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Holland America Case Competition Presentation
The document outlines IMAX's strategic expansion plans in BRIC countries (Brazil, Russia, India, and China) by 2020, focusing on growth strategies, risk mitigation, and research and development. It includes detailed methodologies and projections for theater revenue and market allocation across these regions, emphasizing China and India as priority markets. Recommendations are based on independent models utilizing qualitative and quantitative analyses to assess potential revenue and partnerships.
Holland America Case Competition Presentation
- 1. IMAX Expansion in BRICEconomies STEVEN XU, MADELINE DOWN, BEN HAGEN, & MIDORI NG
- 2. AGENDA Clarify Charge Qualitative Analysis FinancialAnalysis Growth Strategies Risk Mitigation Research & Development Q&A
- 3. CLARIFY CHARGE How shouldIMAX allocate further expansion in BRIC countries by 2020? Growth strategies and risk mitigation recommendations? How much should IMAX invest into Research & Development initiatives? • CHARGE ANALYSIS GROWTH STRATEGIES RISK MITIGATION R&D
- 4. QUALITATIVE ANALYSIS ME T H O D O L O G Y CULTURAL ANALYSIS POLITICAL ANALYSIS ECONOMIC ANALYSIS CHARGE • ANALYSIS GROWTH STRATEGIES RISK MITIGATION R&D Indulgence Long Term Orientation Uncertainty Avoidance Masculinity Individualism Power Distance Ease of Doing Business Voice and Accountability Political Stability Government effectiveness Regulatory Quality Rule of Law Control of Corruption Target Market Hollywood Influence IMAX per capita Box Office Revenue
- 5. QUALITATIVE ANALYSIS RESULTS CHARGE• ANALYSIS GROWTH STRATEGIES RISK MITIGATION R&D Brazil Russia India China Cultural Analysis Political Analysis Economic Analysis Cumulative Score 43 45 39 41 47 47 73 59 28 42 45 40 40 30 51 43
- 6. TARGET MARKET METHODOLOGY CHARGE• ANALYSIS GROWTH STRATEGIES RISK MITIGATION R&D TOTAL POPULATION MIDDLE CLASS URBAN POPULATION AGE DEMOGRAPHIC ADDRESSABLE MARKET
- 7. TARGET MARKET IN D I A E X A M P L E CHARGE • ANALYSIS GROWTH STRATEGIES RISK MITIGATION R&D 410,970,797 37,168,199 16,835,957 1,270,000,000 69,865,036 TOTAL POPULATION URBAN POPULATION MIDDLE CLASS AGE DEMOGRAPHIC ADDRESSABLE MARKET
- 8. REVENUE METHODOLOGY Avg. IMAXMovie Ticket x Addressable Market = Total Theater Revenue Total Theater Revenue x 20% Revenue Share = Total IMAX Revenue Total IMAX Revenue – Cannibalization = Net Revenue CHARGE • ANALYSIS GROWTH STRATEGIES RISK MITIGATION R&D
- 9. REVENUE METHODOLOGY IN D I A E X A M P L E CHARGE • ANALYSIS GROWTH STRATEGIES RISK MITIGATION R&D Avg. IMAX Movie Ticket x Addressable Market = Total Theater Revenue $6.00 x 16,835,957 = $101,015,742 Total Theater Revenue x 20% Revenue Share = Total IMAX Revenue $101,015,742 x 0.20 = $20,203,148 Total IMAX Revenue – Cannibalization = Net Revenue $20,203,148 – 0 = $20,203,148
- 10. FUTURE EXPANSION ALLOCATIONS 400/ 1600 screens to be installed in BRIC countries Country Screens to add by 2020 Percentage of Allocation Percentage of Screen Growth Brazil 64 16.00% 24% Russia 61 15.25% 13% India 100 25.00% 31% China 175 43.75% 8% CHARGE • ANALYSIS GROWTH STRATEGIES RISK MITIGATION R&D
- 11. METHODOLOGY C ON T ’ D We feel confident that our recommendation is sound based on two independent models which take into account provided quantitative data and external research. CHARGE • ANALYSIS GROWTH STRATEGIES RISK MITIGATION R&D
- 12. &CHINA INDIA CHARGE ANALYSIS• GROWTH STRATEGIES RISK MITIGATION R&D TOP TWO COUNTRIES CHINA INDIA
- 13. GROWTH STRATEGY CHARGE ANALYSIS• GROWTH STRATEGIES RISK MITIGATION R&D GEOGRAPHY PARTNERSHIPS MARKETING 1 2 3
- 14. NATIONAL HOUSEHOLD INCOME STRATEGY:Start with successful cities, roll out to new CHARGE ANALYSIS • GROWTH STRATEGIES RISK MITIGATION R&D CHINA G E O G R A P H Y $6,180 USD (in 2013)
- 15. CinemaMarketShare Dalian WANDA Group ShanghaiFilm Group China Film Stellar Guangdong Dadi Shenzen China Film Other 14.3% 8.8% 8.4% 7.5% 7.1% CHINA PA R T N E R S H I P S CHARGE ANALYSIS • GROWTH STRATEGIES RISK MITIGATION R&D
- 16. CHINA M AR K E T I N G “Trading Up to 2020” CHARGE ANALYSIS • GROWTH STRATEGIES RISK MITIGATION R&D
- 17. Protectionism Dislike of WesternCulture Corruption High Power Distance CHINA C O N S I D E R AT I O N S CHARGE ANALYSIS • GROWTH STRATEGIES RISK MITIGATION R&D
- 18. INDIA G EO G R A P H Y CHARGE ANALYSIS • GROWTH STRATEGIES RISK MITIGATION R&D STRATEGY: Urbanized and infrastructure focused NATIONAL HOUSEHOLD INCOME $3,168 USD (in 2013)
- 19. Current Partnerships Cinepolis, PVRFilms CHARGE ANALYSIS • GROWTH STRATEGIES RISK MITIGATION R&D INDIA PA R T N E R S H I P S
- 20. INDIA M AR K E T I N G CHARGE ANALYSIS • GROWTH STRATEGIES RISK MITIGATION R&D “Aspirants” into 2020 “Trading Up to 2020”
- 21. INDIA C ON S I D E R AT I O N S CHARGE ANALYSIS • GROWTH STRATEGIES RISK MITIGATION R&D Luxury product perception Government Infrastructure Fast followers
- 22. INTERNATIONAL RISK MITIGATION CHARGEANALYSIS GROWTH STRATEGIES • RISK MITIGATION R&D 1. FOREIGN ENTRY PREMIUMS Mitigation: Research and Relationships 2. IP RISK Mitigation: Become subject matter specialists 3. FOREIGN EXCHANGE RISK Mitigation: Currency hedging, contract terms, and temporary price changes 4. STREAMING SERVICES Mitigation: Invest a portion of R&D to new movie-watching source
- 23. 10% of revenue$28M CHARGE ANALYSIS GROWTH STRATEGIES RISK MITIGATION • R&D RESEARCH & DEVELOPMENT
- 24. 175 100 64 61 LOCATIONS 10% ofrevenue for IMAX at home R&D GROWTH STRATEGY 1.Geography 2.Partnerships 3.Marketing CHARGE ANALYSIS GROWTH STRATEGIES RISK MITIGATION • R&D CONCLUSION
- 25.