Essay on Imax : A Strategic Dilemma

1596 Words Oct 25th, 2016 7 Pages
IMAX offers immersive educational and entertaining (referred to as “edutainment”) films, and through this, has established its brand among educational institutions. The idea of the “Mozart Effect” has contributed to IMAX’s success in that it offers entertaining yet informative films targeted toward a primarily educated demographic of viewers. However, seeking growth, IMAX has expanded its films and theater technology to mainstream cinemas where it has begun offering Hollywood blockbusters in IMAX format. This poses a strategic dilemma for IMAX: should IMAX continue offering Hollywood films, branching outside of its educational roots?
Although resolving this strategic dilemma is of critical importance, a mounting debt is also a growing concern. IMAX must decide whether or not to continue offering purely entertaining Hollywood films, which according to some stakeholders has the potential to dilute the brand. IMAX must also determine how it will address its increasing debt and cash flow problems. To summarize and consolidate, IMAX’s two main issues are 1) how to increase the overall health of the firm by minimizing its debt and 2) how to proceed strategically without diluting the brand.
To best address with these issues, IMAX should commit to performing as a differentiated film studio outside of the Hollywood film studio oligopoly. IMAX has created itself a blue ocean of uncontested market space in large format edutainment films, and should continue to leverage this in its…

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