressive meetings and
solution of the problems relating to the necessities of Medical Records Department with the Deputy Medical Director.

2.3 The organization and management of all types of progressive meetings and

solution of the problems relating to the medical documents, physicians, nurses and other necessities with the Deputy Medical Director.
2.4 The organization and management of all types of progressive meetings and

solution of the problems relating to the medical documents, physicians, nurses and other necessities with the Director of Medical Director.
2.5 The organization and management of all types of progressive meetings and

solution of the problems relating to the medical documents, nurses and other
necessities with Nursing Director or his/her designee under the supervision of
Deputy Medical Director.
2.6 The organization and management of all types of progression and solution of the problems relating to medical documents and other necessities with all Medical Departments under supervision Deputy Medical Director.

2.7 The organization and management of all types of progression and solution of the problems with Non-medical departments relating Medical Records Department.

2.8 The formulating and updating of department’s Policy & Procedure relating to the department requirements in liaison with the other departments of the hospital under the command of Deputy Medical Director. These reviews are to be done periodically depending upon the necessity.

3.1 Responsible for the overall administration of the Medical Record Department.

3.2 Ensure that confidentiality of patient records is maintained by the department.
3.4 Design and establish training program for students from other institutions.

3.5 Participate on various hospital committees such as Medical Records Committee and Represent department interests.

3.6 Responsible for long term planning of department functions, staffing and equipment needs.

3.7 Evaluate performance of staff reporting to Director.

3.8 Evaluate the quality and effectiveness of medical record services.

3.9 Assure that department policies and procedures are accurate and up to date.

3.11 Ensure that working environment is safe.

3.12 Assist in recruiting qualified personnel

Assistant Manager Medical records

Duties and Responsibilities:

3.1. Serve as Acting Director in absence of the Director.

3.2. Provide in service education for all staff in allocated areas, with an emphasis on cross-training between the different areas.

3.3. Participate in formulating and revising policies and procedures.

3.4. Provide statistical and other reports on a regular basis, as required by Administration, The Medical Staff etc.

3.5. Assign such duties as deemed necessary to the staff and re-assign duties in the event of staff absence.

3.6. Maintain a working relationship with the staff in the clinical areas, so as to minimize problems in patient care.

3.7. Report any unsolved or impending problems to the Director of Medical Record department.

3.8. Maintain a daily list of missing medical records and any other problems.

3.9. Participate in the evaluation of staff performance.

3.10. Plan and assign vacation of the staff in file room.

3.11. Maintain confidentiality of patient’s records.
3.12. Take care of equipments in the department.

3.13. Maintain equipment in proper working order.

3.14. Demonstrate awareness of safety in the department.

3.15. Re-assign staff to cover for unplanned absences.

3.16. Undertake counseling activities as necessary.

3.17. Prepare staff schedule including vacation coverage.

3.18. Supervise students when assigned.

3.19. Other duties as assigned.

File room supervisor
Duties and Responsibilities:

3.1. Confirm to the departments and hospital’s policies and procedures.

3.2. Organize daily activities in the filing area and to maintain an even distribution of work through-out the day.

3.3. Assign such duties as deemed necessary to the staff and re-assign duties in the event of staff absence.

3.4. Prepare a monthly work schedule for staff.

3.5. Maintain a working relationship with the other File room supervisor and together coordinate the activities of all three shifts.

3.6. Maintain a working relationship with the staff in the clinical areas, so as to minimize problems in patient care.

3.7. Report any unsolved or impending problems to the Director of Medical Records department.

3.8. Maintain a daily list of missing charts and any other problems.

3.9. Participate in the evaluation of staff performance.

3.10. Plan and assign vacation of the staff in file room.

3.11. Maintain confidentiality of patient’s records.

3.12. Take care of equipments in the department.

Coordinator of Admission discharge office
1- Coordinates the application and data entry process to ensure efficiency
2- Coordinates activities related to admission of patients in hospital or other medical facility: Confers with physicians, and nursing, housekeeping, transport, and other staff members to coordinate and schedule admission of patient.

3- 3) Prepares records of admission, transfer, and other required data.

4- 4) Notifies departments of patient’s admission.
5- Serves and protects the hospital community by adhering to professional standards, hospital policies and procedures, federal, state, and local requirements, and jcaho standards.
6- Monitors admitting trends by maintaining various categories of statistical data for utilization within internal reporting systems.
7- Enhances patient care delivery system by implementing admissions function interface with the nursing and professional staff
8- Serves and protects the hospital community by ensuring adherence to professional standards, hospital policies and procedures, federal, state, and local requirements
9- Reviews clerical work of interviewers and other personnel.
10- Communicate with Emergency department all the day.
Manager of Emergency department

1- Responsible about ED in front of Medical Director & Hospital Director
2- Coordinate work in ED, manpower distribution, staff relation to other hospital staff (like soci al worker, security etc.) public and administration, staff emergency & vacation leaves (ED Doctor), problem solving
3- Assess ED work, staff practice, and try to formulate & implement ways to improve the department).
4- Acts as ED controller in disaster condition
5 . Helps ED staff in difficult decision making.
6 . Implement to the ED staff every policy.
7 . Supervise medical trainee practice in ED.
8 . Admission right (to referral ROD).
9 . Supervise ambulance policy its working condition and readiness.
10 . Ensure that registration of patient and issuing ED form for all emergency patient attending for care.
11 . Ensure that completing patient personal data
12 . Care of filing system and movement of reports & ED statistic making.
13 . Ensure and checking the processes for ED admission

Supervisor of Physician dictation room
Duties and Responsibilities:

3.1 Scrutinize for deficiency of the completed files received from the Processing Unit.

3.2 Update deficiency regarding discharge summaries and medical reports.

3.3 Liaise with the medical staff for completion of their medical records.

3.4 Supervisor in this unit should liaise with the Supervisor of Main Filing Section to pull the pending files (if any) of the doctors (request lists) for
completion of records.

