Case Notes/Answers
IMAX EXPANSION IN BRIC ECONOMIES by
Dwarkaprasad Chakravarty Paul Beamish
Discussion Questions:
1. What competitive advantages underlie the success of IMAX? Are these sustainable?
2. What motivates IMAX to expand internationally into emerging economies, such as the BRIC
countries?
3. How would you evaluate IMAX’s international expansion to date?
4. If 400 of the remaining 1,550 screens are to be allocated to the BRIC economies, how would
you distribute them by country? Within each country, how would you distribute them among
cities?
5. Identify key business risks in international expansion to the BRIC economies. How should
IMAX address these business risks?
, W15059
Teaching Note
IMAX: EXPANSION IN BRIC ECONOMIES
SYNOPSIS
IMAX Corporation (IMAX), a company based in Mississauga, Canada, is synonymous with large-format,
high-quality cinematic experiences. It started in the 1970s by making and exhibiting nature documentaries
shown on a few large screens located in museums. Following four decades of innovation, IMAX has
considerably altered its business model. The bulk of its revenue now comes from providing mainstream
movie studios and multiplex exhibitors with technology—enabling studios to develop and convert movies
to IMAX’s format, and cinema operators to project them onto specially designed screens. As of December
2014, IMAX had 934 cinema screens in 58 countries, nearly half of them located in North America. Its
chief executive officer believes that the route to becoming a billion-dollar company involves adding 1,550
more screens worldwide, with the majority (about 1,100) in growth markets outside the United States and
Canada. Since 2000, the gross domestic product growth in the emerging markets of the BRIC economies—
Brazil, Russia, India and China—has exceeded by more than four times the combined growth in the G7. If
400 of the new screens are designated for BRIC economies, how should IMAX distribute them by
country?
TEACHING OBJECTIVES
1. Understanding sources of sustained competitive advantage
2. Determining motivations for international expansion
3. Evaluating country investment potential
4. Allocating investment between and within countries
5. Addressing country risk
COURSE FIT
This case may be used in undergraduate or MBA courses in international business and/or strategic
management.
, Page 2 8B15M028
ASSIGNMENT QUESTIONS
1. What competitive advantages underlie the success of IMAX? Are these sustainable?
2. What motivates IMAX to expand internationally into emerging economies, such as the BRIC
countries?
3. How would you evaluate IMAX’s international expansion to date?
4. If 400 of the remaining 1,550 screens are to be allocated to the BRIC economies, how would you
distribute them by country? Within each country, how would you distribute them among cities?
5. Identify key business risks in international expansion to the BRIC economies. How should IMAX
address these business risks?
DATA ANALYSIS WORKBOOK
An Excel workbook containing numerical data corresponding to case Exhibits 1, 2,3,5,7,8,10, and 11 is
provided for data analysis. These worksheets are an optional supplement for students and instructors.
SUPPLEMENTARY READINGS
1. Chapters 1–3 in Christopher Bartlett and Paul W. Beamish, Transnational Management: Text, Cases,
and Readings in Cross-Border Management, 7th ed., McGraw-Hill/Irwin, New York, 2014.
2. Chapter 3 in George Yip and G. Tomas M. Hult, Total Global Strategy, 3rd ed., Pearson, Upper Saddle
River, NJ, 2012.
3. Yuval Atsmon, Peter Child, Richard Dobbs and Laxman Narasimhan, “Winning the $30 Trillion
Decathlon: Going for Gold in Emerging Markets,” McKinsey Quarterly, 2012, 4, pp. 20–35.
4. Anthony Goerzen, Christian Geisler Asmussen and Bo Bernhard Nielsen, “Global Cities and
Multinational Enterprise Location Strategy,” Journal of International Business Studies, 2013, 44(5),
pp. 427–450.
CASE DISCUSSION AND ANALYSIS
This case is designed for a class of 75 to 90 minutes duration and comprises three parts. The first part
addresses the sustainability of IMAX’s success to date. The second part deals with IMAX’s international
expansion imperative and the assessment of its current worldwide footprint. The third part focuses on
recommendations for the allocation of investment by country and for managing country-specific risks.
As a possible opening question, the instructor can ask: How many of you have seen an IMAX movie?
Most of the students will have seen at least one IMAX movie. The instructor can then ask a couple of
students to describe their IMAX big-screen experience, which will set the stage for a discussion on
IMAX’s competitive advantages.
