Strategic Suppliers' Technical Contributions to New Product Advantage: Substitution and Configuration Options

Abstract

Current theory lacks clarity on how different kinds of resources contribute to new product advantage, or how firms can combine different resources to achieve a new product advantage. While several studies have identified different firm‐specific resources that influence new product advantage, comparatively little research has explored the contribution of strategic supplier resources. Combining resource‐based and relational perspectives, this study develops a theoretical model investigating how a strategic supplier's technical capabilities impact focal firm new product advantage and how firms combine different resources to gain this advantage. The model is tested using detailed survey data collected from 153 interorganizational new product development projects in the United Kingdom within which a strategic supplier had been extensively involved. Empirical results support our research hypotheses. First, supplier technical performance is shown to have a significant positive impact on new product advantage. Next, we show that while supplier technical capabilities have a positive influence on supplier technical performance, the a priori nature of the supplier's task moderates the relationship. Finally, our data support our hypotheses related to the positive relationship between relationship‐specific absorptive capacity and new product advantage, and the proposed negative moderation of supplier technical capabilities on this relationship. Based upon these findings, we encourage managers to recognize that strategic suppliers' with greater technical capabilities perform better regardless of the degree of creativity required by their task; but that strategic suppliers with lower technical capabilities may partially compensate (substitute) for their lack of technical capabilities, if they are able to respond to high problem‐solving task requirements. Furthermore, we suggest that the firm's development of relationship‐specific absorptive capacity is much more important when a strategic supplier is less technically capable. A buying firm's relationship‐specific absorptive capacity can, according to our data, substitute for low supplier technical capabilities. On the other hand, where the supplier has strong technical capabilities, investments in relationship‐specific absorptive capacity have no effect on new product advantage. Our findings reinforce recent calls for research on how firms can combine different resources and capabilities to achieve superior performance.

Improving Supplier New Product Development Performance: The Role of Supplier Development

“…The present study is part of a broader research effort to investigate supplier involvement in NPD. Other papers drawing on this data set include Lawson and Potter (2012), Potter and Lawson (2013) and Lawson, Tyler, and Potter (2014). Using a database on R&D-intensive firms maintained by the UK Department of Trade & Industry, we survey 1700 medium-to-large manufacturing firms.…”

Supplier involvement in eco-innovation: The co-development of electric, hybrid and fuel cell technologies within the Japanese automotive industry

“…In parallel with this trend, research from the supply chain management literature has found that involving suppliers in the innovation process can enhance the potential for positive outcomes to emerge from inter-organizational NPD projects (Liker and Choi, 2004;Aoki and Lennerfors, 2013). Supplier involvement in NPD enables firms to access supplier resources and innovation capabilities in a way that is conducive to the implementation of eco-innovation (Lawson et al, 2015). In particular, studies have found that Toyota frequently uses early supplier involvement to integrate its suppliers into the fuzzy front end of the NPD process (Dyer and Nobeoka, 2000;Aoki and Lennerfors, 2013).…”

Formalized Problem‐Solving Practices and the Effects of Collaboration with Suppliers on a Firm's Product Innovation Performance

“…The analysis focuses on collaborations with suppliers as an example of interorganizational collaboration. Suppliers are a potential and easily accessible source of solutions to specific problems linked to new product development rather than being a source of generic new ideas and technological options, which may instead have long lags to market (Lawson, Tyler, and Potter, ; Un et al, ; Van Echtelt, Wynstra, Van Weele, and Duysters, ). The growing importance of suppliers as partners in the innovation process is exemplified by a quote from Biswairan Sen, Vice President of Procurement at Unilever, who stated that from 2012 and 2014, “[…] about 70% of our innovations have been contributions from our suppliers” (Degun, ).…”