Analysis of technology company IMAX Corporation

Company overview

“ IMAX Corporation is one of the universe ‘s prima amusement engineering companies, specialising in immersive gesture image engineerings. The world-wide IMAXA® theater web is among the most of import and successful theatrical distribution platforms for blockbuster movies around the Earth, with IMAX theaters presenting the universe ‘s best cinematic presentations utilizing proprietary IMAX, IMAXA® 3D, and IMAX DMRA® engineering ” ( IMAX Corp. , 2010 ) .

“ The IMAX company is known to be one of the highest quality, most immersive gesture image amusement in the universe. As the IMAX theater web grows, the repute of the IMAX trade name improves every bit good. IMAX theaters are located in both commercial multiplexes and educational establishments throughout the universe. More than one billion people have had An IMAX ExperienceA® since the first IMAX theater opened in 1970. As of September 30, 2010, there were 470 IMAX theaters ( 348 commercial, 122 institutional ) operating in 45 states ” ( BNET, 2010 ) .

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“ As the Company continues to germinate, its possible in the commercial market place evolves excessively. While IMAX remains committed to its roots in museums and scientific discipline centres, the Company is at the same clip quickly spread outing its commercial theater web. IMAX has forged strategic confederations, relationships and joint ventures with some of the most outstanding exhibitioners in the universe, including AMC Entertainment, Regal Cinemas, Inc. , National Amusements, ODEON & A ; UCI CINEMAS, CJ CGV, Wanda Cinema Line Co. Ltd. , Tokyu Cinemas and many more ” ( IMAX Corp. , 2010 ) .

“ The original IMAX growing scheme was to concentrate on the institutional big screen theater market and bring forthing and administering documental manner movies. As a consequence, most of the bing IMAX Theatres are located at establishments such as museums and scientific discipline Centres. In the last 10 old ages, IMAX has changed its focal point to more commercially oriented endeavors. The consequence has been rapid growing in the figure of understandings entered into with commercial operators and operators of non-institutional amusement composites. The IMAX trade name is internationally recognised for extraordinary and immersive household experiences ” ( World ‘s Biggest Screens Pty Ltd. , 2007 ) .

Corporate Scheme

A corporate scheme is one that specifies what type of concern a company is in or wants to be in and what it wants to make with those concerns. It ‘s based on the mission and ends of the organisation. The IMAX ‘s mission statement is given by co-CEO Gelfond:

“ It ‘s designed to present the universe ‘s most immersive film experience ” ( DataMonitor, 2010 )

Current scheme

Vertical Integration

IMAX is works on perpendicular integrating as it works on processing, distribution and exhibition of its ain movies.

IMAX ab initio was focused on big format movies that were educational. This is why the theaters were located in establishments, museums, fish tanks and national Parkss. IMAX ‘s forward integrating took topographic point when it became the distributer of its ain produced movies. IMAX is comparatively little when it is compared to its rival studios and theaters, but it still leads the industry when it comes to bring forthing images in a big format. IMAX non merely plays its ain movies in its theaters, but gives it besides gives its movies to other theaters so that they would be promoted at that place.

As it was earlier discussed, IMAX is chiefly focused on bring forthing big scale movies. To make so, they require particular cameras, projectors, screens, etc. In the past 15 old ages, IMAX has acquired these companies:

Imagination Rentals ( 1995 ) – Whole ownership

Mainframe Entertainment Inc. ( 1999 ) – Minority portions

Sonics Associates Inc. ( 2009 ) – Whole ownership

David Keighley Production ( 2009 )

Digital Projection International Ltd. ( 2000 )

Cinema Plus Ltd. ( 2006 ) ( DataMonitor, 2010 ) .

IMAX has a subordinate company ( 51 % ownership in that company ) – Sonics Associates Inc. , which is an sound development company. It manufactures the sound systems for IMAX. David Keighley Production, which is entirely owned by IMAX, works on the station production of its movies.

Most of the houses mentioned supra are the providers of IMAX. Through integrating, IMAX has reduced the opportunities of providers set uping the monetary values. When IMAX made itself independent in the facets required to present high-quality big format movie, it gained entree to all the new engineering which today is an indispensable component in IMAX ‘s endurance.

