The impact of specific supplier development efforts on buyer competitive advantage: an empirical model

Wenli Li, Paul K. Humphreys, Cheong Leung Yeung, T. C. E. Cheng

Research output: Journal article publicationJournal articleAcademic researchpeer-review

101 Citations (Scopus)

Abstract

This paper examines the relationships between supplier development efforts and buyer competitive advantage from the buyer's perspective, and seeks to understand how specific supplier development efforts may impact on a buyer's operational performance. We conducted a survey of 142 electronics manufacturing companies in Hong Kong, and applied structural equation modeling (SEM) to test a structural model that postulates the impacts of various efforts of supplier development on buyer competitive advantage. The results indicate that each effort of supplier development has a different effect on different dimensions of buyer competitive advantage. Specifically, we found that joint actions and trust appear to be the two most critical elements to enhance the operational effectiveness of a buyer, while asset specificity improves the market responsiveness of a buyer slightly. However, supplier development efforts like increasing supplier performance goals and recognizing supplier progress do not appear to be an effective means and thus should be practised with caution. This study provides significant insights into the specific impact of various supplier development efforts for both academics and practitioners.
Original languageEnglish
Pages (from-to)230-247
Number of pages18
JournalInternational Journal of Production Economics
Volume106
Issue number1
DOIs
Publication statusPublished - 1 Mar 2007

Keywords

  • Competitive advantage
  • Operational effectiveness
  • Supplier development

ASJC Scopus subject areas

  • Business, Management and Accounting(all)
  • Economics and Econometrics
  • Management Science and Operations Research
  • Industrial and Manufacturing Engineering

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