In 2025, ENSAPIA, a Japanese pioneer in digital fashion and avatar-based platforms, faces a strategic crossroads as generative AI reshapes the creative industries. Having built a highly profitable business around human “sensibility,” kawaii aesthetics, and deep community engagement, the company must decide how to leverage AI without commoditizing its core creative advantage.

The case is about the Hoshi Ryokan, a hot springs hotel in Japan established more than 1,300 years ago, that is among the world’s oldest family enterprises. Owned and managed by a descendant (or adopted son) of the founder for 46 generations, it is a popular with domestic and international tourists alike.