Role of product innovation in internationalization of fashion companies

Abstract

Objectives The main objective of this study is to examine the impact of product innovation in the internationalization process of fashion brands around the world. This thesis then dig deeper into the internationalization strategy of these companies to understand the relationship between product innovation and choice of markets, expansion modes as well as competitiveness.

Summary This thesis is based on secondary data. Through empirical qualitative data of the three case companies, this study aims to investigate the influence of different types of product innovation on the internationalization of fashion companies as well as the similarities and differences in the internationalization strategy of these firms. Furthermore, the connection between product innovation and determinants of internationalization strategy, including target market, expansion mode and competition, is uncovered as well. Following the findings, discussion is generated to compare the outcome of the research with previous work and highlight the differences.

Conclusions Product innovation provides differentiated products, which in turn facilitates the internationalization process of fashion companies. However, there is no clear consensus which type of product innovation is the most effective in this process. Moreover, product innovation affects market selection process. Specifically, product innovation generates opportunities for experiential learning, knowledge creation, and trust-building. Besides, product innovation influences the choice of entry mode since firms tend to choose expansion mode with highest level of control as possible to avoid sharing knowledge. Lastly, product innovation increases competitiveness of apparel firms in the international market.