Italian SME International Strategies: evidences From Local Clusters in the Fashion Industry

The aim of this chapter is to analyse the role of small to medium enterprises (SMEs) in Italy and their recent competitive strategies facing globalization. In particular, we focus on firms in the fashion business considered in a broad sense (textile, apparel, shoes, leather goods, gold and jewellery). ‘Made in Italy’ – and particularly ‘in Tuscany’ – has strong market power and a world- wide known reputation in the fashion industry (firms such as Gucci, Prada and Ferragamo are located in Tuscany). Nevertheless, after years of constant growth, the Italian fashion industry has steadily slowed down, partly as a consequence of a negative international conjuncture and of the emergence of new competitors (such as China). In this changed competitive scenario, we focus on a few specific research objectives, sum- marized in the following research questions: 1. Among the numerous relevant variables, what are the peculiarities of Italian SMEs? 2. Among the competitive dynamics of the fashion business, how important is the ter- ritory and belonging to a local cluster, in differentiating firm performances; to what extent does it influence the entrepreneurial development? 3. Within the above-mentioned clusters, do firms have homogeneous or different struc- tural characteristics and behaviours? In the case of differences, is it possible to iden- tify business typologies? At first glance, a few ‘leading firms’ seem to play a primary role in the local development process and to be characterized by a different endow- ment of resources and competencies when compared to other firms. 4. In terms of international approach, are there any differences in SME strategies and performances? We adopt an interdisciplinary approach to the analysis. We discuss the competitive advan- tage of ‘Made in Italy’ and the recent challenges in the international markets with an ‘eclectic explanation’ organized along three different levels: 1. industry-specific – different strategies and performances can be explained in terms of sector analysis; 2. cluster-specific – the entrepreneurial development is spatially concentrated in local production ‘clusters’, or industrial districts, dominated by SMEs; in particular, we focus our attention on the Arezzo industrial districts, based on the assumption that they are representative of the Italian model of production (Arezzo clusters are among the two hundred or so Italian industrial districts); 3. firm-specific – within the same cluster there are different types of firms that adopt different strategies (Porter, 1990); in particular, SMEs seem to be influenced by some leading companies located in the territory; international strategies can be different in terms of market approach (‘do-it-alone’, or subcontracting strategies) and in terms of performances.