Internationalization

Strategy for IMAX

Group 8
Piyush Kumar - 2401037
Amol Ponnuri - 2401038
Prachi Shah - 2401039
Suman Dutta - 2401063
 ADDING VALUE SCORECARD FOR INDIA VS. RUSSIA

Factor India Russia

High population, increasing urbanisation, growing Strong market for Hollywood (83% of box office
disposable income, and rising multiplex penetration. revenue). Already has 36 IMAX screens, indicating
A
However, Bollywood dominance limits Hollywood demand, but slower growth than India.
appeal.

De Low labour and operational costs but with High operating costs but with well-established
deficiencies in infrastructure infrastructure.

Differentiating or Increasing Willingness to Pay Expensive ticket pricing is available. Strong

Di IMAX need to localise with Bollywood content. Ticket preference for Hollywood blockbusters.
pricing from Hollywood makes a big difference.

Improving Industry Attractiveness or Bargaining Power More consolidated cinema chains, making
I Big prospective clients but with diverse ownership of cinemas-it partnerships easier, yet with the risk of political
helps to partner with big forces like PVR control.

The regulatory frame is quite stable yet, with no remarkable Geopolitical issues and government control
N share for Hollywood market wise, it comes as a simple job when over foreign media are risk factors.
it comes to localised content strategies.

Learning valuable insights about emerging markets is More mature markets, useful for building up
G premium experience strategies.
essential for future expansions.
 Country Level CAGE

Factor India Russia IMAX Implication

Highly diverse, multiple India's movie culture is price-

Multicultural, Russian is dominant, sensitive, IMAX is premium; Russian
languages, Bollywood
Cultural dominance, Hollywood <10%
Hollywood has a strong share preference for local content affects
share IMAX penetration

Largest democracy, English Bureaucratic hurdles in India slow

Strong state influence, economic IMAX growth; Russia’s government
widely used in business, past
Administrative British influence
nationalism, support for local films influences foreign film access

Large country, urban-rural India's low multiplex density limits

Geographic divide in entertainment Large landmass, urban IMAX reach; Russia's urban centers
accessibility concentration, developed market favor high-end cinema

High growth, low ticket India's price-sensitive audience

prices ($2-$3), multiplex High-income, oil/gas economy, slows IMAX adoption; Russia's
Economic affluent market supports premium
expansion slow higher disposable income
experiences
Moderate potential, slow
IMAX sees challenges in India due to
expansion due to affordability High potential due to demand,
Overall Score pricing; Russia is a stronger market
& screen density infrastructure, and spending power.
but faces government restrictions
 Industry Level CAGE

Factor IMAX Implication

People love local-language films, so IMAX needs to offer regional content.

Cultural Premium cinema is trending, but ticket affordability remains a hurdle.

Different countries have different film censorship rules—China, for example, strictly limits foreign
movies.
Administrative Import duties and content approvals can slow down profitability.
Some governments support cinema growth with subsidies, while others impose restrictions on foreign
theater chains.

IMAX theaters need heavy investment, making rapid expansion tricky.

Geographic Multiplexes are growing in urban areas, but infrastructure varies widely across regions.
Running and upgrading IMAX theaters comes with high logistical costs.

Exchange rate fluctuations impact ticket prices and profit margins.

IMAX shares revenue with exhibitors, influencing financial feasibility.
Economic Economic downturns (like COVID-19) show the risks of relying too much on theatrical releases.
 Sustaining Competitive Advantage?

Competitive
Capability/Resource V R I O Implication

Proprietary IMAX Technology Sustainable Competitive

(Projection & Sound Systems) Advantage

Strong Brand & Premium Cinema

Temporary Advantage
Experience

Exclusive Hollywood Partnerships

Unrealized Advantage
(e.g., Christopher Nolan, Marvel, etc.)

Large-Screen Format & Differentiated

Competitive Parity
Viewing Experience

Global Expansion & Market

Competitive Parity
Penetration Strategy

Revenue-Sharing Model with

Temporary Advantage
Exhibitors

High-Capital Investment in IMAX

OR OR Competitive Disadvantage
Theaters
 Allocation of 400 of 1550 screens to BRICS Economy
Factor Weight India Score Russia Score Weighted India Weighted Russia

Market
Growth 30% 8 7 2.4 2.1
Potential

Hollywood
20% 4 9 0.8 1.8
Market Share

Ease of Doing
20% 6 5 1.2 1.0
Business

Urban
Population 15% 9 5 1.35 0.75
Growth

IMAX Ticket
Pricing 15% 5 9 0.75 1.35
Potential

Total Score 100% 6.5 7.0

Allocation
190 210
(Screens)
 What motivates IMAX to expand internationally into emerging economies, such as the BRIC
countries?
Increase in competition:
1. IMAX started facing competition from PLF brands. The exhibitors started aggressively the PLF strategy.
Some even stopped adding new IMAX contracts. Few placed their screens near IMAX theatres while
some built new locations that offered both IMAX and thier own big screens under the same roof.
2. The US exhibitor PLF screens slowly started catching up with IMAX and gaining market share. In 2013,
the US exhibitor PLF screens collected $9.6 million which was only $3 millions less than what IMAX US
locations generated
3. In October companies from Russia and China entered into partnerships to launch PLF format screens

Market Growth Potential

1. The BRIC countries possessed a lot of growth potential. From 2003 to 2013, the combined GDP
growth of the BRIC countries exceeded by over 4 times the combined growth of the G7 countries.

Hollywood's Global Reach

1. There is an increasing demand for Hollywood movies in the BRIC nations.

Government Incentives & Policies

1. Countries like China and India have relaxed FDI norms for foreign cinema players, encouraging
entry.
 Identify key business risks in international expansion to the BRIC
economies. How should IMAX address these business risks?

Risk Factor Impact on IMAX Mitigation Strategy

Regulatory & Partner with local firms for lobbying, comply

Russia's government control over foreign media; China’s
with government regulations, explore joint
Political Risks strict content regulations.
ventures.

Increase local content screenings, co-produce

Cultural Barriers Bollywood dominates in India; China favors local films.
IMAX-enhanced regional films.

Competition from Currency fluctuations, inflation, recession risks in BRIC Dynamic pricing models, revenue-sharing
Local Players markets. agreements with cinema chains.

Competition from India’s cinema chains (PVR, INOX) developing their Leverage IMAX’s technological superiority and
Local Players premium experiences. exclusivity deals with Hollywood.

Affordability IMAX ticket pricing may be too high for mass adoption Introduce tiered pricing, discount days, loyalty
Issues in India & Brazil. programs.