KNOWLEDGE DEVELOPMENT CAPACITY PRODUCT DEVELOPMENT CAPABILITY AS ANTECEDENTS OF EMBEDDEDNESS WITH SUPPLIER IN NPD

Nowadays, many firms have increasingly relied on supplier support to enhance product innovativeness and performance while focusing on their own core competencies. Literature has covered different means to achieve improved supplier collaboration through supplier involvement, embeddedness, and integration. However, the antecedents of embeddedness with supplier (ES) in new product development (NPD), especially in terms of knowledge development capability (KDC) and new product development capability (NPDC), have yet to be further investigated.This project conducts an empirical study on the relationship between supplier KDC and supplier selection based on their NPDC as an antecedent for supplier integration in NPD. Through an empirical survey using over 210 enterprises in the Pearl River Delta of Southern China, the results of structural equation modelling (SEM) showed that firms develop their distinguished competence through proper integration with suppliers with strong KDC and NPDC could better enhance their competitive advantage. The traditional supplier selection by cost, quality, and delivery (CQD) is inadequate in the present global market. This study finds that, aside from the CQD approach, supplier KDC and NPDC, are crucial to the success of NPD confirmed in this study as crucial antecedents for embeddedness with supplier in NPD.