STRATEGIC DEVELOPMENT IN INDONESIA'S FASHION BAG ACCESSORIES INDUSTRY: THE ROLE OF DESIGN INNOVATION, DIGITAL TRANSFORMATION, AND SUSTAINABILITY IN ACHIEVING COMPETITIVE ADVANTAGE

Abstract

The fashion bag accessories industry in Indonesia has experienced rapid growth, driven by shifting consumer preferences, digital transformation, and increasing sustainability awareness. However, intensifying competition and the influx of low-cost imported products present significant challenges for local brands. This study aims to analyze the competitive dynamics of the industry using PEST analysis and Porter's Five Forces, and to identify how the integration of design innovation, digital branding, and sustainability contributes to competitive advantage. This research employs a qualitative descriptive approach using secondary data from industry reports, academic literature, and relevant case studies. The findings reveal that external factors, particularly technological advancements and socio-cultural changes, significantly influence industry dynamics, while internal capabilities play a crucial role in shaping firm competitiveness. Furthermore, many businesses still adopt fragmented strategies and have not yet effectively integrated innovation, digitalization, and sustainability. This study proposes an integrative strategic model that demonstrates how the alignment of design innovation, digital branding, and sustainability can strengthen competitive advantage. The findings provide both theoretical and practical contributions to the development of strategic management in the fashion accessories industry.