Small businesses in the global market: evidence from the fashion system of Vicenza province (Italy)

Abstract

Relevance. The paper seeks to explore how small and medium handicrafts can successfully compete in the globalized market. It questions, in particular, the relevance of the territory, of industrial districts and of the use of information technology to create innovative approaches to production and marketing, and consolidate the territory’s competitive position in global value chains. It highlights actual viable strategies for small and medium businesses operating in particularly complex sectors like those that are part of the “fashion system”. Thus, the article deals with an important part of the national industry in the moment of world-wide crisis. Research Objective. The article discusses successful strategies of small firms in clothing and fashion industry. Its purpose is to verify if and how handicrafts operating in the sectors particularly exposed to international competition succeed in competing effectively in international markets. The study tests the thesis that local dimension does not necessarily represent a disadvantage in the age of globalization and that even handicrafts can play at the international level. The study also verifies the role of territory in granting unique competitive advantage in the global market. Data and Methods. The methodological approach combines analysis of statistical data with four case studies. The work combines analytical and empirical approaches to highlight how a single business can reach levels of excellence in troubled markets. Results. The study demonstrates that handicrafts can find spaces for growth in such declining sectors as cloth production in developed countries, provided that they succeed in focusing on niche markets through process, product, and marketing innovations; in using up-to-date technology; and in exploiting territorially embedded values. In this context technology emerges as a strategic tool as it lowers transaction costs and entrance barriers, offers innovative opportunities for re-organizing production processes, and enlarges potential markets. Industrial districts, then, continue to represent a viable strategic advantage in terms of flexibility, know-how, and cooperation. Finally, the brand “made in Italy” confirms its status as an internationally recognized synonym of quality and fashionable design, opening companies the way to high level, luxury niches.