Manga and the Pirates: Unlikely Allies for Strategic Growth
Mayfield, Milton, Mayfield, Jackie, Genestre, Alain, Marcu, Magda, SAM Advanced Management Journal
The Japanese comic book (manga) industry faces what many businesses might consider an enviable problem. Almost everyone in Japan buys manga on a regular basis. This high level of market saturation, however, leaves little room for growth in the domestic market (Ida, 1996; Pearson, 1997; Schodt, 1996), and lack of growth is generally a serious problem for any company. To overcome such stagnation, many manga companies are exploring creative strategies for new market development (Ida, 1996; Lent, 1995; Schodt, 1996). This case will detail one of the more creative of strategies, the transformation of copyright pirates into export allies.
The strategy holds great promise to improve the business environment for manga producers and former pirates (or privateers). This paper analyzes the business alliance by using Porter's (1980) five forces model of the competitive environment. Our contention is that the need to improve their competitive environment led such disparate groups to join together. Also, when viewed through the five forces framework, the case more broadly illustrates how companies can export intellectual goods and reshape their business environment.
We will more fully elaborate on this creative use of strategic alliances by presenting background information on Japan's manga industry, Asia's potential as a manga export market, and the piracy of Japan's manga on the Asia continent. Then, we will analyze the privateer alliance using Porter's five forces model (Porter, 1980), and conclude with further implications from our analysis.
Japan's Manga Industry
The Japanese manga industry is far different from the U.S. comic book industry. Manga are bought and widely read by all social strata. Industry experts estimate that 95%% of Japanese citizens read manga on a regular basis (Ono, 1989; Pepper; 1987; Schodt, (1996), and that manga account for approximately one-third of total periodical dollar sales (Ono, 1989; Pepper 1987; Schodt, 1996; Solo, 1989). Unlike the more insular U.S. comic book companies, most manga firms aggressively research and market their products, making extensive use of focus groups and reader surveys. Furthermore, these techniques give critical feedback in strategic development (Schodt, 1983; Schodt, 1996).
Equally important, the manga industry is much more diverse than its U.S. counterpart, both in product and distribution. For example, U.S. comic book companies largely focus on super hero publications targeted at teenage males. In comparison, the manga industry offers a wide variety of publication types for a demographically diverse readership. One is just as likely to see a 50-year-old business man reading a gangster manga as a 12-year-old school girl reading a manga on Japanese culture (Fujidea, 1997; Morikawa, 1997; Anonymous, 1995).
This broad consumer base has been carefully developed through manga companies' long range planning. Beginning in the 1960s, the industry carefully developed wide distribution points throughout Japan. Customers can buy manga from corner news dealers, local book stores, or from manga specialty stores (Solo, 1989). In conjunction with wide distribution, the companies also developed detailed market research and promotion processes. Largely due to these efforts, manga became accepted as a legitimate art and entertainment medium. This acceptance contrasts starkly with the U.S. market, where comic books are considered a specialty and collectible item with the resultant limited sales (Genestra, Mayfield, & Mayfield, 1997).
Manga companies' artistic vitality and aggressive growth strategies have contributed to the industry's robust health. However, the industry is now facing challenge of declining growth rates and increasing in competition among producers (Lent, 1995; Porter, 1980). In brief, the success of manga producers has also become their weakness. The industry's enormous market base has left little for expansion (Schodt, 1996). …