PART 1—SUSTAINING IMAX’S SUCCESS
1. What competitive advantages underlie the success of IMAX? Are these sustainable?
IMAX began by producing and exhibiting its own movies in large theatres in museums. Over time, and
especially post-2006, the bulk of its business has come from neither production, nor exhibition. Although
IMAX EXPANSION IN BRIC ECONOMIES by
Dwarkaprasad Chakravarty Paul Beamish
Discussion Questions:
1. What competitive advantages underlie the success of IMAX? Are these sustainable?
2. What motivates IMAX to expand internationally into emerging economies, such as the BRIC
countries?
3. How would you evaluate IMAX’s international expansion to date?
4. If 400 of the remaining 1,550 screens are to be allocated to the BRIC economies, how would
you distribute them by country? Within each country, how would you distribute them among
cities?
5. Identify key business risks in international expansion to the BRIC economies. How should
IMAX address these business risks?
, W15059
Teaching Note
IMAX: EXPANSION IN BRIC ECONOMIES
SYNOPSIS
IMAX Corporation (IMAX), a company based in Mississauga, Canada, is synonymous with large-format,
high-quality cinematic experiences. It started in the 1970s by making and exhibiting nature documentaries
shown on a few large screens located in museums. Following four decades of innovation, IMAX has
considerably altered its business model. The bulk of its revenue now comes from providing mainstream
movie studios and multiplex exhibitors with technology—enabling studios to develop and convert movies
to IMAX’s format, and cinema operators to project them onto specially designed screens. As of December
2014, IMAX had 934 cinema screens in 58 countries, nearly half of them located in North America. Its
chief executive officer believes that the route to becoming a billion-dollar company involves adding 1,550
more screens worldwide, with the majority (about 1,100) in growth markets outside the United States and
Canada. Since 2000, the gross domestic product growth in the emerging markets of the BRIC economies—
Brazil, Russia, India and China—has exceeded by more than four times the combined growth in the G7. If
400 of the new screens are designated for BRIC economies, how should IMAX distribute them by
country?
TEACHING OBJECTIVES
1. Understanding sources of sustained competitive advantage
2. Determining motivations for international expansion
3. Evaluating country investment potential
4. Allocating investment between and within countries
5. Addressing country risk
COURSE FIT
This case may be used in undergraduate or MBA courses in international business and/or strategic
management.
, Page 2 8B15M028
ASSIGNMENT QUESTIONS
1. What competitive advantages underlie the success of IMAX? Are these sustainable?
2. What motivates IMAX to expand internationally into emerging economies, such as the BRIC
countries?
3. How would you evaluate IMAX’s international expansion to date?
4. If 400 of the remaining 1,550 screens are to be allocated to the BRIC economies, how would you
distribute them by country? Within each country, how would you distribute them among cities?
5. Identify key business risks in international expansion to the BRIC economies. How should IMAX
address these business risks?
DATA ANALYSIS WORKBOOK
An Excel workbook containing numerical data corresponding to case Exhibits 1, 2,3,5,7,8,10, and 11 is
provided for data analysis. These worksheets are an optional supplement for students and instructors.
SUPPLEMENTARY READINGS
1. Chapters 1–3 in Christopher Bartlett and Paul W. Beamish, Transnational Management: Text, Cases,
and Readings in Cross-Border Management, 7th ed., McGraw-Hill/Irwin, New York, 2014.
2. Chapter 3 in George Yip and G. Tomas M. Hult, Total Global Strategy, 3rd ed., Pearson, Upper Saddle
River, NJ, 2012.
3. Yuval Atsmon, Peter Child, Richard Dobbs and Laxman Narasimhan, “Winning the $30 Trillion
Decathlon: Going for Gold in Emerging Markets,” McKinsey Quarterly, 2012, 4, pp. 20–35.
4. Anthony Goerzen, Christian Geisler Asmussen and Bo Bernhard Nielsen, “Global Cities and
Multinational Enterprise Location Strategy,” Journal of International Business Studies, 2013, 44(5),
pp. 427–450.
CASE DISCUSSION AND ANALYSIS
This case is designed for a class of 75 to 90 minutes duration and comprises three parts. The first part
addresses the sustainability of IMAX’s success to date. The second part deals with IMAX’s international
expansion imperative and the assessment of its current worldwide footprint. The third part focuses on
recommendations for the allocation of investment by country and for managing country-specific risks.
As a possible opening question, the instructor can ask: How many of you have seen an IMAX movie?
Most of the students will have seen at least one IMAX movie. The instructor can then ask a couple of
students to describe their IMAX big-screen experience, which will set the stage for a discussion on
IMAX’s competitive advantages.
PART 1—SUSTAINING IMAX’S SUCCESS
1. What competitive advantages underlie the success of IMAX? Are these sustainable?
IMAX began by producing and exhibiting its own movies in large theatres in museums. Over time, and
especially post-2006, the bulk of its business has come from neither production, nor exhibition. Although
