Challenges in gaining supply chain competitiveness : Supplier response strategies and determinants

This study aimed to explore suppliers’ response strategies to their biggest challenge when they are dealing with brand name manufacturers and uncover the driving forces underlying such strategies. Based on face-to-face interviews with 1075 electronic component suppliers in China, we identified suppliers’ biggest challenges and classified their response strategies into these categories: strategic marketing, operations and human resources, and economic. Drawing from the resource-based view of the firm, interorganizational relationship theory, and transaction cost economics, coupled with the results from our in-depth interviews, we argue that the type of supplier response strategies depends on the type of challenge faced as well as various transaction and customer characteristics. Our empirical study demonstrated that these driving forces significantly affect suppliers’ strategic responses in different ways. Our study contributes to the literature on brand management in the B2B setting, by investigating how suppliers effectively tackle their biggest challenges from brand name manufacturers to gain competitive advantages.