Strategic Analysis for Imax

The following sample essay focuses on strategic analysis for Imax. Read the introduction, body and conclusion of the essay, scroll down.

Term of Refrences: We have refered to the book that was assigned to us in this semster which is Management (10th edition) by Stephen Robbins, Mary Coulter and Nehrika Vohra. We also consulted Strategic Management: An Integrated Approch (8th edition) by Charles Hill and Gareth Jones. Another two books that helped us to analyse this case study were Startegic Management : Creating Competitive Advantage (5th edition) by Gregory Dess, G.

T Lumpkin and Alan Eisner and Strategic Management (6th edition) by John Pearce and Richard Robinsons Description of Report: In Section 1 we analyize the corporate strategy of IMAX corporation followed by their integration strateges. In Section 2 we access the comparitive advantage of IMAX Corporation. Section 3 talks about the effect of enviorment on IMAX, both internal and external. Section 4 is the breif discussion of Industry Analysis and how IMAX has been performaing compartivily with the rest of the firm, then followed by EFE Matrix.

In Section 5 we have calculated and interpreated the financl ratios of IMAX Corporation.

SECTION 1: CORPORATE STRATEGY A Corportae strategy is one that specifies what business a company is in or wants to be in and what it wants to do with those business. It`s based on the mission and goals of the organization. Mission on IMAX as stated by co-CEO Gelfond is : It`s[IMAX] is designed to deliever the worlds most immersive movie experience? IMAX designs and manufactures large image producing format cameras and projection system as well as film development,production, post production and distribution to IMAX affiliated theatres worldwide.

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IMAX has about 400+ theatres in 47 countries.

IMAX`s strategy is to entice consumers happiest infront of 60-inch plasma screen TV. In order to get a consumer out of his home and make him go and watch an IMAX format movie, the company needs to give them something amazing and something special. And IMAX does it. INTEGRATION STRATEGIES There are basically two types of integration 1. Vertical Inegration 2. Horizontal Integration Page | 1 Vertical Integration The process in which several steps in the production and/or distribution of a product or service are controlled by a single company or entity, in order to increase that company’s or entity’s power in the market place.

IMAX is into vertical integration as it is into processing, distribution and exhibition of its own films. Vertical integration is further sub divided into two parts and that is 1. Forward Integration 2. Backward Integration Forward Integration: Gaining ownership or increased control over distributors or retaliers. When an organization becomes its own distributor its called Forward Integration e. g. a manufacturing firm open up its own franchise. In such situations the organization has control over the output.

IMAX initialy was focused on large format films that were educational yet entertaining and the theatres were located in institutions, museums, aquariums and national parks. IMAX forwrad integration took place when it become the distributor of its own produced films. IMAX is relatively small when it comes to rival studios and theatres but in itself IMAX is the leader in the industry when it comes to producing image in large format. IMAX not only played its films in its own theatres but gives its films to other theatres so that they would further promot the movie.

Backward Integration: Backward integration takes place when an organization becomes its own supplier. As we have earlier discussed IMAX was mainly focused on producing films that were of large format. To do so obviously they would require special cameras, projectors, screens etc. From past 15 years IMAX has aquired the ownership of the companies listed below: IMAX Corporation acquiring Imagery Rentals (September 07 1995) Acquiring minority shares in Mainframe Entertaintment Inc. ( June 1999) Acquiring Sonics Associates Inc. 2009 whole ownership) Acquiring David Keighley Production. Acquiring Digital Projection Int Ltd. (September 27 2000) Acquiring Cinema Plus Ltd. (October 29,2006) Acquiring a minority stakes in Laser Light Engines Inc. (July 14,2010) IMAX has a subsidiary company (meaning IMAX has 51% ownership in that company) Sonics Associates Inc which is an audio develpement company. It manufactures the sound systems for IMAX. And David Keighley Production,which is wholley owned by IMAX, works on the post prouduction. Most of the firms above mentioned were the suppliers to IMAX.

In this way IMAX has reduced the chances of suppliers effecting the prices. When IMAX has made itself independent in manufacturing all the aspect required to deliever as high quality large format film, it has access to all the new technology which is an essntail element in survival of IMAX. Page | 2 So we can see that through backward integration IMAX has made itself more stronger by being its own suppiler. In this way it has ganied control over the technology and cost to manufacture the systems that produce 2D or 3D images or audio system.

