Investigating Dynamic Internationalisation Capabilities: The Case of Spanish Fashion Retailers

The Dynamic Capabilities View (DCV) has emerged as a compelling lens through which to study fashion retail internationalisation (RI), due to the environmental dynamism that characterises the sector and the need to adapt quickly to an increasingly turbulent global retail landscape. This thesis draws on the DCV to investigate how Spanish fashion retailers develop and nurture dynamic internationalisation capabilities (DICs) despite a weak country of origin (COO) effect and a much later development than their Western European counterparts. Notwithstanding these apparent handicaps, Spain is home to one of the world’s largest and most valuable fashion retail groups, Inditex, and a high proportion of its fashion firms have a diverse global footprint. For these reasons, Spain merits further academic attention to better understand the reasons behind these firms ’sustained international competitiveness. Despite the increasing popularity and relevance of the DCV, it has been criticised for failing to clearly identify its theoretical roots and the ambiguous terminology and contradictions in the extant literature. DCs are widely understood to be context-specific and path-dependent, yet there is a paucity of research integrating contextual analysis with the discernible gap concerning the influence of country context on DIC development in a fashion retail setting. Furthermore, whilst there has been growth in research addressing the microfoundations of DCs and their antecedents, these have been generally considered separately, rather than as inter-related constructs. The present study aims to address these shortcomings and provide a holistic account of DIC development by integrating microfoundations and antecedents into the study’s conceptual framework. This study therefore makes a unique and valuable contribution to the debate on DIC development by adopting a comprehensive perspective to enrich the literature and offer empirically developed insights into these factors’ inter-relationships. Through a sequential, two-phase interpretivist multiple case study research design, this study is the first to adopt a holistic approach to the investigation of DIC development in fashion firms. 13 semi-structured interviews with 9 industry experts were performed, providing macro-level insights into the country and sector-level antecedents of DICs. These were followed by 23 semi-structured interviews with key informants from 7 Spanish fashion retail case companies, triangulated with documentary evidence in order to understand the microfoundations of DICs and to build a comprehensive picture of the phenomenon. The findings from the reflexive thematic analysis confirm that DCs are complex and multi-level, and that the Spanish home market has played a critical role in the origins and evolution of DICs and the creation of favourable conditions for DIC development and nurturing. The coexistence of three inter-related antecedents (its industrial and design heritage, training ecosystem, and a country-specific Fashion Retail Culture) has endowed Spanish fashion firms with distinctive capabilities in design, retail, and logistics which they have exploited internationally, gaining a significant competitive advantage of speed and volume, and world-class benchmark status in the mid-market segment. Spanish fashion firms were found to possess a profound strategic agility, highly entrepreneurial management teams who create added value through customer responsiveness facilitated by a unique Spanish retail formula which facilitates an ambidextrous approach to internationalisation. Drawing on the case study findings, an applied conceptual framework is proposed which offers both theoretical and practical guidance on how fashion firms can develop and nurture DICs, and identifies the critical retail-specific DICs required for successful internationalisation. The study contributes to the literature in the fields of fashion RI, strategic management (SM), and wider international business (IB) and international entrepreneurship (IE) streams by providing insights into how sensing, seizing, and reconfiguring DCs function in the internationalisation process.