Through backward integrating, IMAX has made itself stronger by being its ain provider. It has gained control over the engineering of the systems that produce 2D or 3D movie every bit good as audio systems.

Horizontal Integration

Direct competition

IMAX had merely two rivals that produced movie in the big format. One was Iwerks, another one was Megasystems. IMAX has expanded its operations to the commercial concern ( e.g. change overing 35mm Hollywood movies into big format ) , Iwerks did non make that. It merely limited itself to sit simulation bundles that are located in subject Parkss and museums. Megasystem, which once produced projection systems, has late stopped bring forthing these systems, and it has renamed itself Pollavision. It is now merely involved in consultancy services of the big format movie theatres. IMAX, Iwerks and Pollavision all were the makers of high definition movie projection systems, and the lone organisation left in the market that converts commercial films into big format is IMAX ( SmallCapWatch LLC. , 2010 ) .

Indirect competition

In the market of studios and theatres, IMAX is comparatively little. In my sentiment, it would non impact IMAX if it did non unify with other studios. Its success is due to the fact that consumers have become to the full cognizant of IMAX format films, and there is and increasing demand for watching films in big format. It if merges with one major film studio ( e.g. Disney ) , it will non be easy for it to collaborate with other studios.

A good option for IMAX would be establishing more commercial theaters, where it can run converted big format Hollywood films. This would it enable it to vie against big theaters like Regal Enternaintment Group.

Environmental Analysis

IMAX as a planetary house interacts with multiple factors. The company takes inputs and distributes its end product. Like every organisation, IMAX has its internal and external environment which affects its end product.

Internal Environment


Unique, advanced merchandise

Good location of IMAX theaters

Changing repertory of movies

Educational links ( e.g. schools ; libraries, instructors )

IMAX worldwide trade name consciousness


Documentary manner when there is an increasing demands for other content type

Lack of assortment in films

IMAX ‘s internal environment includes processs and inputs which are used to accomplish its strategic ends. The company has successfully developed 3D cameras and other equipment to bring forth realistic 3D images. Images screened by IMAX are brighter and sharper than those found in conventional film theaters. The company has besides invented new techniques of 3D directional sound, offering its clients both audio lucidity and deepness.

One of the chief focal points of IMAX Corp. is research and development, as it wants to show films utilizing the newest technological methods and systems available on the market. Quite a big part of its gross is redistributed towards R & A ; D portion of its concern.

Deserving mentioning is the fact that IMAX is assist its clients on theatre design, supervises the installing of their systems, trains the full theatre staff, and maintains the installed system.

External Environment


Addition in the demand of Hollywood productions

High popularity of watching IMAX films

Joint ventures with other studios

Opening more IMAX theaters ( using infinite in bing multiplexes or reconfiguring bing manifold screens into IMAX format )

Opening up IMAX theaters in developing states ( e.g. BRIC )

Lack of rivals change overing films into big format

Particular significance given by Motion Picture Association of America to documentary films section


Conventional film

Piracy of films

High quality DVDs and BluRays

Home theater amusement systems

Joint partnerships ( AMC with its ain large screen theaters )

Political intercession

Change in gustatory sensation of the consumer

There are multiple factors that affect IMAX ‘s public presentation. For illustration, clients represent possible uncertainness to IMAX because of their changing gustatory sensations. Knowing this, IMAX should do more educational and amusement films that can be shown in the full screen format. The demand for technologically based and animated films is turning and IMAX ought to see unifying with some larger participants in the industry ( e.g. Pixar ) to be able to carry through the demands of its consumers.

Despite the fact that IMAX has already developed the cognition, accomplishments and capablenesss needed to plan and assemble complicated 3D film systems, most of its equipment is purchased from the contracted parties to whom IMAX has maintained long and normally successful relationships.

Soon, IMAX has to vie with digital overseas telegram suppliers, satellite Television, DVDs, BluRay phonograph record and the cyberspace. All these media give clients a much more extent pick than merely few old ages ago.

