SME Internationalisation; case study on the Nigerian fashion industry

Hargley Jessica Ifunanyachika (2018) SME Internationalisation; case study on the Nigerian fashion industry. Faculty of International Management and Business.

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SUMMARY- JESSICA HARGLEY TOPIC: SME INTERNATIONALISATION; CASE STUDY ON THE NIGERIAN FASHION INDUSTRY To sum it all, SMEs are important to every economy, big small or in between. As they serve as engines for growth and low unemployment amongst others. In the case of Nigeria, it is even more important, because of the growing crucial need for a diversified economy, due to the drop in the oil prices, plus the fact that over-dependence on a natural resource or particular sector of the economy will lead to no good, hence the natural resource curse. From different surveys and company case study used in this research, it is obvious that despite the natural endowment of working population, SME clusters, Nigeria is still yet to benefit from the SME sector, due to a number of prevalent challenges such as the infrastructural deficit in the country; unstable electricity, poor road, and road network. In addition to that accessing finance, Government support and communication to these SMEs have been found to be below expectation. Even the SMEDAN survey revealed that SME awareness of their activities was low. And this needs to be addressed bearing in mind that despite all these challenges they still contribute almost half of the GDP. Hence investment in the SME sector is definitely a good way to solve these problems. Also, the labor-intensive nature of SME which aids in the reduction of unemployment, the low cost of starting and maintain SME is also a plus. Investment into the fashion sector and its clusters could also attract large multinationals into the country, which would result in to these firms especially those engaged in the raw material or semi-finished aspect to participating in the global value chains, which can lead to upgrading of different types: product, process etc, and even infrastructural development if proper negotiations are done. And ultimately investment into the country. The fashion industry abroad differs from the fashion industry in Nigeria firstly, based on its area of operation. The fashion industry in Nigeria operates highly in bespoke tailoring (custom made clothing/made-to-fit) unlike the fashion industry abroad where bespoke tailoring is rare and very expensive. The African prints and its usage also sets it apart from others. The fashion industry is particularly worth the attention of the Nigerian Government due to its creative nature, which can be easily accepted internationally and can help to brand of the natural SME clusters in the country and encourage domestic patronage, and most importantly has shown that there is a demand for it abroad. Also, evidence form its past glory in the history of the country is proof that it can yield great benefit to the economy. Nigeria fashion is rich in culture and vibrant with colour which many designs abroad get inspiration from, plus a growing demand for its products abroad. The challenges facing the SMEs in Nigeria, both generally and particularly to the fashion industry centre around infrastructural deficiencies in the country, which affect the manufacturing, importation, and purchase of raw material which make up the bulk of expenses in the industry. Therefore, infrastructural developments in the country in term of electricity, road network, and I.T would simultaneously affect the fashion industry positively. The opportunities both for the economy and the SMEs from the research, the respondents and my little participation in the industry have been discovered to be endless. The case studies used for this research include two SMEs (using the above 10 and below 50 criteria) both of who have participated in the international market via exports abroad based on client orders. Their challenges revolve around infrastructural deficiencies, and differences in standard measurement. They believe the opportunities/benefits from internationalising, are endless and can improve brand strength. The last company in the case study is an MSME, who has not participated in the international market, but plans to do so which the motivation of increasing revenue and faced with the same challenges as any other SME. SMEs internationalise in a variety of way, just like multinational companies do. They could participate via global chains, solicited and unsolicited exports, following every stage of foreign direct investment or skip certain stages as they desire. However, due to their small nature, the struggles of internationalisation tend to have a bigger impact on them. Based on their means of internationalisation and participation in the international market they have been classified into 1) Inquisitive 2) Unfulfilled 3) Tentative 4) Passionate 5) Fruitful (Lloyd-Reason & Mughan, 2003). From research and the case study carried out, we can say that classification 1 and 2 do not hold, 3 and 4 is partly applicable and 5 is applicable based on the level/stage of participation in the international market. Research and our analysis using the OLI Framework under the economic approach to understanding SME internationalisation reveal that all advantages; Ownership, Location and Internalisation exist(though more strongly in the future) and are a motivating factor for SMEs in this sector to participate in international markets. Using the stages approach we reached the conclusion that SMEs internationalise according to the stages approach. However, the second principle Psychological distance does not really hold for the SMEs used in the case study. However, this principle should normally hold true for most SMEs, as the theory its explains is the natural reaction of most companies, big or small. Using the Network approach, we discovered that it does not hold true for the SMEs, which can be attributed to the fact that they participate in the international market at the surface level i.e. through inconsistent exports abroad. Hence, they have not gotten the opportunity to be a part of existing networks. Using the Pull and Push theory to analyse their motivations, it was discovered directly and indirectly that negative external factors serve as motivation for SME creation and participation in the international market. It would seem from research, the respondents and my little participation in the industry, that although the SMEs have a role to play to increase participation in the industry, and yield maximum result/benefit certain things have to be in place like; But the role of the government is more important

English title



Budapest Business University


Faculty of International Management and Business


Nemzetközi Gazdaságtan Tanszék




Nemzetközi Gazdálkodás (angol nyelvű)


Konzulens neve
Konzulens típusa
Assignment, Scientific qualification, Institution
Miss SASS, Tolgyessy Magdolna
Professor, BGE

Item Type: Thesis (UNSPECIFIED)
Uncontrolled Keywords: Kis- és középvállalkozás, Divat, Nemzetköziesedés, Esettanulmány, Nigéria
Depositing User: Turányi Nóra
Date Deposited: 2018. May. 14. 11:50
Last Modified: 2020. Apr. 23. 05:43

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