3.5 Once updated information is available and deficiency is filled, medical records against the medical staff is being deleted for processing of vacation and clearance is provided.

3.6 Coordinate with physicians intending to conduct a research. All physicians are requested to fill the form (find attached form) with the Consultant’s Name or Department Head’s approval. The form is to be presented to the Director of Medical Records for approval to the get the disease Code and for pulling the files from the Main Filing Section.

3.7 Files after collection of data for research by the Physicians are to be returned back to the Main Filing Section.

3.8 The Supervisor/ clerk of this unit should inform all the Physicians about their pending files and remind them as well to complete their records.

7. List the committees on which the Manager and other senior staff are members. Include position held; function of the committee; how often meets; if internal or external. Suggested activity: Attend a relevant committee meeting and read the terms of reference. (350 words)
The health information managers and deputy managers appear in various internal and external committees. Often the internal committees identify issues within the patient information service department at KKUH and develop an action plans to address the departmental concerns. The external committees serve as forums to discuss issues, policies and procedures related to the management of health information management at a broader level and involve representative panel members from other government owned hospitals and the department of health.

External committees
1 Health Information management committee- The committee members meet every two months with members from the Department of Health , they discuss issues relevant to the management of health information. Recent committee meetings have discussed new electronic health record projects. The meeting is usually attended by one of the patient information managers.
2 Computer systems committee-The deputy managers attends this committee meeting held monthly at health information network. The committee discusses issues related to computer systems such as new functions or upgrades, bugs in topaz or merits and possible solutions for downtime and other problems that arise.

Internal meeting
Department meeting- bi-monthly meeting attended by the deputy managers, mangers of patient information, clerical supervisor and freedom of information officer to discuss the issues across the department and possible solutions. Some of the issues discussed in the internal meeting included quality, reviewing an orientation pack provided to all new staff, setting new planner goals and discussing the implementation of a new staff satisfaction survey .

1. Health record clerk meeting- bi-monthly, meeting with all the health record clerks to discuss any suggestions/ issues staff may have.

2. Clinical coding meeting-bi-monthly , meeting with all the clinical coding staff and mangers of patient information service to discuss issues or new coding procedures( as per HMDS reference manual)

3. Ward clerk meeting- held yearly
4. Quality – discuss new implementations and activities in relation to meeting the accreditation standards. The meeting occurs during accreditation period, the manager of patients information is the departmental representatives.

8. Obtain a floor plan of the Health Information Management Department. If no plan is available, prepare one either on paper or electronically. Discuss the Department in terms of design, workflow, the impact these have on staff and the availability of storage space. Suggested activity: Undertake an ergonomics review of this area: consult with staff and make recommendations for any improvements. (Around 570 words).

Ground floor: Main Room Filing area, Checking Area with for 4 medical records Professionals, reception 2 clercks,

First floor (Level 1): all offices, another reception to deal with receive and to send the file to wards or nurses,

Second floor (Level 2): Alternative storage for inactive files or expired files, scanning medical records,
At KKUH, the HIMS department has been designed to optimize space while providing the best arrangement for the rapid achievement of tasks. HIMS department plan, to some extent, is communicated to all KKUH staff as HIMS is one of the most important areas of the hospital and because of that the policy of hospital is intended to provide a guideline for all Hospital staff regarding the correct handling of confidential information. The departmental plan takes into account that HIMS information is contained in paper medical record and information contained on computer systems.

Despite these efforts, according to staff, the area where medical records are stored now is not efficient enough for record filing requirements of KKUH. There is inadequate space to file the health records in the filing area. Some files were placed on the ground; others were filed on the top of shelves. The current store which has been used for some time, is too small, which has forced the department to store their records in alternative and distant areas. According to the staff, this is time consuming especially looking for specific record and leads to work which is demanding and involves the timetabling of task outside general office hours. Thus, staff are required to be working there during working hours and after hours. Another one of the problems which the department faces is the need for offsite storage. This requirement means additional procedures and additional time both in sending and collection of data. These procedures most of the time affect patient’s health care quality and efficiency.

There are two location for medical record department. One of them is in the outpatient building, near from medical record department, and all workers there is male. Another one is in medical record department and all workers is female and this is will help for workflow in the HISM department.
The male worker will receive patient’s request and then contact with female worker to start to supply the medical report for patients.

The elevator inside medical record department is not working since 2013 and this is will not enhance the workflow. All staff use the stair inside the department or the elevator which is outside the department when they need to send any files to level one (Manager or deputy manager, processing, coding, dictaction, medical report, loose report, secretary, repair areas and reception of medical record department).

The elevator will serve all staff on ground floor and level 1 and 2 and they do not need to open the door on ground floor for all time. When they fix elevator they will enhance the privacy and security of patients’ information.
The door, which is located on the first floor is closed all day and all staff must have access from Safety and Security Department. On the other hand, the door, which is located on the ground floor is open in the morning and evening time and some patients walk in the medical records department.
This violates the regulations and legislation in the hospital and causes loss of privacy and the confidentiality of patients’ information.

