This paper examines the influence of foreign alliances on competitive advantage in the Japanese record industry prior to World War Ⅱ. In pre-war Japan, the main industry competitors were Nihon Chikuonki Shokai (NCS), Nihon Victor Chikuonki (NVC), Nihon Polidor Chikuonki (NPC), King Record (King), Teikoku Chikuonki (Teikoku), and Dainihon Chikuonki (Dainihon). NCS and NVC had alliances with companies in the United Kingdom and the United States, while NPC and King partnered with German record companies. In contrast, Teikoku and Dainihon remained purely Japanese companies, without foreign affiliations.
What benefits did the record companies receive from their foreign partnerships? And, how did the alliances influence the strategies of their counterparts?
As concerns Western music recordings, the companies with foreign alliances maintained a formidable competitive advantage throughout the pre-war period. On the other hand, for recordings of Japanese music, technological disparity between firms with foreign alliances and solely Japanese firms were essntially erased, and the latter rose to competiveness with the former, especially in the so-called “ryukoka” (Japanese popular songs) market. Thus, the foreign-allied-companies were forced to focus on Japanese music more than ever, this in turn accelerated the expansion of the Japanese music records market. In this context, foreign-partnered companies, such as NCS and NVC, made important contributions to “the golden age of ryukoka”.
Until the beginning of the 1930s, the keys to competitive advantage in the Japanese record industry involved the introduction of new technologies and the sale of Western music records, based on alliances with foreign companies. After the mid-1930s, however, the capability to produce and sell records of Japanese music played a larger role in determining competitive advantage within the industry.
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