Fashion Brand Internationalization: Opportunities and Challenges

160 Pages·2016·3.809 MB·English

by  Byoungho Jin, Elena Cedrola (eds.)

PALGRAVE STUDIES IN PRACTICE: GLOBAL
FASHION BRAND MANAGEMENT
Series Editors: Byoungho Jin and
Elena Cedrola
FASHION BRAND
INTERNATIONALIZATION
Opportunities and
Challenges
Edited by
Byoungho Jin and
Elena Cedrola
Palgrave Studies in Practice: Global Fashion Brand
Management
Series Editors
Byoungho   Jin
Department of Consumer, Apparel, and Retail Studies
The University of North Carolina at Greensboro
North Carolina ,   USA
Elena   Cedrola
Department of Economics and Law
University of Macerata
Macerata ,   Italy
Branding and internationalization are critical aspects of any business,
and the fashion industry is especially global in nature. Very few apparel
items are entirely produced within one country, and it is relatively easier
for fashion brands to enter international markets because little fi nancial
investment is required, small-scale retail space is possible, and economies
of scale can be maximized. Accordingly, there are more successful interna-
tionalization cases in the fashion industry than any other sector, yet no one
text handles these critical topics (i.e., branding and internationalization)
in one book, particularly in case study format. This series will focus on
fashion brand cases that have been successful in global marketplaces. By
examining their strategies in diverse aspects such as internationalization,
innovation, branding and communication, and retail management, these
books will help students, scholars, and practitioners grasp lesser-known yet
effective international marketing strategies.
More information about this series at
http://www.springer.com/series/14598
Byoungho Jin • E lena C edrola
Editors
Fashion Brand
Internationalization
Opportunities and Challenges
Editors
Byoungho Jin Elena Cedrola
Department of Consumer, Apparel, Department of Economics and Law
and Retail Studies University of Macerata
The University of North Carolina at Macerata, Italy
Greensboro
North Carolina, USA
Palgrave Studies in Practice: Global Fashion Brand Management
ISBN 978-1-137-52336-5 ISBN 978-1-137-52337-2 (eBook)
DOI 10.1057/978-1-137-52337-2
Library of Congress Control Number: 2016943306
© The Editor(s) (if applicable) and The Author(s) 2 016
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translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on
microfi lms or in any other physical way, and transmission or information storage and retrieval,
electronic adaptation, computer software, or by similar or dissimilar methodology now
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The use of general descriptive names, registered names, trademarks, service marks, etc. in this
publication does not imply, even in the absence of a specifi c statement, that such names are
exempt from the relevant protective laws and regulations and therefore free for general use.
The publisher, the authors and the editors are safe to assume that the advice and information
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To my Lord: without him, I am nothing
BJ & EC
To Andrew and Lauren, love and inspiration of my life
BJ
To the great men in my life: Raffaele, Umberto, Niccolò and Giuseppe
EC

