Porter's Five Forces Perspective Review on the Development of Micro and Small-Scale Fashion Businesses

Abstract

Background: Fashion micro and small-scale enterprises (MSMEs) in Central Java are encountering intense competition from comparable entities operating at both national and international levels.

Objectives: This research aims to analyse Porter’s Five Forces framework, with digital integration and innovation, in the development of fashion businesses.

Methodology: The Five Forces analysis offered a comprehensive framework, including aspects of competition, supplier power, barriers to entry, threats posed by substitute products or services, and buyer power, to assess MSME development. Fashion MSMEs in Central Java were analysed using a qualitative method. Furthermore, the analysis was conducted in the five largest social media user regencies in Central Java, namely Klaten, Semarang, Pemalang, Tegal, and Jepara.

Results: The application of Porter's Five Forces remained a relevant and effective strategy for developing fashion MSMEs. However, the integration of digitalisation and innovation was essential in responding to the demands of globalisation. Even though the fashion business adopted digitalisation as a supporting role, innovation remained the primary driver of the development.

Conclusion: Intense competition in the fashion industry necessitates innovation that prioritises product uniqueness, a trend expected to remain important over time.

Unique Contribution: This study offers a unique contribution by empirically integrating digital transformation and innovation into Porter's Five Forces framework, validating its continued relevance and effectiveness for developing small-scale enterprises. It provides novel strategic guidance by demonstrating that innovation—rather than digitalisation as a supporting tool—remains the primary driver of competitive uniqueness among fashion MSMEs in emerging regional markets such as Central Java.

Key Recommendation: This study strongly recommends that online travel service providers, marketers, and executive leaders of fashion MSMEs in Central Java prioritise innovation and product uniqueness as the core competitive strategy. They should primarily leverage digitalisation as a supporting tool to improve market access and operational efficiency, rather than treating it as the main driver of competitive advantage, thereby aligning strategies with the persistent demands of intense market competition.