9. Review occupational health and safety issues within the Health Information Management Service. What legislation is involved? Comment on any hazards (real and potential) and the measures in place to limit these and comply with regulations (e.g., safety representative positions, fire exits and drills, pest control, equipment etc.). (Around 550 words)
Occupational Health & Safety (OHS) protects workers from hazards and ensures safe and healthy working conditions.

Under legislative requirements the patient information service managers have the responsibility of providing a safe and healthy environment to all employees, eliminating hazards as much as possible and ensuring that Occupational Health and Safety (OHS) are incorporated across the department. For example, all new employer at KKUH must attend the orientation programs which include information related to OHS.

Employees are responsible for protecting their own health and safety, and that of patients, colleagues and the public by identifying and reporting hazards, reporting incidents/accidents, using personal protective equipment supplied or required and complying with established safer work practices, procedures and reasonable instructions.
Regarding the hazards within the HIMS workplace, staff informally interviewed made reference to the physical risks. These hazards were relating to the filing and storing of numerous patients’ medical records, and are managed day to day by the Medical Records Officers in the Medical Records Office (MRO). The use of trolleys and other support devices is governed by setting policy.
There are no Fire extinguisher in the Main Filing Room in Medical record department at KKUH. Also, there are no ventilation and staff cannot open the windows.

In my view, the HIMS Department should perform internal audits by safety staff. I did not see any first aid. Therefore, it is mandatory to determine the first aid needs of the workplace and put together first aid kits and establish a protocol to check and replace them regularly. The OHS can be enhanced by rewarding departments that follow and adapt the OHS regulations. I would encourage the HIMS manager to perform sample emergency response plans in order to increase risk awareness.
To promote safe work practices and to ensure that a safe work environment is maintained for employees who install, repair, or maintain energized electrical equipment.
Departments and units that use portable or stationary electrical equipment, appliances, flexible cords, or adapters must ensure the equipment and operation is safe by properly inspecting, maintaining, and using the equipment in accordance with the manufacturer’s recommendations and all applicable codes, standards, and policies.
Smoking in prohibited in the Medical Records Department to prevent fire or disaster.

In the event of fire in the department, employees should close all the doors as they leave.

The first person/staff receiving news of the fire shall report it to:
All fire protection doors must be kept closed at all times.

Fire extinguisher must be located in an easily accessible place.

In the event of a public disaster, the Director of the department shall call in for active duty support. Staff would work at whatever level of duties are assigned and once released from the disaster would report back to the Director, Medical Records Department fo

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INSTRUCTIONS

INSTRUCTIONS
This is an individual exam, which should not be discussed or reviewed with any other person, nor should anyone else write, in whole or in part, any response to this take-home exam. This is an examination of your knowledge of and facility with integrating the course material. As the responses you submit are to be yours and yours alone, you are not expected to research or retrieve data from independent sources not already provided. However, should you refer to the work of others in your response (i.e. academic literature, news items or on-line sources, etc.) please make appropriate citation using one of the accepted citation formats (i.e. Chicago, APA) and include a bibliography at the end of the exam.
You are reminded that plagiarism is a violation of academic integrity and has serious consequences. The University Senate defines plagiarism in the regulations on instructional offenses as: “to use and pass off as one’s own idea or product work of another without expressly giving credit to another.”
When using, and/or summarizing the ideas and words of another, be it from a web site, a written text, lecture or discussion group you must identify the source. Should you choose to use the exact words of another, you must acknowledge these words as such by enclosing them within quotation marks. However, be aware that it is not acceptable to copy large chunks from a source, even if you reference it correctly. Failing to acknowledge sources through the use of proper citations is plagiarism. Any cooperation or collaboration with another person in the completion of this take-home exam will be considered a violation of academic integrity.
This examination has six (6) questions to which you must respond, as follows:
(A) Please keep your response below 4,000 words (excluding references and appendices) in total.
(B) While point form is permitted, please make sure your comments and arguments fully respond in a coherent manner that may be followed by the reader. Respond to each question separately (identifying it by number; responses are required to all questions).
(C) Format using a 12 point font, with at least one inch margins all around and line spacing of at least 1.5. Insert your name and student number as a header on each page, paginate, print double sided (if possible) and staple together.
(D) Submit paper copy at beginning of class on November 12th, 2015, as well as upload to cuLearn (word file (not pdf) with file label of last name, first name, SecAorB).
(E) Late submissions may not be marked. Should you be unable to upload to cuLearn, exceptionally you may e-mail me (laura.ierfinoblachford@carleton.ca) your responses prior to the deadline, and then proceed to finalize upload to cuLearn.
CINEPLEX INC.
This case is available at IVEY PUBLISHING: 9B15D008
(Author(s): Peter Hryniak with support from D. Pupulin and J. Haywood-Farmer)

Additional background information to consider:

Accessible from Library:

Cineplex Audited Annual Reports, Feb. 11, 2015 as at December 31, 2014

Please refer to this report for financial statement information
http://irfiles.cineplex.com/reportsandfilings/annuallyquarterlyreports/2015/03-31-2015-Cineplex-2014-Annual-Report.pdf
Please note that you may need to cut and paste this link into web browser to open link.

You may also search for Cineplex’s 2014 annual report through SEDAR (Feb. 11, 2015). SEDAR is found through the Carleton Library (Go to Main Library Page, course guides, STGY5900, company information, SEDAR).