Horizontal Integration When an organization reduces the competition by combinig with its competitors. In case of IMAX it had only two competitor that too produced images in large format. One was which Iwerks which produced films in 15/70 and 8/70 format and ride simulations but its main focus was on the later. Another rival was Megasystems which manfactured large format projection system and provided technical services. But as IMAX has expanded itself to the commercial business but converting an 35mm Hollywood films into large format, Iwerks didnt do that.

It limited itself to ride simulation packages that are located in theme parks or museums and such other locations. Megasystem later stopped its production of projction systems and renamed itself to Pollavision. Now Pollavision is only involved in consultancy services of the large format film theaters. If we just analyize these three organizations i. e. IMAX, Iwerks and Pollavision, all of which were the manufactures of high definiton image producing projection systems, then the only organization left in the market that converts commercial movies into large format is IMAX.

Its as good as a Monopolist in this feild. And if we analyize IMAX in the category of Studios and theaters, then IMAX is relativily very small. IMAX stands at 12th position when it comes to studios, Disney taking the lead with 1st position. We think it would not effect IMAX if it didnt merge with other studios. It is because of the reason that cosumers have now fully become aware of IMAX format movies,the demand of watching movie in large format is increasing. And IMAX has expereinced a growth rate of 128% in the 1st quater of 2010 alone.

It if merges with other studio, it wont be able to work with rest of the studios. IMAX should launch many more commercial theatres where it can run converted Hollywood movies of 35mm to large format so that it can compete against large theatres like Regal Enternaintment Group. Page | 3 BCG MATRIX OF IMAX CORPORATION Market Share High IMAX System Sales Production of Movies Low Conversion of Movies into IMAX format Growth Rate High Low The BCG matrix is a strategic tool used to identify that which business of the organization offers high potentail and which were draining organizations resources.

Accorning to the Annual report of IMAX 2007, 51. 04% of the total revenue was generated by IMAX system sales like camers, screens, projection systems etc so we added it in the Stars section. As IMAX has has an advantage over the technology of larger-than-life image production,it should invest more in in R&D of the systems used to produce 2D and 3D films. We added Conversion of movies into IMAX format in the question mark section on BCG matrix. Its is because that though now-a-days lots of studios convet their movies into IMAX format, IMAX gains not that much from it.

As IMAX is not part of any studio,it doesnt get all the share in the profit. The growth is really high in converting movies but the market share is low. In the year 2008-10 IMAX only produced one documentary and that is Space Station. IMAX is orignally know for producing documentary movies but that hasnt given them the oppertunity to have a higher market share. In the motion picture industry,documentry segmant is considered significant than the others. The Motion Picture Association of America gives out seperate award for documantry movies in the grand Oscar Award.

IMAX is a brand name not only for the fact that it produces larger-than-life image format but also because of its great collection of documantries which are not only educationall but also entertaining. But as IMAX hasnt produced any movie since 2008, it`s not growing on the pace it should. So we added µproduction of movies in the star section IMAX should produce more movies. The dogs section of the BCG matrix is empty because there is no such business done by IMAX that should be liquidated. Its earning profit from all the three industries that it is working in i. . photographic equipment and supplies, motion picture and video tape production and Motion Pictur and Video Distribution Page | 4 SECTION 2: PORTER`S FIVE FORCES MODEL It helps in accessing where the power lies in a business situation. A series of IMAX Business Talks have been developed to complement the Big Screen Business Education Pack and provide student with an overview of business operations and marketing. Porter`s Model is actually a business strategy tool that helps in analyzing the attractiveness in an industry structure.

It let you access current strength of your competitive position and the strength of the position that you are planning to attain. Porter`s Model is considered an important part of planning tool set. When you`re clear about where the power lies, you can take advantage of your strengths and can remove the weaknesses and can compete efficiently and effectively. Porter`s Model of Competitive Forces Assumes that there are five competitive forces that identify the competitive power in a IMAX business situation.

Threat of substitute products Threat of new entrants Intense rivalry among existing players Bargaining power of suppliers Bargaining power of Buyers Page | 5 1. Threat of Substitute Products Threat of substitute products (film cinema) means how easily IMAX customers can switch to IMAX competitors product (film cinema). IMAX is the largest and most exciting film format in the world. With crystal clear images, ten times larger than traditional cinema format. Imagine the difference between watching a film at home on video and the same film at a normal 35mm cinema. The film might be the same, but the experience couldn`t be more different.

