Japanese Animated Films and Mayfair Flowers Harvard Case Solution & Analysis

Japanese Animated Films and Mayfair Flowers Case Solution

1          Answer no 1

1.1        Introduction to the industry

The industry has several dominant features which are affecting this arena. These features include market growth rate, size of the market, capacity of production, profitability, economies of scale, technological change, vertical integration and capital requirement. Moreover, the market growth rate is said to be high since, the industry has evolved from a small industry to a major export industry. In addition, the size of market is also huge because of the increasing growth rate and a growing demand for animated films across the region. Profitability of the industry is also high since, a successful film can give almost Y9 to 10 million over the investment of Y13 million. The concept of vertical integration is not clearly mentioned but it can be said that there is no vertical integration in sense of either forward or backward integration. Ad agencies are working separately, while production companies are also competing with each other and they don’t have much time to integrate, neither forward nor backward. The economies of scales are high in the industry since, there are numerous people who work on a single film and there are numerous films produced in the industry. However, the learning and experience curve of an industry member is significant since, the industry works on the same thing for several years.

1.2        Analysis of the industry through Porter Five Forces

Porter five forces will be used in this section to analyze the industry and the competitive forces that are affecting the industry in either positive or negative ways. These forces include entry barriers, threat of substitutes, rivalry among industry members, bargaining power of supplier, and bargaining power of buyer. (MindTools, 2015)

1.2.1        Threat of New Entrant/ Entry Barriers

There are several factors that instill an entry barrier within the industry. These factors are affecting the arena in both negative and positive ways. The first factor is the high capital requirement to enter the industry. This is a favorable factor for the industry since, higher capital requirement discourage the new entrant to enter the same industry. Furthermore, the industry members have achieved economies of scale. They work in ways, which reduce the cost of anime and make it more profitable for them, this factor is very hard to achieve for a new entrant and it’s also favorable for the industry members as, it also hinders new entrants. Additionally, learning and experience curve of the industry members is significant which provides them with an edge over anew player. Furthermore, the threat of obsolete is very high in the industry that is an unfavorable factor because the technology is changing rapidly in the industry, which encourages a new player to enter the industry with a new technology. Finally, the industry requires specialized knowledge to work in the arena and this factor increases the barrier for new entrants to enter the industry. In a nutshell, it can be concluded that the threat of new entrant towards the industry is low because of the high entry barriers and discussed factors.

1.2.2        Threat of Substitutes

The threat of substitute is said to be low since, the industry is making animated films and the only substitute for the animated movies are simple and traditional cartoons. The basic target market of the arena is children and other anime lovers. Therefore, the threat of a substitute market is low. In addition, the performance of the substitute is low compared to industry’s product. Furthermore, the only tangible way in which a substitute can threaten the industry is price. The substitutes are attractively priced and that is the only way in which a substitute can threaten the industry......................

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