Strategic suppliers' technical contributions to new product advantage: substitution and configuration options

Lawson, Benn
Tyler, BB
Potter, A
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Tyler, BB
Potter, A
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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 inter-organizational 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.