Recent Cineplex and other news reports from Forbes and Fortune – see appendix A that follows

CASE EXAM QUESTIONS:

1. Identify key characteristics of the Canadian film exhibition industry utilizing Porter’s five-forces framework to assess the industry attractiveness. Identify the key risk factors and how they apply to Cineplex Inc..
2. What opportunities and threats does Cineplex face and how has it responded to those opportunities and threats?
3a. Considering Porter’s generic business strategies, what business strategy has Cineplex used in the film exhibition industry (explain your rationale behind choice)?
3b. What do you perceive to be Cineplex’s strengths and weaknesses (use Porter’s value chain to analyze strengths and weaknesses)?
4. Considering Porter’s value chain and drawing upon the resource based view, what are Cineplex Inc.’s core competencies that may potentially provide competitive advantage?

5. Based on your analysis of Cineplex’s current operations, including the firm’s current financial situation (Cineplex 2014 Annual report see supplementary information above), what growth priorities would you recommend?

6. If you are advising Cineplex’s Board of Directors on a future direction, what changes to their current business model and/or to their corporate strategy, if any, would you recommend? Consider the current growth strategy as well. Support with your financial as well as strategic analyses, along with the theoretical foundations underlying your arguments.
Note: You may view some of the questions as being vague. They have been worded this way to determine your ability to use the course material and synthesize with it in the absence of specific direction.
Reminder: While there are no right or wrong answers, supporting your responses with strategic frameworks/concepts demonstrates your ability to think strategically.

This is an individual exam which should not be discussed or reviewed with any other person, nor should anyone else write, in whole or in part, any response to this take-home exam.

Appendix A – Cineplex 2015 news items (as per sources identified)
Global ESports revenues to surpass $1.9 billion by 2018
Author Information
By John Gaudiosi. Fortune Magazine. OCTOBER 28, 2015

http://fortune.com/2015/10/28/global-esports-revenues-nearing-2-billion/

If cannot open articles with link, search article using article title with Google or cut and paste link into the web browser.

Cineplex invests $15M into eSports gaming plans
Gaming events play to full arenas, stadiums in some countries
Author Information
By Peter Henderson, The Canadian Press Posted: Sep 18, 2015

Fans react during The International Dota 2 Championships at Key Arena in Seattle, Wash. Cineplex is hoping to host a number of competitive gaming events to bring more bodies back to theatres. (Jason Redmond/Reuters)

The operator of Canada’s largest chain of movie theatres is moving further into the world of competitive electronic gaming, announcing some $15 million US in investments on Thursday that will see so-called eSports competitions playing out on Cineplex stages across the country.
Cineplex Entertainment Inc. (TSX:CGX) will pay $10 million US to acquire the assets of WorldGaming, which has a platform used for tournaments and leagues for the competitive gaming community.
It will also invest a further $5 million US to created a new competitive gaming league that will operate and oversee future tournaments at Cineplex theatres across the country, with the first competitions beginning in October.

The games will take place on theatre stages, in front of a big screen and as an audience watches, while also being streamed to other Cineplex venues. Enthusiasts can also sign up to play.
Big international matches will also be live-streamed into Cineplex movie screens in an effort to utilize infrastructure during slow periods.
Cineplex CEO Ellis Jacob said the investment will help the company reach a younger demographic whose attention is being pulled away from its movie theatres by the wealth of available digital content.
He said the company wants to make its theatres a destination for all kinds of entertainment, and that the social aspects of competitive gaming make it a perfect fit for Cineplex.
“People want to be face to face with each other and compete, and other people want to watch them play,” he said.

Jacob said competitive gaming, also known as eSports, could be a huge market in Canada, pointing to places such as South Korea and Japan where eSports events can sell out stadiums. Cineplex hopes one day that its eSports promotion can sell out the Air Canada Centre.
“It’s very big phenomenon and I think that all that is needed in Canada is for a brand like ours to embrace it and work with other companies on promotion,” he said.
Cineplex spokeswoman Pat Marshall said the gaming league will involve local tournaments, regional qualifiers and national tournaments for a variety of eSports titles. Details are expected to be announced in the coming weeks.

The worldwide eSports industry, buoyed by the popularity of titles such as League of Legends and Counter-Strike: Global Offensive, is worth around $613 million US, according to SuperData Research.
Advertisers salivate over the demographics of the gaming community, with Coca-Cola signing up to be a leading sponsor of Riot Games’ League of Legends tournaments in the United States.
Difference Capital Financial Inc. (TSX:DCF), which is the majority investor in WG Ltd., said it will receive $6.4 million for its stake. Its shares soared more than 27 per cent, or 16 cents, to closed at 75 cents on the Toronto Stock Exchange.
Cineplex shares rose 24 cents, or half a per cent, to $47.38.

Canaccord Genuity analyst Aravinda Galappatthige said Cineplex is smart to diversify, and that its small investment in competitive gaming could have big returns.
“There’s very little money down, very little risk,” he said. “You use your name and brand and reach to leverage in Canada on a trend that seems to be quite a phenomenon across the world.”
Galappatthige said Cineplex has an opportunity to centralize the fragmented world of eSports promotion and fan base in Canada and increase visibility for competitive gaming.
“With a big name like Cineplex taking leadership, setting up a league and approaching it in a more structured way, you’ll probably see more results,” he said.

