Importance of Resources and Capabilities: IMAX Case Study

This assignment elaborates on the importance of resources and capabilities in the context of IMAX Corporation. It discusses the core competencies of the company and analyzes its VRIO table. The assignment also highlights the company's location advantages, financial resources, technology, marketing strategies, and organizational capabilities.

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IMAX Case Study

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The main aim of this assignment is to elaborate the importance of the resources and capabilities
in the organization for which IMAX case study will be considered. The core competencies of the
company will be highlighted under this assignment in order to develop good significance in the
context of the growth of the company. VRIO table will be considered by taking reference of
IMAX company in which the importance of value, capabilities, rarity and imitable will be
mentioned.
IMAX Corporation is the company of entertainment technology that has specialization in
technologies of motion pictures and large-format motion-pictures. The major aim of the
company is to go beyond its cloistered museum system to show Hollywood films in the format of
IMAX. Celfond and Wechsler was the owner of the company for $80 million in 1994. The
company was listed in NASDAQ exchange in 1994 and attained market capitalization of $196
million in the very first year. IMAX movies were being shown in approx 295 theatres in 40
countries in which around 60% theatre were in North America.
Resources and capabilities are referred as primary driver of sustainable competitive advantages
of the company. Resources are considered as the productive assets, skills and knowledge which
are captured by the organization in the form of tangible, intangible and human resources.
Capabilities are the ability of the firm to make effective use of resources. The discussion
regarding the resources of the company is mentioned below:
There are advantages for IMAX Company of location as around 50% of theatres elaborating
IMAX Movies which are located in prominent societies like institutions and museum and similar
ration is taken into consideration by the company in 3D technology. The library of IMAX
Movies has been increased by 226 in 2007. Along with location benefits, IMAX has taken

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benefits of adequate financial resources in order to support its business activities by long-term
theatre system maintenance agreement, theatre operations and film production and distribution
(Porter, 2008). However, IMAX has not well-known image in the industry but sales from various
activities supported its competitiveness capabilities that facilitated the company to survive in the
industry.
IMAX is recognized all over the US due to large formats and holding 46 patents and it has strong
R&D. Majorly; the feature of patented digital re-mastering technology of the company permitted
it to develop traditional 35mm to the huge range along with the development of 3D versions of
such movies. Furthermore, it has well-known locations such as Smithsonian Institution in
Washington that is why it had a unique brand image. The company had huge chances to expand
its business across nation especially, alliances and partnership with movie theatre chains such as
AMC and websites channels that permitted IMAX to screen its movies in multiplexes. In the
context of Human resource management, the company was quite enough to hire talented and
skilled employees to keep minimal expenses (Vogelmeier, et. al., 2017).
The term of capabilities refer to the ability of the company to deploy its resources in order to
provide high rated customer value. The capabilities of the company are categorized under the
principle functional areas.
Strategic innovation is considered as the capacity to develop the existing business model in order
to generate the value for customers and stakeholders within the business over the competition
(Ling, 2011). There are various executives in the business that consider innovation in the most
vital way in order to increase the pace of amendment in the global business environment. The
core capability of IMAX is a culture of innovation as it fixed out niche strategy by taking

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consideration of ongoing innovation and differentiation of its products as well as services. The
main focus was the company on the cost leadership strategy in which the company lowering the
cost (Martin, 2009). To build long-term relationship with the customers, the company decreased
the cost of retrofitting traditional theatres along with the cost of transforming movies to the
format of IMAX.
The technology of the film is continually evolving in a more efficient manner. The company had
to be advanced in updating technology in order to remain in the competitive advantages.
Subsequently, the major core capabilities of the company are R&D. The company had invested
5% of sales revenue on R&D in which 50 members of the staff were involved in this out of 300
members of staff (IMAX, 2017).Consequently; R&D permitted the company to hold 46 patents
rights in order to amplify the competitive advantages and differentiation in the products.
Marketing is the major concept for companies to attract a huge number of customers towards
services and products (Takey and de Carvalho, 2015). IMAX did not market their films violently
due to having a great volume in sales force marketing staff in its office in China. Most of the
Hollywood movies are released in the format of IMAX that permitted it to “ride in the coat-tails
of marketing campaigns.
The core competencies of the company also remain in its external as well as internal connections
with its distributors and suppliers. It has been analyzed that good bonding remains between
procurement and sales that lead to increase capabilities in order to development of the new
product. The company has enough capacity to attain its objectives by taking consideration of

