Introduction: IMAX’s Resource Summary
In order to analyze IMAX’s success as a company, our group performed a company resource analysis for the IMAX Corporation. Using the Ivey IMAX case, Hoover’s database, and IMAX’s 10K, we compiled a list of seven tangible and seven intangible resources/capabilities that are imperative to IMAX’s success as a business. Additionally, we performed a VRIST analysis for each resource/capability and determined their competitive consequences and performance implications. The following executive summary describes our conclusions.

Extraordinary Resources: Brand Recognition, 40 Years of Experience and Knowledge
Through our VRIST analysis, we have determined IMAX’s brand recognition and its forty years of experience and knowledge to be extraordinary resources.
IMAX established its brand image as a quality and technologically-advanced movie viewing experience in the early 1970’s. As IMAX films grew in popularity, consumers began to recognize the difference between an IMAX experience and a normal theater experience. IMAX thus gained much success from its brand being recognized as a higher quality and unique theater experience. Over time IMAX, originally focused on producing mainly edutainment films in venues like museums, began also converting and presenting Hollywood films on their IMAX systems in commercial theaters. IMAX’s brand recognition for a special experience encouraged consumers to pay the premium ticket prices. However, as IMAX continues to produce Hollywood movies, which are played on normal theaters for cheaper prices, many consumers have determined that the slightly different viewing experience is not worth the extra cost. With this lack of providing a valuable enough product, the brand recognition IMAX once built its business on is no longer as much of a competitive advantage.
Another extraordinary resource that IMAX has is the experience that it has gained from being in the industry for over forty years. With this experience, IMAX has gained valuable insights into both the technological side of film production and the consumer behavior within the film industry. This extraordinary resource is very beneficial to IMAX as its wealth of previous knowledge helps IMAX build technology and marketing strategies for future business.

Recommendation
IMAX currently has a two-pronged strategy that relates to an inconsistent brand image; the brand is known for producing its own edutainment films and for converting Hollywood films into IMAX format. We believe IMAX to spreading itself too thin and therefore losing the competitive advantage that their brand recognition once had. In order to reverse this trend, IMAX needs to focus their strategy on the style of film popular demand favors: Hollywood movies. First, they should eliminate the production of their own films (i.e. documentaries) and end their leases with their IMAX-only venues (i.e. museums). IMAX should then reallocate those resources to development of cutting edge technology for their retail theater systems in order to build brand recognition as a company that provides a higher quality viewing of Hollywood films. They should continue to create new partnerships with retail theaters both domestically and internationally to increase the availability of their films. IMAX can use their forty years of knowledge in creating a high quality brand image in the documentary film sector to recreate this image in the Hollywood film sector. By exploiting their extraordinary resources in this fashion, IMAX can achieve a competitive advantage by producing a similar product as its competitors but at a higher quality that consumers are willing to pay more for.

Support and Analyses
Analysis 1: Tangible Resources

Patented Equipment (3): The IMAX Photographic Equipment and Supplies includes the unique equipment used by IMAX Corporation to film their movies. The Motion Picture & Video Tape Production Technology refers to IMAX’s post-production technology such as Hollywood film conversion. The Motion Picture & Video Distribution Technology refers to IMAX’s unique in-theater equipment such as its specialized sound system, projectors, and screens (Ivey). Because these technologies have very similar VRIST analyses, they have been combined for convenience. All of these technologies are patented and exclusive to IMAX; they are very valuable due to them being IMAX’s major selling points, rare because of their uniqueness, and costly to imitate due to their being patented. However other specialized film technology can be a substitute for this technology, such as forms of 3D movie technology. Also, this technology is sellable and would most likely provide success to other movie companies if traded to them. We determined all three to be a temporary advantage, because they are a major selling point for IMAX now, but can be phased out if better technology is developed. Respectively, these technologies were determined to have below-average returns (the film technology is not a major revenue source for IMAX), average returns (IMAX’s production technology is a strong financial factor but relatively average), and above-average returns (the main selling point for IMAX to draw in customers is their specialized in-theater experience).

Subsidiary companies (Sonic Associates Inc. and David Keighley Production): IMAX’s two subsidiary companies provide valuable sound systems and post-production support which is valuable to the overall performance of IMAX’s systems. The contribution from these companies specifically is rare and it is costly to imitate the effects they have on IMAX’s overall business. Having over 50% stake in two separate companies costs and is worth a large amount of money that other players in the industry cannot simply replicate. Relative to IMAX’s patented film technology that is sold to theaters and used to generate “51.04 percent of total revenue,” the sound and post production services from the subsidiaries probably only slightly contribute to IMAX specific film generation which accounts for “31.57 percent of total revenue” (Ivey), so the returns were determined to be average.

Leased IMAX-specific theater locations: These include the venues in which there is an IMAX-only theater, such as in the Smithsonian Institution in Washington, the Museum of Science and Industry in Chicago, and other museums, zoos, etc. (Ivey). IMAX’s presence in these uncommon venues was valuable to the creation of its brand image as a unique theater experience and could not be easily replicated by another company if they were to trade for a spot in one of these locations. However, limiting their films to mainly these locations is a competitive disadvantage for IMAX because it lessens the availability of their films. As IMAX now generates most of its revenue from leasing their systems and ticket sales from Hollywood converted movies for large theater chains (Ivey), the relative performance implications for these theater locations are below-average.

