Linkages between firm innovation strategy, suppliers, product innovation, and business performance

Abstract

This study uses resource dependence theory to hypothesize that a buyer's innovation strategy enhances supplier innovation focus and a buyer-supplier relationship that supports product innovation. These in turn positively impact buyer product innovation outcomes and business performance. Moreover, it is argued that the buyer-supplier relationship positively moderates the impact of supplier innovation focus on product innovation. Design/Methodology: Structural equation modeling and hierarchical linear regression is used to test hypotheses. Findings: The results support all hypotheses and suggest that company (buyer) age and variables related to buyer engagement with international markets directly influence performance. They also indicate that the buyer-supplier relationship does not moderate the relationship between innovation strategy and innovation performance. Research Implications: Resource dependence theory suggests that firms lack all the resources needed to achieve their goals and that how they manage interdependencies with other entities influences their success. This study demonstrates that how a firm builds the conditions to effectively leverage the complementary resources and capabilities of suppliers directly influences innovation outcomes and business performance. Practical Implications: An important factor in firms achieving their product innovation goals is the selection and management of suppliers that are strategically aligned with regard to innovation. While managers need to develop internal innovation capabilities, partnering with like-minded organizations and creating conditions for effective cooperation is a key driver of innovation outcomes. Originality/Value: In contrast to prior research that has examined operational issues, this study shows how the strategic alignment of buyers and suppliers with regard to innovation is an antecedent of product innovation outcomes. Moreover, it adds to a limited literature on supply chain management practices in emerging markets.

Supply chains under resource pressure

“…Several studies (e.g. Moreira, 2005;Jajja et al, 2017) identified that effective integration of suppliers in product development entail several benefits such as cost reduction at product development, minimisation of failure risk and time taken in product development that can lead to a competitive advantage. When natural resources are scarce, the adoption of buffering strategies (e.g.…”

Resource-Based Product and Process Innovation Model: Theory Development and Empirical Validation

“…Product innovation scales identify the extent of the company's product innovation activities such as the improvements of existing products or services and the creation of entirely new products or services [17,23,25,34,68,69]. The high score on these scales means that the company tends to maintain a competitive advantage in the market by implementing a wider range of product innovation activities than their competitors [70][71][72][73].…”

“…Therefore, to clarify the boundaries of the research, this study focuses taxonomically on product versus process innovation in the context of operations management. Product innovation is illustrated as (i) a change made to the existing product or service for the benefit of customers [17,21,22] and (ii) a creation of entirely new product or service [23][24][25]. On the other hand, process innovation refers to a change in the method and knowledge that transform inputs into outputs [6,17,22,26].…”

“…On the other hand, process innovation refers to a change in the method and knowledge that transform inputs into outputs [6,17,22,26]. In other words, product innovation is considered improvement and creation at the end of the product or service offering [21,25,27], while process innovation is considered a change in the way a firm produces a product or service [19,[28][29][30].…”

Are different types of interfirm linkages conducive to different types of tourism innovation?

“…Partners can provide enhanced access to unique and valuable knowledge, which facilitates development of new products, redesigning of working practices, reconfiguring of the business models, and organizational changes. Moreover, partnering with like-minded organizations and creating conditions for effective cooperation are key drivers of innovation outcomes (Jajja, Kannan, Brah, & Hassan, 2017). Surprisingly, only a few studies have discussed the relationship between linkages and types of innovations (Durand et al, 2008;Leiponen & Helfat, 2010;Salazar et al, 2016).…”