This paper aims to analyze the current situation of IMAX and present alternative solutions to their problems. The paper involves Porter's five forces analysis of the movie production and distribution industry. The second part enumerates and evaluates the corporate strategies of the company which are focused differentiation and growth. It has been examined that the strategies employed by the company were effective in achieving their objectives.
It is the recommendation of this paper that the company prepares itself to for acquisition. The company cannot survive on its own in the film industry as they face the issues on debt and sustainability.
IMAX is an entertainment technology company that generates revenues from long-term theater system lease and maintenance agreements, film production and distribution, and theater operations. It is involved the different processes of large-format film business. The company has a movie library of 226 films that were either produced by IMAX or other independent filmmakers or studios. The company has generated total revenues close to $116 million by 2007. At the end of 2008, the market capitalization is $125 million with 295 theaters showing IMAX movies in 40 countries. (IMAX Corp, 2008)
An industry analysis is completed in Section 2.1 where Porter's five forces were employed. ...
The threats of substitutes are investigated which are considered as alternative and indirect competition of the business. Section 2.2 attempts an internal and external analysis of IMAX which is patterned on the SWOT analysis.
2.1 Environment Analysis
The growth and success of the movie industry is the availability of films for the theaters. Third party production companies are usually the one who create the film and market it. However, the films industries in different countries are heavily regulated with their own media regulatory boards that critics the film and assign its viewing rate. Films that are inappropriate for public viewing, depending on the violence, sex and language, are sometimes banned or rated with warnings that would deter the public. (The Culture, Media and Sports Committee, 2009)
The macro-economic environment of most markets all over the world remains negative, thus, the global economies are significantly under a lot of challenges. With this market atmosphere, the consumers tend to behave in cutting unnecessary costs and spend less on movies. The movie industry especially on large format films depends on box-office revenues. Commercial movie exhibitors and theaters generate revenues from consumer attendance at their theaters, which depends on the willingness of consumers to spend their income. (IMAX Corp, 2009)
The movie industry affects the people in terms of the theme that each movie portrays. Good movies sometimes inspire people. However, the way a movie is portrayed on screen and off screen could create a social stigma for the viewers and consumers. It is the responsibility of the movie industry to censor itself in order to create an appealing film for the viewers.