Library of Films: In the early stages of the IMAX Corporation, much effort was put into production of documentaries, edutainment and other IMAX-specific films. As a result, IMAX has collected a rare library of specialized films that could not be imitated without the high cost of producing many films of similar style. While this resource has a low tradability because these type of films require IMAX’s unique venues and technologies to be successful, the film industry is filled with substitutes to IMAX-format films. Therefore, this library of films only gives IMAX a temporary advantage as they have increasingly switched from producing documentaries into other revenue sources such as the conversion of Hollywood films into IMAX format. As a result of this strategic shift, IMAX’s library of films have below-average return for the company.

Engineers trained in IMAX technology: IMAX engineers are rare and develop the unique, patented, and valuable technology that sets IMAX apart from similar companies. Their expertise cannot be easily imitated; competing companies would have trouble finding a large amount of skilled and experienced engineers who have worked with the IMAX-specific film equipment for a low cost. Few average electrical or specialized engineers could substitute for what the IMAX engineers do. IMAX’s long-term, sustainable success depends on the abilities of these engineers to leverage their experiences at IMAX to constantly create technological advancements for the company. They are not directly involved with the sales of IMAX films (main revenue stream), so although their contributions are indirectly important, the implications of their work on overall monetary performance is average compared to other tangible resources.

Analysis 2: Intangible Resources

Brand Recognition: The name “IMAX” is well-known by consumers and companies in the theater industry. Being able to recognize the name IMAX and attribute technological performance to that name means that this intangible resource is extremely valuable. It is rare and difficult to become one of the few companies in the theater industry that is well-known. In order to imitate IMAX’s image, a company would have to duplicate their technology for a long-term period and still might not receive the popular recognition that IMAX has. The brand of IMAX cannot be traded into another industry and have the desired reputation. Overall, these aspects make IMAX’s brand an extraordinary resource that can be used only as a short-term competitive advantage because if IMAX’s theaters do not keep up with the speed of modern technology and consumer behavior, their reputation will become less favorable.

Partnerships (with retail theaters such as AMC, Regal, etc.): Sales of theater tickets at IMAX theaters is the main revenue stream for IMAX Corporation. The majority of these theaters are located within partnered theater venues such as AMC. With the large amount of revenue that these partnerships bring, they are very valuable to IMAX. IMAX cannot replicate a partnership at all and they cannot choose partnerships with other random companies (a grocery store), and have the same profitable gains that they have with AMC and Regal. Thus these characteristics prove that this resource is advantageous, but only in the short term; we do not know how long the partnerships will last or if those companies will stay in business.

Intellectual Property: The patents of IMAX’s exclusive technology provide great value to the corporation; without them, IMAX would not be able to restrict access to the technology which sets it apart from other companies. These patents are all unique to the specific technology at hand and are thus extremely rare, and imitating the patents is impossible. Because the patents are unique, they cannot be substituted to produce the same return. If these patents are to be purchased by a similar company, they could provide the company with similar success. The intellectual property is determined to be a temporary advantage because the exclusive technology is only a very beneficial asset until better technology is developed by other companies.

40+ Years of Industry/Technological Knowledge and Experience: The knowledge of the industry which IMAX corporation has developed over its existence provides the company with much value as it shows which business strategies are most successful. This knowledge is very rare and very costly to imitate: a competitor must be in the industry for over forty years to achieve similar knowledge. This knowledge is nonsubstitutable and cannot be traded to other companies. As this knowledge is involved in the day-to-day operations of the company and is continuously developed, it provides a sustainable advantage.

Market Share in the Edutainment Sector: IMAX reports that over 20 percent of IMAX theater audiences are school groups (Ivey). This is the direct result of a growing trend of parents seeking entertainment that will also educate their children. IMAX has been able to grab a high market share of this “edutainment” genre with their rare collection of child-friendly documentary films. This resource has low tradability because another company could not purchase their market share, but it is highly substitutable due to the existence of other sub-genres out there for companies to go after. IMAX’s market share in the edutainment sector is just a temporary advantage with below-average returns as other players come into the genre and IMAX increasingly shifts their focus from this genre into more lucrative areas such as converting Hollywood films to fit IMAX systems.

Capability to Produce High-Level Films Without Hollywood Actors: Typical budgets for IMAX productions are between five to $5 million to $10 million, whereas Hollywood studios have to dish out more than $10 million to sign stars to act in their films (Ivey). Avoiding these expensive contracts is valuable to limiting IMAX’s costs and is a rare resource in the film industry. It would be costly to imitate or substitute for this resource, as other studios struggle to make noise in the film industry without having big stars in their movies. While IMAX can continue to take advantage of this sustainable advantage, it will only provide below-average returns as they continue to shift away from producing their own movies.

Ability to Reach International Markets: The increasing reach out to internal markets has been a strategy which provides a large value to IMAX corporation: in 2011, more than 70% of [IMAX’s] theater signings came from outside the US and Canada. (Hoovers). Tapping into international markets in general is not a rare capability nor is it one that is very costly to imitate. This ability cannot be traded to other companies. As IMAX continuously exploits its international market for higher levels of revenue, this capability is sustainable and produces above-average returns.