sebastian omilescu sorin fitero group no: 06 sameer ashar03 ravi chhangani11 ramesh mallya30 viral...
TRANSCRIPT
Sebastian OMILESCU
Sorin FITERO
Group No: 06
Sameer Ashar 03
Ravi Chhangani 11
Ramesh Mallya 30
Viral Pandya 36
LARGER THAN LIFE
Company Background
• Idea for IMAX originated in 1967
• First film premiere was in 1970 at the Fuji
Pavilion in Osaka, Japan
• About 295 theatres in 40 different countries
• 50% located in museums, aquariums, zoos,
and other institutions
• By the end of 2007 there were approximately
226 films
The General Environment Analysis Political / Legal
• Influential politicians and family promoted limiting violence, sex, and vulgar language
• Piracy, Copyright Infringement
Economic
• Greatly affected by fluctuation of the economic status of consumers
• Movies : Discretionary Expense
Social
• Age of consumers
• Family
• Edutainment
• Religious Groups
Technology
• Vastly changing in industry
• New film technologies (HD, 3D, Blu-ray, etc)
• Entertainment Available through a variety of Sources
• Cheaper Camcorders
Industry Analysis • Highly competitive industry
• Very few/limited large format film companies
• Theaters became very diluted in the 90’s
• Ticket sales influenced by economy and consumer wallets
Industry Facts
Source: National Association of Theater Owners (NATO), www.natoonline.org; Bureau of Economic Analysis, www.bea.gov; and Bureau of Labor Statistics, www.bls.gov.
Movie Theater Attendance:
1.47 Billion Average Ticket Price:
$7.50
Central Issue
Profitability Poor financial performance Significance decrease in 2005-2007 (Exhibit 5 Net income reduce from 14382 to -26940 rs in thousands dollars )
Could IMAX thrive as a niche player that made large format films and systems?
High Competition, High Substitution, Piracy
Would increasing the number of Hollywood movies released in IMAX format save the firm or dilute the IMAX brand?
-Will IMAX lose its differentiation?
Substitutes
Supplier
New Entrants
Customer
Bargaining power of buyersSubstitute products & services
Existing rivalry in the industry
Porter’s 5 Forces• Low due to the high overhead
and startup costs.
• Low due to expensive costs of movie making, however documentary films much cheaper.
• IMAX keeps customers with solid technical support.
• Unique expensive equipment leads to low supplier power, IMAX is probably one of their few customers.
• Medium amount of buyer power, many different cinema companies both franchise and private. However, no real alternative to IMAX.
• High buyer power, many other companies producing quality movies and films.
• Digital 3D and regular 2D 35mm are strong substitutes to IMAX movies and films.
• Many other much larger companies and studios producing movies and documentaries, often with Hollywood actors and much larger marketing budgets.
Bargaining power of the suppliers
Threat of new entrants
Existing rivalry in the industry
•Competition with Pixar/ DreamWorks / Disney for animated, high quality kid’s films.
•Iwerks is the only rival for large format films, and they focus on ride simulations. IMAX has a strong competitive advantage in technology with their patents.
Porter’s 5 Forces
Strengths •Hardware, Digital Distribution, and Support (46 Patents)•DMR Conversion Technology•Deals with Studios & Theaters•Strong Brand
Weaknesses •Expensive Production of Movies/Hollywood Film Conversion Costs•Limited Exposure/Facilities•Much Smaller than Hollywood Production Studios•Long-Term Debt until 2009
Opportunities •Global Industry•Hollywood Films, 3D Movies•Growing popularity in educational entertainment
Threats •Alternative entertainment sources: Netflix/Internet, Home Video, 3D TV, Red/Blue Box•Movie Piracy
SWOT Analysis
TOWS Analysis
VRIO Framework
Core Competency: Technology & Patents
Sustained Competitive Advantage? Yes.
Our Evaluation
Why was IMAX changing its corporate and business strategies? Could IMAX thrive as a niche player that only made large format films and systems? •Digitally-remastered conversion for Hollywood films
•Revenue-sharing partnerships with theater chains
These strategic moves were made by IMAX to lower its long-term debt. IMAX has strong branding, film industry leverage, and a technological competitive advantage.
Our Evaluation
How would you evaluate the changes? Could increasing the number of Hollywood movies released in IMAX format dilute the IMAX brand?
IMAX made the right strategic business decisions to overcome its debt problem and return to profitability. Increasing the number of Hollywood movies should not dilute the IMAX brand. Today the IMAX brand is more associated with 3D technology and large screen film.1
1 The claim mentioned in the case that the brand’s trustworthiness is tied to institutional settings (educational entertainment) was done in 2000.