Sten Dragoti, who co-founded Windsor-based eSport Gaming Events in 2013, said the biggest challenge for the industry is being taken seriously by the large corporate sponsors that dominate traditional sports.
“They didn’t grow up with this but they’re starting to come around,” he said.
Dragoti said he often has to explain to executives the importance and popularity of competitive gaming, using examples such as the $18.5-million US prize pool split between the winners at the International tournament for the game Dota II in August, with a Vancouver man part of a six-person team that took home the top $6.6 million US prize.
“You can’t ignore that kind of money,” he said. “I think eSports isn’t just a fad, it’s here to stay.”

$10 Million Acquisition Will Bring eSports To The Big Screen
Author Information
D Heltner, Forbes, Sept. 17, 2015
Author(s): D. Heitner
Source: Forbes.com. 9/17/2015,.

http://www.forbes.com/sites/darrenheitner/2015/09/17/10-million-acquisition-will-bring-esports-to-the-big-screen/

This article reports on Cineplex’s acquisition of Worldgaming’s operational assets to get into e-sports.

Theatrical Release Windows Shrink With New Paramount Deal
Author Information
Bartyzel, M. Jul. 8, 2015 Forbes
http://www.forbes.com/sites/monikabartyzel/2015/07/08/theatrical-release-windows-shrink-with-new-paramount-deal/
Article discusses additional shrinking of release windows by Movie studios.
Please note that if cannot open article with link do a Google search using the title.
Cineplex Plans Entertainment Complex With Live Music, Comedy, Games
Cineplex Plans Entertainment Complex With Live Music, Comedy, Games
Author Information
By David Friend, The Canadian Press, Jan. 26, 2015
http://www.huffingtonpost.ca/2015/01/26/cineplex-entertainment-complex_n_6547144.html

TORONTO — Cineplex Entertainment is looking beyond Hollywood with a new concept that combines arcade games and live performances. The country’s biggest movie theatre chain said Monday it plans to launch The Rec Room later this year in Edmonton as part of a pilot project that will ramp up to a bigger expansion.
Each location will have space for a restaurant and bar, as well as an array of entertainment options, like an arcade and an auditorium for live music and comedians. The company is also considering other games like bowling, billiards and ping pong. The idea is in the vein of restaurant and arcade chains in the United States like Latitude 360 and Dave and Buster’s.
“When you look at Canada we really don’t have a location-based social environment where people can game, have a meal, watch (sports), all of those kinds of things that create a destination,” chief executive Ellis Jacob said in an interview. “It allows us to capitalize on our strength, from our infrastructure to the assets we’ve built up.”
The first Rec Room will open late this year adjacent to an existing Cineplex theatre at the South Edmonton Common shopping centre.
Another 10 to 15 locations will follow in major cities across the country over the next several years, though they won’t necessarily be next to a movie theatre, Jacob said.
Cineplex already operates 18 Xscape Entertainment Centres with popular arcade games and billiards. Some of the locations also have lounges with liquor licences. What makes the Rec Room different is the broader game and food selection, and the large digital screens, Jacob said. He hopes Cineplex can tap into the rising popularity of video game tournaments on the big screen, where audiences gather to battle each other playing Xbox 360 and PlayStation 4 games.
Cineplex also owns an advertising business and premium-priced movie theatres. The company has been focused on diversifying its business to lessen the impact of the volatile movie industry, which thrives on blockbuster hits but falters when a big movie tanks.
Last month, Cineplex backed out of screening the controversial Seth Rogen movie “The Interview” when hackers threatened terrorist attacks at theatres showing the comedy. While Cineplex said it only planned to postpone screenings, the company decided against showing it at all when Sony Pictures made “The Interview” available to rent and buy online.

Empire to Focus Sobeys, sells Theatres to Cineplex, Landmark
Author: Bertrand Marotte
The Globe and Mail
Published Jun. 27, 2013

“Empire Co. Ltd. is exiting the movie-theatre business as it narrows its focus on its grocery business after the recent deal to buy Safeway Inc.’s Canadian stores.
Stellarton, N.S.-based Empire said it has struck two separate deals to sell 46 movie theatres in Atlantic and Western Canada as well as Ontario.
This is a catch-all ASF view; only displays when an unsupported article type is put in an ASF drop zone
In a $200-million transaction, Cineplex Inc. will acquire 24 Empire theatres in Atlantic Canada – 13 in Nova Scotia, six in New Brunswick, three in Newfoundland and Labrador and two on Prince Edward Island – and two in Ontario.
Meanwhile, Western Canada theatre operator Landmark Cinemas Inc. plans to buy 20 Empire locations in Ontario and Western Canada in an agreement valued at $55-million.
For Toronto-based Cineplex, the agreement broadens its national presence, with a foothold in Atlantic Canada.
Empire president and chief executive officer Paul Sobey said in a news release Thursday the decision to sell the movie-theatre division “aligns with the strategic direction of the company to focus our resources on our food retail business through our 100 per cent interest in Sobeys Inc. and on our related real estate investment through our 42.8 per cent ownership interest in Crombie REIT.”
Empire, the country’s No. 2 grocery chain, said it intends to use proceeds of about $216-million for debt repayment.
Ellis Jacob, president and CEO of Cineplex, said in a statement: “This is a significant event for Cineplex, as the acquisition will provide our company with a truly national, coast-to-coast presence.