Well consider the jump from traditional cinema to IMAX as a similar dramatic leap. Threat of substitute(film cinema) is high when: There are many substitute products (cinema) against IMAX are available Customer can easily find the product or service (film cinema)that Imax`s offering at the same or less price Quality of the Imax competitors(film cinema) product is better Substitute product (film cinema) is by a company earning high profits so can reduce prices to the lowest level. In the above mentioned situations, Customer can easily switch to substitute products(film cinema).

The screens in IMAX Theatres are the biggest in the world. Up to eight stories high, they are ten times larger than a traditional cinema screen and fill the whole field of human vision. Sound is critical to the IMAX experience. The film soundtracks are delivered through a 15 000 watt digital surround sound system manufactured by Sonics Associates Inc, one of the world leaders in sound system design. Now-a-days you can find DVD`s and VCD`s with great resoultion. Even in cinema`s the quality of the film is really good so there might be customers who wont be willingto pay an extra $4-$5 to watch a movie in 3D.

This could prove a fatel blow to the IMAX Page | 6 2. Threat of New Entrants A new entry of a film theatre into your market also weakens IMAX power. Threat of new film theatre depends upon entry and exit barriers. Threat of new film theatre is high when: Capital requirements to start the business are less Few economies of scale are in place Customers can easily switch (low switching cost) Your key technology is not hard to acquire or isn`t protected well IMAX film theatre is not differentiated There is variation in attractiveness of segment depending upon entry and exit barriers. That egment is more attractive which has high entry barriers and low exit barriers. Market research carried out by World`s Biggest Screens Pty Ltd has helped to define the IMAX brand in the competitive film market and understand the key drivers (and barriers) to attendance. The lessons drawn from the research indicate that IMAX can sustain a positioning as a premium cinema destination not simply because it offers a better experience than other cinema destinations, but because it offers a very different cinema experience. IMAX is perceived as being at the cutting edge of new cinema, potentially offering new experiences in film.

The IMAX. Experience gives visitors the sense of real exhilaration ± a real µbuzz. It is also about the strong sense of realism of the film style which allows visitors the feeling of destination exploration; the feeling of µbeing there. There are main threats of IMAX film theatre: Primary threat: Conventional cinemas Home viewing: Pay TV, Video, free to air TV Other Darling Harbour Attractions: Sydney Aquarium Other Sydney Attractions: harbour cruises, shopping, Other Sydney Attractions: harbour cruises, shopping The Rocks area, Opera House tours, Taronga Park Zoo, Sydney Tower, bus tours, museums & art galleries

Some new film theaters enter into industry and low performing film theaters leave the market easily. When both entry and exit barriers are high then profit margin is also high but film theatres face more risk because poor performance companies stay in and fight it out. When these barriers are low then film theatres easily enter and exit the industry, profit is low. The worst condition is when entry barriers are low and exit barriers are high then in good time`s film theatres enter and it become very difficult to exit in bad times.

Page | 7 3. Industry Rivalry Industry rivalry means the intensity of competition among the existing film theatres in the market. Intensity of rivalry depends on the number of film theatre and their capabilities. Period of uncertainty during liquidation and restructuring in 2000. Poor film line up, combined with the aftershocks of company restructuring, resulted in low attendance figures. Industry rivalry is high when: There are number of small or equal film theatre and less when there`s a clear market leader. Customers have low switching costs Industry is growing Exit barriers are high and rivals stay and compete Fixed cost are high resulting huge production and reduction in prices The marketing strategy will aim to achieve its objective in three key areas: The release of a minimum of 6-8 new films in each market A groups sales program with a key focus on niche visitor groups e. g. schools, groups and functions/ events. Value-based promotions to drive business in traditionally softer trading periods The marketing strategy will be executed using the full range of the marketing mix including: Advertising Public Relations Internet/ Email Promotions Events Sales Point of Sale These situations make the reasons for advertising wars, price wars, modifications, ultimately costs increase and it is difficult to compete. 4. Bargaining Power Of Suppliers Bargaining Power of supplier means how strong is the position of a film theatre. How much film theatre`s suppliers have control over increasing the Price of supplies.

