AKB48 Going Global A Case Solution

However, these are becoming redundant in the modern era as the millennials prefer online content. There are various recommendations and potential solutions to the critical issues faced by AKB48. In the short run, the incorporation of digital technology by partnering with a tech firm is necessary to tap the online market. Digital algorithms to reach and engage a wider audience is crucial in sustaining the success of AKB48. As other mediums are becoming obsolete at an increasing pace, this step will be crucial in aiding AKB48 in maintaining its success.

Additionally, diversity in training and hiring procedures to produce content tailored to other cultures is instrumental in the pursuit of global expansion. When hiring new performers, the AKB48 management team should include performers from various ethnic and cultural backgrounds, not just Japanese women. Also, the content needs to be considerate of the concerned culture and not harm their sentiments; for example, if the group is performing in Korea, it should be respectful of the Korean culture. 

Also, at the same time, retention of the home market of Japan can be done by utilizing the conventional television medium as that remains popular in the country. Therefore, despite becoming a global brand, AKB48 will be able to maintain its primary target market. These measures will be crucial in increasing revenue streams as well as the market share of AKB48. It will improve the return on investment whilst at the same time enabling the brand to play globally on its comparative advantage.

2. Internal Analysis

AKB48, with a novel business model, sought to provide an innovative means of entertainment to the Japanese audience. It functioned on the aspect of creativity and offered a unique blend of unedited performances. The AKB48 strategized to utilize the growing influence of the internet. The group thrived on customer engagement by keeping them involved by conducting elections to vote for which girls to and asking fans for constructive feedback. Fans would be given opportunities to meet their “idol” performers as well. Such means of communication with the consumers effectively placed AKB48 as a national icon (Alcacer, et al., 2017).

The AKB48 business model had various strengths and weaknesses. The SWOT analysis (Figure 1 and Figure 2) will be utilized to evaluate the strengths and weaknesses of AKB48. A major strength of the AKB48 group is the creative aspect of each performance. The management team is innovative and flexible. This helps form a connection with the consumer base, which is delighted by originality rather than typical edited performances. As the average consumer desires authenticity, the brand can resonate in the minds of consumers (DeGruttola, 2019). AKB48 focuses on customer engagement. General elections were conducted so fans could choose which performers could perform. Fans were thoroughly involved in the whole process and had a constructive role to play in improving the performances. Also, the girls had personalized profiles over the internet, which increased popularity. Another strength of the group is the multiple revenue streams- selling CDs, theatre performances, and advertisements. Despite the waning popularity of CDs in Japan, AKB48 was able to sell more than a million copies in 2010. Working with Dentsu, the advertising agency was another major strength of AKB48 as it allowed it to have multifarious clients and earn considerable revenue. As posited by the SWOT analysis (Figure 2), AKB48’s weaknesses were a lack of adaptability of content to suit other cultures, thus inhibiting chances of acceptance of the same content in other cultures. Also, it's over-reliance on Dentsu reflected that it could not use the expertise of other agencies.  

3. Analysis of the External Environment 

As depicted in Figure 2, the opportunities and threats faced by a business are categorized as external factors which the organization can utilize and combat, respectively.  An opportunity for the group, as mentioned in the case study, is the expansion of the model globally, and a serious potential threat is the copying of the model by competitors due to its widespread success, as is the case usually in the business landscape (Ekekwe, 2012). For global expansion, 5 potential countries were suggested by Dentsu- China, Thailand, South Korea, Taiwan, the Philippines, and Indonesia. However, the success of the AKB48 business model in these countries is dubious due to the overall external environment where the entertainment industry is concerned.

The five forces model by Porter (Figure 3) and the PESTEL Analysis (Figure 4) are instrumental in analyzing industry trends. The entertainment industry's success, which AKB48 is a part of, is dependent on discretionary spending by consumers, which implies that with economic stability comes stable spending on entertainment. With the declining economic stability across countries, this is likely to be limited. Also, a transition from theatres to online content is crucial as the advent of technology has made the consumer less desirous to put effort into the content. Therefore, attention should be paid by AKB48 on producing attractive online content (Arnold, 2019). The AKB48 model is unique, but barriers to entry in the category are low. With the globalization of entertainment, the content made should appeal to the global audience rather than being limited to a region to ensure the success of the brand. However, the threat of piracy remains a major concern and is quite common, especially where legislation is weak. Therefore, the threat of substitutes is high (DeBenedetti, 2020).