Swedish fashion retailers international market selection process

Abstract: The Swedish fashion industry can be described as small, but yet very high competitive. Large fashion chains are taking over the market at the expense of mom & pop stores, which are constantly decreasing in numbers. Lately, many international players has entered the Swedish market and increased the competition even more. With falling trade and investment barriers and technological innovation more and more Swedish fashion retail companies see new opportunities for increased profit and growth by expanding the business abroad. Globalization has created great opportunities for these companies to enter far-away markets, yet many of them tend to start internationalizing in nearby markets. The purpose of this study is to create an understanding of how Swedish fashion retailers that want to expand globally decide which international markets to enter. It is a multiple-case study where the focus is on the international market selection process of Lindex and Indiska Magasinet. Through literature studies and interviews with foreign expansion managers at these companies as well as two other key players with attachment to the subject, I have increased my knowledge within this area. Since the study is aiming at understanding Swedish fashion retailers foreign market decisions I have chosen to use a qualitative approach, so that I can keep an interpretative point of view. The study results show that both Indiska Magasinet and Lindex have gradually increased its international involvement. Both companies have started to internationalize to nearby markets and are now heading to more distant countries. This expansion strategy has its pros and cons, but still, it seems to be more advantageous for both companies. The study also shows that neither Lindex nor Indiska Magasinet has taken the macro environmental forces into consideration as much as needed in the screening process for potential foreign markets. Considering the difficulties these companies have faced in certain markets, a slower expansion rate and improvement in the market screening and identification process seems necessary in order to reduce the risk of making similar mistakes in the future. Keywords: Swedish fashion retailers, foreign expansion, identification, nearby markets, important forces