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good relationships with companies like Regal and AMC. The specialized capabilities of the
company in technology can be determined as a core competency of the company. According to
Roy and Raju, (2011),a sustainable competitive advantage is attained by improving durable
strategic capabilities that give benefit over time. One of the huge mistakes the manager commit
at the time of evaluating the resource and capabilities of the company is they incorrectly claim
their capabilities which are quite good enough in comparison of core competencies. The core
competencies are not an internal assessment of activities which are performed best but it is
considered as the external activities which show the performance of them in the context of their
competitors. IMAX has focused on various knowledge and capabilities in order to design major
aspects in their theatres for which the company had invested in 12.6 million dollars in AD
cameras and projections system in order to generate the realistic AD images. The films of IMAX
are 10 times larger in comparison of other films used in the projected and multiplexes that are
having large films of 120 feet wide. To remain in the competitive advantages, the main motive of
the company is to focus on the designing of the theatre for the viewer to be entirely fulfilled
applaud by graphics due to the immerse pictures that stretch entire process up to the peripheral
vision of the viewers.
It is necessary for the company to attain the determined objectives to focus on four factors of
VRIO (value, rarity, imitability and organization). The discussion on them will be elaborated
below with taking consideration of attaining the competitive advantages.
Value
The resources and capabilities of IMAX are keeping huge value within the business not only up
to financial resources but also it has value to its technology. The value of the company can be

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represented through its brand image. The brand image of the company is valuable as it helps the
company to focus on hiring talented human resource so that the objectives of the company can be
attained within the time frame. Meanwhile, the role of the technology and system capabilities in
the company is significant to give the best source of advantages to their customers in a large
format films. The features of Movie of IMAX are quite advanced in comparison of conventional
movie theatres like upper level of shutter speed and rolling loop motion. Furthermore, various
approaches such as innovation by taking consideration of the high level of technology helped the
company to cut the unnecessary costs of conversion which amplify the core audience and
develop the box office revenues (Lin, Tsai, Wu and Kiang, 2012). Along with the large feature of
file, IMAX has summed up offerings to customers through giving entertaining and educational
movies. This execution apparently amplified the offering quality of the company.
Rarity
The company cannot attain the objectives and well known brand image by possessing only
valuable resource and capabilities, but also they need high rate of skills and tactics to stand out
amongst its potential and current competitors in the same industry that is standing in the market
due to high level if technology (Mitrega and Pfajfar, 2015). For instance, due to have 46 patents,
the company should be thankful to the R&D Capabilities in which the company is referred to as
unique among its competitors. The company knew that how to entertain their customers to
connect with them for long period. Furthermore, the process of revolutionary printing to
assignment images on-screen permitted movies to be represented on a huge screen which is
sharper than 35 mm films at the time of maintaining its resolution and good sound quality
(Kubas-Meyer, 2017. The main aim of the company was to make differentiate it from their
competitors by providing movie libraries and various locations.

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Imitability
Imitability represents the capabilities of the competitors to imitate the organizations (Raja and
Rose, 2017). It is easier to imitate tangible resources of the organization but it is hard for the
organization to imitate intangible resources of the company. The technology of IMAX can be
imitated but needs a wide range of capital, innovation and marketing and huge knowledge on
R&D. There is another hard as well as unique capability in IMAX is the technological
breakthroughs which were majorly patented by its 46 patents. Furthermore, with an effective
brand image and loyal audience base, it is tough for the competitors to copy the same products.
Organization
It has been found from the above discussion that since the rare, valuable and hard to imitate
resources and capabilities of the company are not quite enough to sustain competitive
advantages. The company should be organized in an efficient manner to attain the determined
objectives, it is vital for the company to improve and leverage the full potential of its resources
and capabilities. IMAX was good enough to use its patent and resources and capabilities in order
to develop efficient technology in the business (Doz, 2017). Organized things in the company
can be liable for quick service time and use various channels to market its films to draw the
attention of large audiences towards films. Furthermore, the company was able to hire high level
of skills for the vacant position at a lower cost due to its well-known brand image.
On the basis of above discussion, it can be concluded that IMAX has sustained competitive
advantages from its high level of technology, the upper level of quality services human
resources, well-known brand image and unique organizational methods that are quite good in
comparison of another kind of films. The growth of technology is developing on constant basis

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which creates a huge challenge for the company to remain in the competitive market. It is
necessary for IMAX to focus on long-term strategies in order to fight against such challenges.
Along with that, the company should look for other resources and capabilities in order to attain
competitive advantages. The advertisement approach should be taken by the company in order to
draw the attention of a number of the audience towards the company. It would represent worth
investment on R&D to get a higher position in the same industry in comparison of competitors.

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References
Doz, Y.L., 2017. Strategic management in multinational companies. In International
Business (pp. 229-248). Routledge.
IMAX, 2017. Corporate Governance. Available [online]
https://www.imax.com/content/corporate-information Accessed on 2nd January 2019.
Kubas-Meyer, A. 2017. IMAX, 35 mm, Thedar knight rises, and you. Available
[online]https://www.flixist.com/imax-35mm-the-dark-knight-rises-and-you-212249.phtml
Accessed on 2nd January 2019.
Lin, C., Tsai, H.L., Wu, Y.J. and Kiang, M., 2012. A fuzzy quantitative VRIO-based framework
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Ling, L.S., 2011. Defining knowledge management (KM) activities from information
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Martin, R.L., 2009. The design of business: Why design thinking is the next competitive
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Porter, M.E., 2008. Competitive advantage: Creating and sustaining superior performance.
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