One should besides retrieve socio-cultural, political/legal, demographic and technological factors that indirectly affect IMAX ‘s overall public presentation. Movies presented in IMAX theaters should stand for the high socio-cultural content, due to the fact it is largely viewed by university and college educated audiences. Most of the IMAX clients falls in the age scope of 19 to 65, and IMAX ‘s current and future undertakings should carry through desires of that group ( TheStockAdvisors, 2010 ) .

Porter ‘s Five Forces Model

Menace of Substitute Merchandises

Menace of replacement merchandises means that IMAX clients can easy exchange to IMAX ‘s rival merchandise ( Pearce & A ; Robinsons, 2006 ) . IMAX is the largest and most exciting film format, with graphic clear images that are about 10 times larger than traditional film format. There would be a high menace of replacement if there were utility merchandises available against the 1s offered by IMAX. In this instance, clients could easy happen the merchandise or service that IMAX offers at the same or lesser monetary value, and the quality of the IMAX rivals merchandise addition.

IMAX clients can easy exchange to replace merchandises ( e.g. movie film ) , but the screens in IMAX theaters are the biggest in the universe offering and they offer a really different experience than regular screens ( World ‘s Biggest Screens Pty Ltd. , 2007 ) . Sound is besides critical in instance of IMAX experience. The movie soundtracks are delivered through a top of the line digital environment sound system manufactured by Sonics Associates Inc. , which is one of the top companies in sound system design.

Soon it is easy to happen DVD ‘s and VCD ‘s with great declaration. Even in regular film the quality of the jutting movies is first-class. That might be the ground for clients non to travel to IMAX theater and pay an excess $ 4 to $ 5 to watch a film in 3D ( Yahoo! Finance, 2010 ) .

Menace of New Entrants

A new movie industry into the market would besides weaken IMAX ‘s market power. Particular sections are more attractive if there are high entry barriers and low issue barriers. Harmonizing to market research carried out by World ‘s Biggest Screens Pty Ltd. , “ IMAX can prolong its place as a premium film finish non merely because it offers a better experience than other cinema finishs, but because it offers a really original film experience. IMAX is perceived as being at the cutting border of new film that offers new experiences in movie. It is besides about the strong sense of pragmatism of the movie manner which allows costumiers the feeling of finish geographic expedition, which is, in other words, the feeling of “ being at that place ” ” ( World ‘s Biggest Screens Pty Ltd. , 2007 ) .

Industry Competition

Industry competition “ means the strength of competition among the bing movie theaters in the market. Intensity of competition depends on the figure of theaters and their capablenesss ” ( Pearce & A ; Robinsons, 2006 ) . Poor movie line up, combined with the aftershocks of company restructuring in twelvemonth 2000 resulted in low attending figures for IMAX ( World ‘s Biggest Screens Pty Ltd. , 2007 ) . Soon, IMAX ‘s selling aims are “ to let go of a lower limit of 6-8 new movies in each market it operates in, to present a group-sales plan with a focal point on niche visitant groups ( e.g. schools, organized groups ) , and to develop value-based publicities to drive concern in traditionally softer trading periods. These selling aims are traveling to be executed utilizing the full scope of the selling mix ” ( DataMonitor, 2010 ) .

Dickering Power Of Suppliers

Dickering Power of providers means the strength of the place of a movie theater, which isA how much the movie theater ‘s providers have control over increasing the monetary value of supplied merchandises. It ‘s rather obvious that movie selling mix consists of elements. ( i.e. advertisement, promotion & A ; publicities, word of oral cavity, website and e-communications ) ( IMAX Corp. , 2010 ) . Moives are normally released every 2 months in a staggered plan timed to co-occur, where possible, with cardinal school vacation periods. The release of a new movie is the premier driver to attending.

Recently 3D films popularity have gone beyond popularity of 2D movies. However, “ there is a limited supply of 3D movies to take from because they are much more expensive to do ” ( IMAX Corp. , 2010 ) . Movie shapers frequently examine the “ triumph ” of old releases and the likely audience reaction to new 1s. For case, if peculiar a movie did good overseas, it ought to make good in some foreign markets every bit good. Research is conducted on regular footing to happen places that shows prospect in a new market and perchance promote new film theater costumiers.