Film marketing takes the form of a combination of elements: advertising, publicity & promotions, word of mouth, website and e-communications. Films are released usually every 6-8 weeks in a staggered program timed to coincide, where possible, with key school holiday periods. The release of a new film is the prime driver to attendance. Each new film release aims to sell the IMAX experience through the title, reminding all consumers of the key IMAX proposition (i. e. IMAX is a giant screen cinema experience) whilst presenting a µcall to action to visit the theatre again, or to trial for the first time.

Page | 8 Suppliers are more powerful when Suppliers are concentrated and well organized a few substitutes available to supplies Their product is most effective or unique Switching cost, from one suppliers to another, is high Films are not an important than other The criteria for title selection are based on a number of factors: Format: 2D or 3D? 3D films have now surpassed 2D films as the most popular. There is however, a limited supply of 3D films (They`re more expensive to make) to choose from.

Experience of similar titles: An examination of the success of previous titles and the potential audience reaction to new titles. Success of titles in other markets: If a film has performed well overseas, it may do well in Australia also. Title testing: Testing the appeal of a film title with current IMAX audiences through surveys site. Expand the market: Titles that present an opportunity to draw a new market into the theatres and encourage trial. When suppliers have more control over supplies and its prices that segment is less attractive.

It is best way to make win-win relation with suppliers. It`s good idea to have multi-sources of supply. conducted on 5. Bargaining Power Of Buyers Bargaining Power of Buyers means, How much control the buyers have to drive down your products price, Can they work together in ordering large volumes. Buyers have more bargaining power when: Few buyers chasing too many goods Buyer purchases tickets of film theatre Film theatre is not differentiated Buyer`s cost of switching to a competitors product(film theatre) is low Film ticket cost is low Page | 9 Buyers are price sensitive Credible Threat of integration Our market research indicates that 78% of those who have seen an IMAX film express the intent to return. Activities to encourage this process include: Using the interior of the theatre building to highlight new releases Screening of trailers at least 3 months prior to the feature release Interior light boxes featuring coming soon films e. g. behind box office What`s On Brochures featuring µcoming soon films Buyer`s bargaining power may be lowered down by offering differentiated film theatres.

If IMAX serving a few but huge quantity(tickets)ordering buyers, then they have the power to dictate IMAX. PORTER`S GENERIC STRATEGIES According to porter¶ strategies allow company to gain competitive advantage from three different bases: Cost Leadership Strategy: A primary reason for pursuing forward, backward and horizontal strategies is to gain cost leadership benefits IMAX could be considered a part of three different industries: Photographic equipment and supplies, motion pictures and video tape production and motion picture and video distribution, it is called horizontal integration.

The purpose is overhead is kept minimum, and the firm does everything it can to cut costs. IMAX should be produce and distribute its movies in digital format also this shift will allow it to lower its operational cost significantly. Differentiation Strategies: The unique feature of IMAX is large format films, which differentiated it with others filmmakers and production houses. Its library of films and by locating itself in prestigious venues firm had created a unique brand image. Its goal is to provide his customers with high quality entertainment and documentary movies with 3D images and distortion free sounds.

For this IMAX had even developed a 3D directional sound technology that offered location and depth to the audio. If IMAX is able to continuously improve the quality and reliability of its programmes, it may have competitive advantage that can`t be taken away. It`s not enough simply to create a competitive advantage. A corporation must be able to sustain that advantage. And IMAX must be developed the skills knowledge and capabilities to design and assemble the critical elements in its projector and camera systems with technological changes.

Page | 10 Focus Strategies: A successful focus strategy depends upon an industry segment that is of sufficient size, has good growth potential and is not crucial to the success of other major competitors. Growth opportunity for IMAX is to focus on retention of the customers. According to IMAX more than 20 percent of its audience were school group, about 70 per cent of its viewers were between 19 and 65 years of age, and the majority were college or university educated.

IMAX needed to figure out a way to attract this demographic. To retain them IMAX should focused on educational documentaries and entertainment movies. As a result zoos, museums software, TV shows and toys were all redesigning their products to entertain and educate. The Value Chain The business of a firm can best be described as a value chain in which total revenues minus toal costs of all acrivities undertaken to develop and market a product or service yields value. Given is the semi income statment of IMAX.

IMAX interacts with its environment as it takes inputs and distributes its output, in form of large screen format movies with 3D images and distorted sound. Like every organization IMAX has also external and internal environment which affects its outputs. The External Environment The factors and forces outside the IMAX Corporation that affects its performance are its external environment. External environment of the IMAX Corporation has two components: a) Specific environment b) General environment Specific Environment Specific environment includes those forces and factors those directly relevant to the achievement of the IMAX`S goals.

