Developing a Model for Animation Industry International Market Entry with Grounded Theory Method

Document Type : Original Article


1 Associate professor & faculty member of Management department, University of Semnan

2 PhD. Student in commercial management at University of Semnan


Introduction: Developing a business can be achieved through increasing the size of its market and the main characteristic determining a market’s size is geography. Increasing market geographical range of scope throughout of borders of the country of origin brings international market entry into conceptualization area. However, creative industries including film, publication, fine arts, performing arts, and etc. are disciplines have been considered as instances influencing on economic development and participating in the international market is a speculative aspect of their flourishment. The animation industry is one of the most prevalent sectors in the creative economy that has considerable potentials to become an effective actor of cultural industry internationalization. As so in other sectors, the animation industry has been considered on behalf of artistic approach rather than an industrial one. The main point of parity in industrial approach is the importance of the concept of economic value which is less considered as a factor in artistic approach. Another concern in international market entry of Iranian animation industry is the role of government. Similar to many other industries in Iran and the general economic background of this country in governmental meddling in the market, animation industry as a critical sector of cultural tools in public propaganda has been affected significantly. Lack of understanding audience as a consumer, the expectation of project financing from public institutions, non-artistic supervision of financiers on project content, and lack of understanding the importance of economic value in business are the main factors affecting the problem from governmental side. On the other side, animation producers and studio executives, lack of professionalism, global market outsiders, and unfamiliarity with global animation business setting are non-governmental factors of the problem. Main dimensions of these factors are identified and categorized in this research and main areas of strategic emphasis are discussed.
Methodology: Here we are not trying to test the existing models of internationalization of the animation industry as there is not a dedicated one. The first step to developing such a model is to identify the main dimensions of the research question. Accordingly, this is a qualitative research and its approach situates us somewhere between deduction and induction, i.e., abduction. Abduction means selecting or inventing a hypothesis that explains a particular empirical case or set of data better than any other candidate hypotheses, as a provisional hypothesis and worthy candidate for further investigation. The research strategy is Strauss’s Grounded Theory that develops a paradigm model including causes, contextual conditions, intervening conditions, actions and interactions (strategies), and consequences being modeled around the basic phenomenon. Causes are normally only valid in a particular set of conditions. The most particularly important point for developing an action-based theory is an identification of promoting and restricting conditions affecting possibilities of actions and reactions. Contextual conditions include time, place, and duration while intervening conditions are about the social, political, and cultural environment. Actions and interactions are processes and have sequence and so it is more proper to ask about sequences and temporary courses of action. Additionally, they are goal-oriented and are usually performed for particular and specific reasons for which reason one may refer to strategies or tactics. Methods of gathering data are observation, in-depth interview with animation industry experts, and studying studio documents and case studies. Interviewees were animation directors, animation producers, studio executives, and related governmental institution managers like the Institute for the Intellectual Development of Children and Young Adults and Iranian Animation House. Scripts of interviews have been analyzed through open, axial, and selective coding with paradigm grounded theory approach of Strauss and Corbin. Data in open coding are broken down analytically to extract concepts from interviews. The concepts have been refined and differentiated into categories through axial coding and finally with selective coding propositions are developed and paradigm model is formulated.
Findings:The main phenomenon of research was international market entry for an Iranian animation industry. According to paradigm model developed after analysis of interviews this phenomenon has causes including governmental monopoly, progress of competitor countries, and attractiveness of international markets. This means private studios find international market potentially more profitable and dynamic for generating economic value. In domestic market they have to obey restrict regulations of public institutions on content and compete with governmental producers on achieving broadcast time in IRIB the only television distribution channel available for achieving audience. On the other side, poor quality of TV domestic contents leads to the most portion of audience being inclined to overseas satellite Persian language channels that have identified Iranian video consuming potential and is utilizing it with the support of open business settings of their home countries including Turkey, South Korea, and Arab nations of Persian Gulf side. There are conditions affect actions and interactions including political issues, public policies, professional approach necessity, and financing as intervening conditions and gradual progress, independent production, and dependency to government as contextual conditions. In public policies, as the most important contextual condition, government policies in culture sector and the type of its support and export drivers are the main subjects of importance. Non-financial supports like technical training, business knowledge, professionalism, and commercial negotiating courses for studios, providing studios with software and hardware facilities like render farms based on renting, tax facilitating policies, reducing content supervising, promoting cultural sponsorship culture among investors, regulations reforming, are reducing government intervention in market in order to making real market are the most important supporting policies. Among intervening conditions, gradual progress is the most important and shows that internationalization model of Iranian animation industry seems to have the most tendency to Uppsala model. International networking as the other intervening condition restricts the path to the revised Uppsala model where the factors of insidership and outsidership determined the company’s success probability in international market. Actions and interactions for achieving the main phenomenon are product marketing, market study, foreign networking, product form and content, and strategic management. Marketing strategy is the most important and critical phase of animation industry internationalization. As it has been discovered in literature, the most critical and differentiating competitive advantage of global factories is marketing and branding. For Iranian animation studios that mainly should plan their activities on gradual internationalization, B2B marketing would be more critical than B2C. This is mainly because their customers in initial steps of entering foreign market are channels, sale agents, or big producers. Finally, consequences of these strategies would be international market development, foreign sales and profitability. It must be considered that a studio is an economic firm and the most important factor for a firm is profitability that comes mainly from audience. Even if the firm has cultural concerns and wants to deliver ethical, religious, or nationalistic messages, the prerequisite for the message to be heard is that the product being consumed by the consumer, here the audience.
Originality: Lack of a relatively comprehensive model for international market entry of cultural industry leads to somehow originality for this work. Current few models are mainly focused on conditions and consequences. The topic of the study is another originality where considering cultural products from industrial point of view is not so usual among Iranian business and culture scholars. As a matter of research methodology utilizing qualitative approach and method for identifying dimensions of a cultural phenomenon and developing theory explaining it is somehow unique in cultural industry literature.


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