“This acquisition is an excellent strategic fit for Cineplex. It provides us with a presence in Atlantic Canada and it will enable us to leverage our existing businesses to maximize shareholder value.”
Empire will have four theatres left, and two of those will be sold in real estate transactions, while a decision on what to do with the remaining two will be made when their leases expire later this year, Sobeys said.
Empire also said on Thursday that it posted fourth-quarter profit of $98.6-million, or $1.45 per share of adjusted earnings, up from $89.6-million, or $1.32, in the year-earlier period.
Sales reached $4.31-billion, up $235.1-million, or 5.8 per cent.
Empire said this month that Sobeys has struck an agreement with Safeway to buy all of its Canadian assets for $5.8-billion.
The deal includes 213 full-service grocery stores in Western Canada and 199 in-store pharmacies.
“Fiscal 2013 was a solid year,” Mr. Sobey said on a conference call Thursday.
Marc Poulin, president and CEO of Sobeys, said the current pricing environment is tough.
“We have to adjust prices to remain competitive in the marketplace,” he said” on the call.
“Overall, we’re seeing a very competitive market where people are playing their promotional cards real hard,” he said.
Retailers are “trying to bring a surprise to market every week” in hopes of luring shoppers, said Mr. Poulin, adding that the environment is one of “fickle consumers and lots of square footage being added to the marketplace.”
Among the increasing competition are more food merchandising at Wal-Mart Stores Inc. and the arrival of Target Corp. in Canada.”

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Comments are closed.

INSTRUCTIONS

INSTRUCTIONS
This is an individual exam, which should not be discussed or reviewed with any other person, nor should anyone else write, in whole or in part, any response to this take-home exam. This is an examination of your knowledge of and facility with integrating the course material. As the responses you submit are to be yours and yours alone, you are not expected to research or retrieve data from independent sources not already provided. However, should you refer to the work of others in your response (i.e. academic literature, news items or on-line sources, etc.) please make appropriate citation using one of the accepted citation formats (i.e. Chicago, APA) and include a bibliography at the end of the exam.
You are reminded that plagiarism is a violation of academic integrity and has serious consequences. The University Senate defines plagiarism in the regulations on instructional offenses as: “to use and pass off as one’s own idea or product work of another without expressly giving credit to another.”
When using, and/or summarizing the ideas and words of another, be it from a web site, a written text, lecture or discussion group you must identify the source. Should you choose to use the exact words of another, you must acknowledge these words as such by enclosing them within quotation marks. However, be aware that it is not acceptable to copy large chunks from a source, even if you reference it correctly. Failing to acknowledge sources through the use of proper citations is plagiarism. Any cooperation or collaboration with another person in the completion of this take-home exam will be considered a violation of academic integrity.
This examination has six (6) questions to which you must respond, as follows:
(A) Please keep your response below 4,000 words (excluding references and appendices) in total.
(B) While point form is permitted, please make sure your comments and arguments fully respond in a coherent manner that may be followed by the reader. Respond to each question separately (identifying it by number; responses are required to all questions).
(C) Format using a 12 point font, with at least one inch margins all around and line spacing of at least 1.5. Insert your name and student number as a header on each page, paginate, print double sided (if possible) and staple together.
(D) Submit paper copy at beginning of class on November 12th, 2015, as well as upload to cuLearn (word file (not pdf) with file label of last name, first name, SecAorB).
(E) Late submissions may not be marked. Should you be unable to upload to cuLearn, exceptionally you may e-mail me (laura.ierfinoblachford@carleton.ca) your responses prior to the deadline, and then proceed to finalize upload to cuLearn.
CINEPLEX INC.
This case is available at IVEY PUBLISHING: 9B15D008
(Author(s): Peter Hryniak with support from D. Pupulin and J. Haywood-Farmer)

Additional background information to consider:

Accessible from Library:

Cineplex Audited Annual Reports, Feb. 11, 2015 as at December 31, 2014

Please refer to this report for financial statement information
http://irfiles.cineplex.com/reportsandfilings/annuallyquarterlyreports/2015/03-31-2015-Cineplex-2014-Annual-Report.pdf
Please note that you may need to cut and paste this link into web browser to open link.

You may also search for Cineplex’s 2014 annual report through SEDAR (Feb. 11, 2015). SEDAR is found through the Carleton Library (Go to Main Library Page, course guides, STGY5900, company information, SEDAR).

Recent Cineplex and other news reports from Forbes and Fortune – see appendix A that follows

CASE EXAM QUESTIONS:

1. Identify key characteristics of the Canadian film exhibition industry utilizing Porter’s five-forces framework to assess the industry attractiveness. Identify the key risk factors and how they apply to Cineplex Inc..
2. What opportunities and threats does Cineplex face and how has it responded to those opportunities and threats?
3a. Considering Porter’s generic business strategies, what business strategy has Cineplex used in the film exhibition industry (explain your rationale behind choice)?
3b. What do you perceive to be Cineplex’s strengths and weaknesses (use Porter’s value chain to analyze strengths and weaknesses)?
4. Considering Porter’s value chain and drawing upon the resource based view, what are Cineplex Inc.’s core competencies that may potentially provide competitive advantage?

5. Based on your analysis of Cineplex’s current operations, including the firm’s current financial situation (Cineplex 2014 Annual report see supplementary information above), what growth priorities would you recommend?

6. If you are advising Cineplex’s Board of Directors on a future direction, what changes to their current business model and/or to their corporate strategy, if any, would you recommend? Consider the current growth strategy as well. Support with your financial as well as strategic analyses, along with the theoretical foundations underlying your arguments.
Note: You may view some of the questions as being vague. They have been worded this way to determine your ability to use the course material and synthesize with it in the absence of specific direction.
Reminder: While there are no right or wrong answers, supporting your responses with strategic frameworks/concepts demonstrates your ability to think strategically.