P
REFACE
Internationalization is critical for any business, and especially so for global-
by- nature fashion brands. Of the many industry sectors, fashion is prob-
ably one of the most active in terms of internationalization. Compared
with other industry sectors, it is generally easier for fashion brands to enter
international markets because little fi nancial investment is required, small-
scale retail space is possible, and economies of scale can be maximized.
Moreover, the dynamic global market, widespread supplier networks and
supply chains strengthen the fashion industry’s advantage in internation-
alization. As a result, there are more successful internationalization cases
in the fashion industry than in any other sector.
A majority of global fashion brands operate beyond their home coun-
tries and a signifi cant number of these brands make more than half of their
revenues from international operations. For example, revenues from inter-
national operation are as high as 95 % for H&M, 80 % for Inditex, S.A.,
and 68 % for Nike. Leading luxury fashion group LVMH earns 88 % of its
retail sales from 76 different countries.
Despite the unprecedented scale of fashion brands’ internationalization
in recent decades, not much is known about its specifi c features. The global
fashion industry is intrinsically complex and cooperative, so analysis of its
multiple layers provides profound insights into the industry and its manage-
ment. Case study analysis also helps answer questions about what is happen-
ing, why and how. Nonetheless, case studies are a rarity within the literature.
This book presents a collection of case studies of fashion companies of
various sizes and cultural backgrounds. Each case is written by author(s)
from the brand’s country of origin and based on original documents
vii
viii PREFACE
and interviews with key informants, some of which have previously been
unavailable in English. These case studies therefore provide a higher level
of detailed and accurate information and practical insights into the indus-
try’s competitive landscape and its future.
The book is a useful read for undergraduate as well as graduate students
with an interest in the fashion industry, retailing, branding and interna-
tional business. It will be an excellent resource for scholars researching fash-
ion brand internationalization thanks to its review of the literature and its
insights into fashion brands’ internationalization strategies. Professionals
in the fashion and apparel industry will also fi nd it worth reading because
globalization issues are critical to their business survival.
This volume consists of fi ve chapters combining theory with practice.
The fi rst chapter reviews the characteristics of the fashion industry and its
products, traditional internationalization models and entry mode choices,
and the main differences between manufacturing internationalization and
retailing internationalization. Major emerging trends in fashion brand
internationalization are then examined, including the increase in Asian
apparel brand internationalization, the rise of international out-shopping
both online and offl ine, the acquisition of leading global fashion brands
by companies from developing countries, and China’s infl uence on the
expansion of fashion brands. An understanding of these trends will pro-
vide global fashion brand companies with insights as to the challenges and
opportunities presented by these new shifts.
The book discusses four global fashion brand cases that are carefully
selected to refl ect the diverse aspects and trends of their internationaliza-
tion endeavors. The fi rst case (Chap. 2 ) demonstrates how Zegna, a fourth-
generation family-owned Italian business, evolved from a producer of
high-quality fabrics into a global luxury fashion brand. It emphasizes the
importance of local community and family values in brands’ international
outlook. Despite the delocalization of some production plants from Italy
to Switzerland, Spain, Turkey and Mexico, the company demonstrates how
strong brand reputation and company values together with cohesive vertical
integration choices can sustain business growth both locally and globally.
Case two (Chap. 3 ), Diesel, is a relatively small and more recently
established Italian company targeting younger consumers. The founder
succeeded in reinventing denim fabric in a mature market characterized by
fi erce competition and the leading presence of American m ultinationals.
Innovation, creativity and non-conformist choices are the fundamentals
of the company. The Diesel case also demonstrates how the company
PREFACE ix
achieved sustained growth in both national and international markets by
repositioning a mature product from medium to high quality and from
medium to high price.
Cases three and four illustrate two Asian brands: Bossini from Hong
Kong (Chap. 4 ) and Beaucre Merchandising from South Korea (Chap. 5 ) .
These two cases, unlike Italian Zegna and Diesel, are rather small and tar-
get mid-to-high-priced markets, providing unique knowledge and insights
into the contemporary fashion business. Internationalization is a relatively
new phenomenon for Asian brands, and there were fewer examples for
Bossini and Beaucre Merchandising to rely on. Moreover, without a strong
brand or country image the two brands encountered more challenges
despite expanding into psychically close neighboring Asian countries fi rst.
For instance, Korean Beaucre Merchandising entered the Chinese market
at a very early stage, enjoyed fi rst-mover advantage, but had to fi nd creative
solutions to a number of challenges. The two Asian cases prove that fashion
brands with less powerful brand and country images can still fi nd ways to
compete in the global marketplace. Rome was not built in a day, nor is a
global fashion brand. The four global fashion brand cases in this volume are
thus put together in the hope that their examples and internationalization
stories will inspire more fashion brands to success in global marketplaces.
Our fi rst and deepest gratitude goes to two chairmen, Paolo Zegna at
Zegna group and Man Joong Lee at Beaucre Merchandising, who took time
from their busy schedules to share their stories and unique experiences with
us and to review earlier drafts. Their insights and vision will inspire busi-
ness executives to come. Special thanks go to authors of each chapter for
providing insightful cases incorporating information and sources not read-
ily available to many readers. The information is of particular value since
their observation of the history of each brand in their home country and
their own experiences as consumers are embedded in their analyses. We were
fortunate to be supported by many former and current research assistants.
Particular thanks are due to Hee Soon Yang, Junghwa Son, Hongjoo Woo,
Hisu-Chun (Wendy) Chou and Naeun (Lauren) Kim for fi nding informa-
tion for the books and designing and revising many fi gures and tables. We
also thank Lavinia Caini and Letizia Trabaldo Togna for fi nding information
and supporting bibliometric analysis.
Byoungho   J in
Greensboro, NC, USA
E lena   C edrola
M acerata, Italy