BRIC stands for Brazil Russia India and China.Expanding to other countries globally is always a challenge, some companiesencounter this by overcoming the risks involved in expanding. The countries whoovercome the risks are the ones who mark their presence in the country. Two keybusiness risks faced by IMAX while expanding to the BRIC economies are:Ø DifferentIncome levels in different countries: As different countries has different income levels, the IMAX ticketsare relatively expensive like in India its ticket price is almost 4 times thenormal ticket price whereas in Russia, tickets are even for 80$.
There is arisk in expanding into these countries, as the revenues for the company mayvary because of the different income levels. Toaddress these issues IMAX should price their tickets according to the incomelevels of the country. The prices should be affordable so that everyone canafford it.
Ø Culture: Cultural differences along with income factoramong the countries are the differences which affect the company’s which areexpanding the most. As people in some countries are open about adapting newtings whereas in some countries they take their culture really seriously. Somecountries don’t have the culture of going out and watching movies but theyprefer sitting at home and watch the movie.
IMAX will be affected by these asthey are bit more on the expensive side.Other risks can be explained by country wise:Ø B(Brazil): Someof the risks involved for expanding in Brazil are, Infrastructure it is comparatively poor as compared to othercountries. Moreover there current account for foreign investment is in deficitbecause of social pressures impeding on them. Brazil crime rate is really highdue to which people prefer not going out with families. To address this IMAXshould create family and safe environment with security so that everyone shouldfeel safe and come there.Ø R (Russia):In Russia the problem which will be faced by IMAX is the shrinking and ageingpopulation.
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They have less number of young people in their country and moreovergoing out for watching the movie is really expensive there. The ticket isaround 80$ and ageing population are not going to spend this much on themovies. To overcome these risks IMAX should reduce the ticket rates and showsome old movies as well to attract the ageing population.
Ø I (India):The current account foreign investment account in India is in deficit. Thereason behind this is demographic divide, messy democracy and stallingstructure and lastly weak infrastructure. As compared to countries like Brazilthe infrastructure of India is better. Moreover the other movie theatres inIndia have comparatively low price but providing the same thing. In India thereare already so many movie theatres so IMAX should reduce the ticket price inIndia as well.Ø C (China):China’s debt levels are really high which threatens the financial position ofthe country.
The ageing population and shrinking workforce is even a concernfor china, as the population in china is mainly the ageing population. Risingworkforce wages are even a concern. For these risks IMAX should show some oldgold movies in order to attract the ageing population. Moreover they should doextra things to attract the ageing population like provide them extra help andcomfortable seats to sit on.