This is an individual exam which should not be discussed or reviewed with any other person, nor should anyone else write, in whole or in part, any response to this take-home exam.

Appendix A – Cineplex 2015 news items (as per sources identified)
Global ESports revenues to surpass $1.9 billion by 2018
Author Information
By John Gaudiosi. Fortune Magazine. OCTOBER 28, 2015

http://fortune.com/2015/10/28/global-esports-revenues-nearing-2-billion/

If cannot open articles with link, search article using article title with Google or cut and paste link into the web browser.

Cineplex invests $15M into eSports gaming plans
Gaming events play to full arenas, stadiums in some countries
Author Information
By Peter Henderson, The Canadian Press Posted: Sep 18, 2015

Fans react during The International Dota 2 Championships at Key Arena in Seattle, Wash. Cineplex is hoping to host a number of competitive gaming events to bring more bodies back to theatres. (Jason Redmond/Reuters)

The operator of Canada’s largest chain of movie theatres is moving further into the world of competitive electronic gaming, announcing some $15 million US in investments on Thursday that will see so-called eSports competitions playing out on Cineplex stages across the country.
Cineplex Entertainment Inc. (TSX:CGX) will pay $10 million US to acquire the assets of WorldGaming, which has a platform used for tournaments and leagues for the competitive gaming community.
It will also invest a further $5 million US to created a new competitive gaming league that will operate and oversee future tournaments at Cineplex theatres across the country, with the first competitions beginning in October.

The games will take place on theatre stages, in front of a big screen and as an audience watches, while also being streamed to other Cineplex venues. Enthusiasts can also sign up to play.
Big international matches will also be live-streamed into Cineplex movie screens in an effort to utilize infrastructure during slow periods.
Cineplex CEO Ellis Jacob said the investment will help the company reach a younger demographic whose attention is being pulled away from its movie theatres by the wealth of available digital content.
He said the company wants to make its theatres a destination for all kinds of entertainment, and that the social aspects of competitive gaming make it a perfect fit for Cineplex.
“People want to be face to face with each other and compete, and other people want to watch them play,” he said.

Jacob said competitive gaming, also known as eSports, could be a huge market in Canada, pointing to places such as South Korea and Japan where eSports events can sell out stadiums. Cineplex hopes one day that its eSports promotion can sell out the Air Canada Centre.
“It’s very big phenomenon and I think that all that is needed in Canada is for a brand like ours to embrace it and work with other companies on promotion,” he said.
Cineplex spokeswoman Pat Marshall said the gaming league will involve local tournaments, regional qualifiers and national tournaments for a variety of eSports titles. Details are expected to be announced in the coming weeks.

The worldwide eSports industry, buoyed by the popularity of titles such as League of Legends and Counter-Strike: Global Offensive, is worth around $613 million US, according to SuperData Research.
Advertisers salivate over the demographics of the gaming community, with Coca-Cola signing up to be a leading sponsor of Riot Games’ League of Legends tournaments in the United States.
Difference Capital Financial Inc. (TSX:DCF), which is the majority investor in WG Ltd., said it will receive $6.4 million for its stake. Its shares soared more than 27 per cent, or 16 cents, to closed at 75 cents on the Toronto Stock Exchange.
Cineplex shares rose 24 cents, or half a per cent, to $47.38.

Canaccord Genuity analyst Aravinda Galappatthige said Cineplex is smart to diversify, and that its small investment in competitive gaming could have big returns.
“There’s very little money down, very little risk,” he said. “You use your name and brand and reach to leverage in Canada on a trend that seems to be quite a phenomenon across the world.”
Galappatthige said Cineplex has an opportunity to centralize the fragmented world of eSports promotion and fan base in Canada and increase visibility for competitive gaming.
“With a big name like Cineplex taking leadership, setting up a league and approaching it in a more structured way, you’ll probably see more results,” he said.

Sten Dragoti, who co-founded Windsor-based eSport Gaming Events in 2013, said the biggest challenge for the industry is being taken seriously by the large corporate sponsors that dominate traditional sports.
“They didn’t grow up with this but they’re starting to come around,” he said.
Dragoti said he often has to explain to executives the importance and popularity of competitive gaming, using examples such as the $18.5-million US prize pool split between the winners at the International tournament for the game Dota II in August, with a Vancouver man part of a six-person team that took home the top $6.6 million US prize.
“You can’t ignore that kind of money,” he said. “I think eSports isn’t just a fad, it’s here to stay.”

$10 Million Acquisition Will Bring eSports To The Big Screen
Author Information
D Heltner, Forbes, Sept. 17, 2015
Author(s): D. Heitner
Source: Forbes.com. 9/17/2015,.

http://www.forbes.com/sites/darrenheitner/2015/09/17/10-million-acquisition-will-bring-esports-to-the-big-screen/

This article reports on Cineplex’s acquisition of Worldgaming’s operational assets to get into e-sports.