The main forces that that make the IMAXµs specific environment are: Customers: Customers represent potential uncertainty to the IMAX because their taste changes. Therefore IMAX should need to create educational and entertainment movies and show them in full screen format. Demand for animated and technological base movies is increasing rapidly. IMAX should merge with some large theaters like Pixer to fulfill the demands of their customers.

Suppliers: IMAX had developed the skills, knowledge and capabilities to design and assemble the critical elements involved in its projector and camera systems, though most of the components were purchased from the suppliers with whom it maintained long run relationships. So it is supplier of its own cameras and projection systems. Competitors: IMAX has also competitors like other profit and non profit organizations. Now it faces competition from digital cable, satellite, DVDs and the internet all of which offer customers a much broader choice. Within the large format film segment, Iwerks was the only rival to IMAX.

General Environment Includes the political/legal social cultural demographic, technological that affects the IMAX indirectly. Movies which are presented in IMAX theater should represent the social culture of Page | 12 that area, where it going to be released. Mostly the audience is college or university educated, are between 19 and 65 years of age, so its projects should fulfills theirs desires. The Internal Environment Internal environment of IMAX includes the procedures and inputs which are used to attain its goals. IMAX had successfully developed 3D cameras and projection systems to produce realistic 3D images.

IMAX projection system produced images on screen that were brighter and sharper those found in conventional movie theater. The company had even produced a 3D directional sound technology that offered location and depth to the audio. IMAX also focuses on its research and development programmers to present movies in latest technological method . for this IMAX had spend $12. 6 million in research and development in past three years. As part of lease IMAX advised customers on theater design, supervised the installation of the system, trained theater staff and maintain the system. Page | 13 SECTION 4: INDUSTRY ANALYSIS

Industry analysis is an market assessment tool designed to provide a business with an idea of the complexity of a particular industry. Industry analysis involves reviewing the economic, political and market factors that influence the way the industry develops. Major factors can include the power wielded by suppliers and buyers, the condition of competitors, and the likelihood of new market entrants. We analyize the positon of an organization in the industry. In this case, we will be analyizing IMAX`s position in the industry which is Photographic Equipment and Supplies. IMAX shares performance according to 30th July 2010 is as

PERFORMANCE SUMMARY Name IMAX Corporation Ticker IMAX Change 0. 13% Photographic Equipment And Supplies YHoh726 0. 24% The above table shows us the performance of IMAX corporation in the share market. IMAX is losing by -0. 13% of the share price where as the rest of the industry is booming at 0. 24% of their share prices. The main competitors of IMAX are : Canon Inc Eastman Kodak Co X-Rite Incorporated Ballantyne Strong Inc Ikonics Coropration. Given below is table which tell us the different share prices of different firms in the industry andwhose share prices are increasing in th industry Page | 14

As on 30th July 2010, IMAX has expereiced growth of about 128% in an quater alone. This is amazingly high when we compare with rest of the industry. IMAX with its great control and knowledge of technology has outrun Canon Inc,who had experienced an increase in its share prices at mentioned above. IMAX also converting movies into large format,has helped to increase its revenues. This quater alone IMAX has a list of hit movies which have been converted into IMAX format. Toy Story 3, The Twilight Saga: Eclipes, Inception, Resident Evil, Avatar, Legends of The Gurdians are a few of them.

Consumers interest watching a movie in IMAX format has been increasing alot. Page | 15 Following IMAX is Ballantyne Strong Incorporation which has expereinced growth of about 47. 80% this quarter. The growth is good but comparing it with IMAX Corporation, its very low. Laging behind in the league of growth is Ikonics Corporation with about only 3. 40%. Ikonics is going through rough time, with only 3. 40 % growth this quater and fall in the price of it shares. IMAX CORPORATION VS INDUSTRY We will now analyize IMAX position against rest of the industry.

In finance, the Trailing twelve months (TTM) is a moving measurement calculated using a company’s interim or quarterly reports together with its annual report to show the twelve months of income statement data trailing the end date of an interim or quarterly report. Coming back to the case study, IMAX is doing really good when it comes to ranking. In market captialization, IMAX stands 3rd as comapred to the 6 firms in the industry. It leads the industry in Quaterly Growth and in five years the firm most likely to have the highest growth rate is IMAX Corporation itself..

