Creating Competitive Advantage Through New Technologies: A 21st Century Approach for the Luxury Market

Abstract

Today's luxury markets are in a turmoil. They experience heightened competition, an increased market dynamism and try to find back to their old strength of being innovative in an environment characterized by digitalization and technological change. In this environment, existing approaches to achieve competitive advantage are more and more insufficient. Thus, luxury firms have a clear need to find new ways to successfully (re)create and defend their competitive position. New technologies promise great value and an opportunity to recreate luxury firms´ innovativeness in a modern way. Therefore, this paper aims to explore and explain how international luxury firms can create a competitive advantage through new technologies. To investigate the research problem, ten semi-structured interviews with representatives from the luxury market were conducted. The findings of the study indicate that luxury firms can achieve a competitive advantage by crafting a unique strategy, which aims to create customer values through new technologies. More specifically, these values are convenience, customization, hedonism, reassurance and sense of belonging. Furthermore, it was found that specific factors from the internal and external environment have to be taken into consideration. Finally, three technology attitudes could be identified, which can guide firms their way from integrating new technologies into their strategy to achieving competitive advantage. These findings were condensed into a explanatory framework. Hence, this thesis contributes to the development and extension of existing approaches for achieving competitive advantage by placing them in the context of the luxury market and taking into consideration new technologies as core of the competitive strategy. Furthermore, it gives international luxury firms guidance on how they can make use of new technologies to create a competitive advantage.