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N14512 MSc International Management University of the West of England

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University of the West of England

N14512 MSc International Management University of the West of England

STRATEGIC ANALYSIS
IMAX: LARGER THAN LIFE
Word count: 2234
I. INTRODUCTION
IMAX Corporation is an entertainment technology company specializing in technologies of motion-picture and presentations of large-format motion-picture (Corporate Information| IMAX, 2017). The company’s two strategies to expand its reach are to go beyond its cloistered museum environments into multiplexes and to present Hollywood films in IMAX format. Along with the strategies, its resources of innovation and exceptional abilities to pursue differentiation strategy are the cores of company (Corporate Information| IMAX, 2017).
According to Grant and Jordan (2015), the identity of customers and technologies for serving them are always changing, the market-oriented strategy cannot provide stability and constancy of direction to the company in the long run. From the resource-based view strategy, success or failure of firms depends on their internal resources and heterogeneous capabilities in formulating strategy to achieve the sustainable competitive advantages (Peng, 2016; Mahoney and Pandian, 1992). Hence, analysis of firms’ resources and capabilities is helpful in determining IMAX’s sustainable competitive advantage (Harrison and John, 2013; Rogoff, 2007).
II. RESOURCES AND CAPABILITIES
Resources and capabilities are considered as primary drivers of firms’ sustainable competitive advantages (Frynas and Mellahi, 2015; Buono, 2002). Resources are the productive assets, knowledge and skills owned by the firms while capabilities are the firms’ ability to make use of resources (Grant and Jordan, 2015; Nijssen and Frambach, 2013; Harrison and John, 2013).
1. Resources
Resources fall into three categories including: Tangible, Intangible and Human resources (Grant and Jordan, 2015; Harrison and John, 2013). The tangible resources consist of financial resources and physical resources. On the other hand, technology, reputation and culture are the intangible resources while Human resources pertain to the skills, motivation and capacity for communication and collaboration.
1.1 Tangible Resources
IMAX has advantage of location since almost 50% of theaters showing IMAX movies were located in prestigious locations such as museums and institutions and the same percentage used the IMAX 3D technology. The number of IMAX movie library has also increased at 226 films by 2007.
Apart from location advantage, IMAX was able to generate adequate financial resources to support its business activities through long term theatre system lease and maintenance agreement, film production and distribution, and theatre operations. Although IMAX was not a giant player in the market, high revenue and system sales from different offerings in various
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STRATEGIC ANALYSIS
activities supported its competitiveness capabilities and helped them survive in the industry. The table and pie chart below shows IMAX’s main financial resources.
Table 1: IMAX’s Total Revenue in 2007 (in million)
2007 System Sales Films production and distribution Theatre Operations Million $59.12 $36.57 $16.58 % on Revenue 51.04 31.57 14.31
IMAX’s Total Revenue in 2007
System Sales Films production and distribution Theatre Operations Others
Chart 1: IMAX’s Total Revenue in 2007 (in million) (Source: Case Study)
1.2 Intangible Resources and Human Resources
IMAX is known as the only company in the world getting involved in all aspects of large format films and holding 46 patents and 7 patents pending in the US because of its R&D. Especially, its patented digital re-mastering technology allowed it to convert traditional 35 mm to the large format as well as to develop 3D versions of such movies. Therefore, stated by the board of IMAX directors, the core culture of IMAX is innovation (Corporate Information | IMAX, 2017).
Moreover, by locating itself in prestigious venues like the Smithsonian Institution in Washington, IMAX had a unique brand image. There were also other significant opportunities for IMAX to expand its presence outside those institutions. Particularly, partnerships and alliances with theater chains like AMC, websites and channels allowed IMAX to screen its films in multiplexes. Therefore, in term of human resources management, IMAX was not dependent on hiring any talent and was able to keep the expenses at a minimal and have more manageable budget ranges due to its unique brand. Furthermore, since IMAX and its investors or sponsors

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