Dominance versus collaboration models: French and Italian luxury fashion brands in Japan

Abstract

ABSTRACT This paper examines the entry strategies of luxury brands in Japan. It uses the global value chain framework and the literature on international business to discuss the entry strategies adopted by European brands on the Japanese market during the last seven decades. Two different business models, the dominance model and collaboration model, which are exemplified by French and Italian companies, respectively, are identified in our analysis. The findings of our analysis suggest Italian luxury fashion brands initially used the collaboration model to enter Japan; however, this approach caused conflict over time, which eventually resulted in the adoption of the dominance model and convergence with the French model. This paper demonstrates that when entering markets with a large psychic distance, Western luxury brands are more likely to face the paradox that the dominance model can only be achieved in a specific set of circumstances through a transitional collaboration with local partners. In our conclusions, we detail the managerial implications for practitioners in the luxury sector.