When providers have more control over supplies and its monetary values, as it is the instance in the film industry, section appears to be less attractive. The best option is to make a win-win relationship with providers and have multi-sources of supply.

Dickering Power Of Buyers

Harmonizing to market research carried out by World ‘s Biggest Screens Pty Ltd. , 78 % of people who have seen an IMAX movie express the purpose to return ( World ‘s Biggest Screens Pty Ltd. , 2007 ) . There are some specific facets of IMAX which encourage people to make so. One such facet is when the theater itself is utilized to publicize new releases. There are normally light boxes having “ Coming Soon ” films and stands booklets of these films. Besides, showing dawdlers at least three months prior to the characteristic release is an appropriate scheme ( DataMonitor, 2010 ) .

Dickering power of purchasers can be decreased by offering differentiated types of film theaters. If IMAX is supplying service to a immense measure of telling purchasers, so these purchasers would decidedly hold the power to order IMAX the monetary value.

Competitive advantage

Harmonizing to Michael Porter, there are three different base schemes which allow companies to derive competitory advantages. They are:

Differentiation scheme

Cost leading scheme

Focus scheme

In the instance of IMAX, a chief ground for go oning frontward, backward and horizontal schemes is to derive cost leading benefits. IMAX as rather diversified concern that is considered a portion of different industries, that are horizontally integrated. The intent of such an integrating is to maintain operating expense at minimal degree, and cut the concern ‘ costs every bit much as possible. It would be sensible for IMAX to do and administer its ain films in digital format. This would allow the company to cut its operational cost significantly.

As it is traveling about its distinction scheme, IMAX has a alone characteristic of its big format movies. That differentiated company with others production houses and film makers.

IMAX ‘s library of movies and fact of turn uping itself in esteemed locales had created a alone trade name image. The end of IMAX is to supply his clients with high quality amusement and documental films with 3D images and top quality sounds.

If merely IMAX would be able to go on betterments of the quality and dependability of its merchandises, it may derive even larger competitory advantage that wo n’t be easy to be taken off. To make such a strong competitory advantage a house must be able to prolong its nucleus competences. IMAX must go on developing the accomplishments, cognition and capablenesss needed in planing and piecing the critical elements in its equipment and follow fast gait of technological alterations.

When it comes to growing chance for IMAX, house should concentrate on keeping of the current clients and pulling new audience. Harmonizing to IMAX web site, “ more than 20 per centum of its audience were school group, approximately 70 per cent of its viewing audiences were between 19 and 65 old ages of age, and the bulk were college or university educated ” ( IMAX Corp. , 2010 ) . IMAX needed to happen a manner to pull this demographic group. Company should remain focused on amusement films and docudramas.


In twelvemonth 2007 over 50 % of the entire gross was generated by IMAX system gross revenues like cameras, screens, projection systems. As IMAX has an advantage over the engineering of epic image production, it should go on puting in R & A ; D to supply outstanding systems used both to bring forth 2D and 3D movies ( SmallCapWatch LLC. , 2010 ) .

Soon many studios convert their films into IMAX format, but IMAX additions non that much from it. As IMAX is non portion of any studio, it does non acquire large portion in the net income. It seems like the growing in change overing films is high but the IMAX ‘s market portion is low.

In the gesture image industry, documental section is considered more important than the others. The Motion Picture Association of America gives out separate awards for documental films in the expansive Oscar Award. IMAX is originally known for bring forthing documental films. Since twelvemonth 2008 IMAX itself produced merely one documental – Space Station, and it looks like it ‘s non turning on the gait it should ( Historica Foundation of Canada, 2010 ) .

IMAX ‘s scheme for the coming old ages is “ to lure consumers happiest in forepart of 60-inch plasma screen Television. In order to acquire a consumers out of their places and do them travel and watch an IMAX format film, the company needs to give them something astonishing and something particular. And so far IMAX does it ” ( IMAX Corp. , 2010 ) .

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