It is a financial ratio used for valuation: a higher P/E ratio means that investors are paying more for each unit of net income, so the stock is more expensive compared to one with lower P/E ratio. Very intrestingly we saw earlier that Ballantyne Strong Inc expereinced a decrese in its share price by 0. 39% but here we see that investors are more willing to invest in Ballantyne Strong as compared to Canon Inc. IMAX Corporation`s P/E ratio is $27. 18, the amount investors are willing to pay to have a single share of IMAX Conclusion

As the above statistics has shown that up to 30th July 2010, the leader of the Photographic Equipment and Supplies industry was Canon Inc. IMAX Corporation took the 3rd rank. But in case of growth, IMAX has more potentail than any of the firms with 128% growth the first quater of 2010 alone. This shows that IMAX will lead the photographic equipment and supplies industry in coming future THE EXTERNAL FACTOR EVALUATION MATRIX (EFE) An EFE matric allows strategies to summerize and evaluate economic, social, cultural, demographic, enviormental, technological, legal and comeptetive information.

Both the opportunities and threats effecting the organization are listed. It is used to see the competitness of a firm. The highest possible total weighted score for an organization is 4. 0 and the lowest possible is 1. 0. The average total weighted score is 2. 5. A 4. 0 score indicates that an organization is respoding in an outstanding way to exsisting opportunites and threats in the industry Through the matrix we see that the strategies opted by IMAX corporation are effective. Its is throught the fact that the weighted score of all the opportunities and threats is above 2. . so we can see that IMAX is responding effectivly to the opportunites and threats comign tis way. The matrix is given on the next page Page | 17 OPPORTUNITIES Increase in the demand of Hollywood Movies Teaming up with other studios for joint ventures Opening IMAX theatres within Multiplexes No competitor that is converting movies into lareg format Converting existing multiplexe screens to IMAX format MPAA has given documantary movies segmant special significance Opening up IMAX in Pakistan and other countries High Populartiy of watching IMAX format movies

Because in this ratio we only take the figures of such liquid assets as cash in bond, bank balances, marketable securities, the ratio shows that how much firm¶s cash in their hands and accounts to pay their short term liabilities . it gives us the extreme closer view of the firm short term paying ability. The above graph of IMAX shows that the company has not more cash in hand and at bank to pay its short term liabilities. In fact the cash ratio is more extreme analysis of the firm debt paying ability so we can say that IMAX is in better conditions but not as much good because its ratio is less than in all four years.

Interpretation: The debt/equity ratio is another computation that determines the entity`s long term debt paying ability. Thus computation compares the total debt with the total shareholder`s equity. The debt/equity ratio also helps determine how well creditors are protected in the case of solvency, for the prospective of long term paying ability, the lower this ratio is the better of the company`s debt position. The above graph shows that IMAX is not in a better condition showing the negative trend in all four years . The negative indicates that their stockholder`s equity figures in negative that`s why they lie below the zero line

In the above figure of IMAX show the positive trend in years 2004 & 2005 means that in good position to pay its interest obligations on the long term liabilities while in 2006 & 2007 shows the negative trend and are not in good position to pay its interest obligations on the long term liabilities and it may seem also be difficult for the IMAX to pay their principals amount of their long term debts. In 2004 & 2005 the IMAX shows the positive trend indicating that it is generating enough income to meet its interest obligations and is able to pay its principal some debt as compared to other years.

The above graph of IMAX shows that who efficiently the years uses their assets to generate sales. The high figure shows that that the firm`s net sales are than its total assets. It indicates that the firm is not using enough of the assets to generate sales. In the above graph of IMAX, the activity of assets in the years 2004 & 2007 is greater than the other years that are why its ratios is lower as compared to other. As we look towards the years 2005 & 2006 its figure is higher indicating that this firm is not using much of its assets to generate sales. Page | 38 Return on Assets:

The above graph of IMAX shows that there are only two years in the company i. e. 2004 to 2005 whose position is better as compared to other years in the company. Because these years shows positive figure over the two years, while next year shows big decline i. e. 2006 and in 2007 the IMAX shos the negative fingure. The IMAX company show an improvement from year 2004 to 2005 but in last two years they show the decline position In year 2004 & 2005 operating assets are efficiently contributing in the generation of the sales while in the years 2006 & 2007 are not utilizing efficiently contributing in the generation of the sales.