BRIC stands for Brazil Russia India and China.
Expanding to other countries globally is always a challenge, some companies
encounter this by overcoming the risks involved in expanding. The countries who
overcome the risks are the ones who mark their presence in the country. Two key
business risks faced by IMAX while expanding to the BRIC economies are:
Income levels in different countries: As different countries has different income levels, the IMAX tickets
are relatively expensive like in India its ticket price is almost 4 times the
normal ticket price whereas in Russia, tickets are even for 80$. There is a
risk in expanding into these countries, as the revenues for the company may
vary because of the different income levels.
address these issues IMAX should price their tickets according to the income
levels of the country. The prices should be affordable so that everyone can
Ø Culture: Cultural differences along with income factor
among the countries are the differences which affect the company’s which are
expanding the most. As people in some countries are open about adapting new
tings whereas in some countries they take their culture really seriously. Some
countries don’t have the culture of going out and watching movies but they
prefer sitting at home and watch the movie. IMAX will be affected by these as
they are bit more on the expensive side.
Other risks can be explained by country wise:
of the risks involved for expanding in Brazil are, Infrastructure it is comparatively poor as compared to other
countries. Moreover there current account for foreign investment is in deficit
because of social pressures impeding on them. Brazil crime rate is really high
due to which people prefer not going out with families. To address this IMAX
should create family and safe environment with security so that everyone should
feel safe and come there.
Ø R (Russia):
In Russia the problem which will be faced by IMAX is the shrinking and ageing
population. They have less number of young people in their country and moreover
going out for watching the movie is really expensive there. The ticket is
around 80$ and ageing population are not going to spend this much on the
movies. To overcome these risks IMAX should reduce the ticket rates and show
some old movies as well to attract the ageing population.
Ø I (India):
The current account foreign investment account in India is in deficit. The
reason behind this is demographic divide, messy democracy and stalling
structure and lastly weak infrastructure. As compared to countries like Brazil
the infrastructure of India is better. Moreover the other movie theatres in
India have comparatively low price but providing the same thing. In India there
are already so many movie theatres so IMAX should reduce the ticket price in
India as well.
Ø C (China):
China’s debt levels are really high which threatens the financial position of
the country. The ageing population and shrinking workforce is even a concern
for china, as the population in china is mainly the ageing population. Rising
workforce wages are even a concern. For these risks IMAX should show some old
gold movies in order to attract the ageing population. Moreover they should do
extra things to attract the ageing population like provide them extra help and
comfortable seats to sit on.