Roppongi Hills: City Within a City Harvard Case Solution & Analysis


There were some major externalities found among the various constituents of Roppongi Hills. The Mori Tower consisted of multipurpose education amenities formally called Academy Hills. It also had an association dining club formally known as Roppongi Hills Club, an observatory deck, an art museum known as Mori Museum and an art gallery named as Mori Arts Center Gallery. These services altogether shaped the Mori Arts Center. The museum was constantly facing losses, which was a negative externality.

The movie show business was one of the attractions of Roppongi Hills because of the important location and innovative design of TOHO Cinema. Ever since it had established its first movie theater in Japan near the city of Fukuoka in 1997, the United Kingdom based Virgin Group had been in search for a flagship locality in central Tokyo and that place became Roppongi Hills. Back in April 2003, in a partnership agreement with Japan’s prime movie distributor known as TOHO, the latest Virgin Cinemas Roppongi Hills unlocked its doors. It featured around 9 movie screens, with seating arrangement for over 2,000 people and was very well-equipped with state of the art audio systems. When it planned its way out the Japanese market in 2006, surprisingly the Virgin Group sold its stake to the TOHO, which was later on renamed as the theater TOHO Cinema. Initially it seems that TOHO might have faced a loss but they did well.

According to Daiji Susaki, General Manager of TOHO Cinema, one of the most important challenge faced by the cinema industry is that on average, Japanese customers like to watch and go to the movies for three times in a year hardly. TOHO has tried and worked extensively to make people habitual of movies so that it becomes a part of Japanese culture. Like, even though many of the movie theaters in the city of Tokyo are making an effort to grab the attention by starting their shows before 8PM but still the company is making an effort to grab attention by more and more consumers. To do so, the company has tried to make agreements with distributors and the company has made it really well because their efforts paid off well. General Manager of the company explained that Roppongi Hills TOHO Cinema grabs more number of customers than other cinemas in Japan. Huge number of consumers is the visitors of Roppongi Hills and in fact more than 80% of the visitors lived far than 5 Km and more than 60% worked in Roppongi Hills.

The combination of positive and negative externalities like TV Asahi, Visiting Tourist, Mori Tower and Bad press for Roppongi hills and etc.

As one of the largest property-owner with approximately 255,000 square feet, TV Asahi was now able to bargain a premium position within the complex, where it accommodates its television studio. The extremely co-operative behavior and winning approach of the Mori Building made TV Asahi organize show in the outside arena in front part of its tower and directly aired programs from there with the anchors being displayed against the backdrop of the compound. Both have played a tremendous role in generating valuable and free publicity for Roppongi Hills. An exterior arena was also available and was always used for various events, which ranged from movie premiere showcases and music concerts. It had become a famous spot for visitors from different parts of the world to Roppongi Hills.

An excellent growth of the building as a tourist or visitor destination was one of the unanticipated effect of the popularity of Roppongi Hills. But it has been observed that the massive presence of the tourist did not actually result in boosting the sales. The management of the complex further observed that most of the visitors mostly enjoyed by doing window shopping and scrutinizing the interesting life style of the Tokyo. As per the survey statistics around 25% of visitors went for the real retail purchasing and 33% dined at restaurants. Roppongi Hills introduced tour guides for just $20 so that visitors would visit each and every floor, shop and area individually and spent money. Furthermore, Roppongi Hills management kept on introducing the brands, which were constantly getting the attraction of the local and international visitors. Due to some un-usual incidents in the Roppongi Hills, press had constantly been criticizing and portraying a negative image of the complex but the management with the passage of time managed to overcome these things.........................................

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