Theatrical Release Windows Shrink With New Paramount Deal
Author Information
Bartyzel, M. Jul. 8, 2015 Forbes
http://www.forbes.com/sites/monikabartyzel/2015/07/08/theatrical-release-windows-shrink-with-new-paramount-deal/
Article discusses additional shrinking of release windows by Movie studios.
Please note that if cannot open article with link do a Google search using the title.
Cineplex Plans Entertainment Complex With Live Music, Comedy, Games
Cineplex Plans Entertainment Complex With Live Music, Comedy, Games
Author Information
By David Friend, The Canadian Press, Jan. 26, 2015
http://www.huffingtonpost.ca/2015/01/26/cineplex-entertainment-complex_n_6547144.html

TORONTO — Cineplex Entertainment is looking beyond Hollywood with a new concept that combines arcade games and live performances. The country’s biggest movie theatre chain said Monday it plans to launch The Rec Room later this year in Edmonton as part of a pilot project that will ramp up to a bigger expansion.
Each location will have space for a restaurant and bar, as well as an array of entertainment options, like an arcade and an auditorium for live music and comedians. The company is also considering other games like bowling, billiards and ping pong. The idea is in the vein of restaurant and arcade chains in the United States like Latitude 360 and Dave and Buster’s.
“When you look at Canada we really don’t have a location-based social environment where people can game, have a meal, watch (sports), all of those kinds of things that create a destination,” chief executive Ellis Jacob said in an interview. “It allows us to capitalize on our strength, from our infrastructure to the assets we’ve built up.”
The first Rec Room will open late this year adjacent to an existing Cineplex theatre at the South Edmonton Common shopping centre.
Another 10 to 15 locations will follow in major cities across the country over the next several years, though they won’t necessarily be next to a movie theatre, Jacob said.
Cineplex already operates 18 Xscape Entertainment Centres with popular arcade games and billiards. Some of the locations also have lounges with liquor licences. What makes the Rec Room different is the broader game and food selection, and the large digital screens, Jacob said. He hopes Cineplex can tap into the rising popularity of video game tournaments on the big screen, where audiences gather to battle each other playing Xbox 360 and PlayStation 4 games.
Cineplex also owns an advertising business and premium-priced movie theatres. The company has been focused on diversifying its business to lessen the impact of the volatile movie industry, which thrives on blockbuster hits but falters when a big movie tanks.
Last month, Cineplex backed out of screening the controversial Seth Rogen movie “The Interview” when hackers threatened terrorist attacks at theatres showing the comedy. While Cineplex said it only planned to postpone screenings, the company decided against showing it at all when Sony Pictures made “The Interview” available to rent and buy online.

Empire to Focus Sobeys, sells Theatres to Cineplex, Landmark
Author: Bertrand Marotte
The Globe and Mail
Published Jun. 27, 2013

“Empire Co. Ltd. is exiting the movie-theatre business as it narrows its focus on its grocery business after the recent deal to buy Safeway Inc.’s Canadian stores.
Stellarton, N.S.-based Empire said it has struck two separate deals to sell 46 movie theatres in Atlantic and Western Canada as well as Ontario.
This is a catch-all ASF view; only displays when an unsupported article type is put in an ASF drop zone
In a $200-million transaction, Cineplex Inc. will acquire 24 Empire theatres in Atlantic Canada – 13 in Nova Scotia, six in New Brunswick, three in Newfoundland and Labrador and two on Prince Edward Island – and two in Ontario.
Meanwhile, Western Canada theatre operator Landmark Cinemas Inc. plans to buy 20 Empire locations in Ontario and Western Canada in an agreement valued at $55-million.
For Toronto-based Cineplex, the agreement broadens its national presence, with a foothold in Atlantic Canada.
Empire president and chief executive officer Paul Sobey said in a news release Thursday the decision to sell the movie-theatre division “aligns with the strategic direction of the company to focus our resources on our food retail business through our 100 per cent interest in Sobeys Inc. and on our related real estate investment through our 42.8 per cent ownership interest in Crombie REIT.”
Empire, the country’s No. 2 grocery chain, said it intends to use proceeds of about $216-million for debt repayment.
Ellis Jacob, president and CEO of Cineplex, said in a statement: “This is a significant event for Cineplex, as the acquisition will provide our company with a truly national, coast-to-coast presence.

“This acquisition is an excellent strategic fit for Cineplex. It provides us with a presence in Atlantic Canada and it will enable us to leverage our existing businesses to maximize shareholder value.”
Empire will have four theatres left, and two of those will be sold in real estate transactions, while a decision on what to do with the remaining two will be made when their leases expire later this year, Sobeys said.
Empire also said on Thursday that it posted fourth-quarter profit of $98.6-million, or $1.45 per share of adjusted earnings, up from $89.6-million, or $1.32, in the year-earlier period.
Sales reached $4.31-billion, up $235.1-million, or 5.8 per cent.
Empire said this month that Sobeys has struck an agreement with Safeway to buy all of its Canadian assets for $5.8-billion.
The deal includes 213 full-service grocery stores in Western Canada and 199 in-store pharmacies.
“Fiscal 2013 was a solid year,” Mr. Sobey said on a conference call Thursday.
Marc Poulin, president and CEO of Sobeys, said the current pricing environment is tough.
“We have to adjust prices to remain competitive in the marketplace,” he said” on the call.
“Overall, we’re seeing a very competitive market where people are playing their promotional cards real hard,” he said.
Retailers are “trying to bring a surprise to market every week” in hopes of luring shoppers, said Mr. Poulin, adding that the environment is one of “fickle consumers and lots of square footage being added to the marketplace.”
Among the increasing competition are more food merchandising at Wal-Mart Stores Inc. and the arrival of Target Corp. in Canada.”

Responses are currently closed, but you can trackback from your own site.

Comments are closed.

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