Contribution of supply chain to corporate strategy: a case study in agriculture machinery industry

Abstract

The strategy-developing unit of analysis has shifted from industry (industry structure view) to firm’s unique characteristics (resource-based view) to dyad routine and processes (relational view) to the current network relationships (strategic network) view. As a result, the supply chains, due to their cross-functional and cross-organisational nature, are getting promoted from being merely operational and tactical concerns to more strategic ones and therefore becoming a major stakeholder in corporate strategy. This change is significant particularly in industries that are classified as low clock-speed and complex product industries. In this article, a conceptual framework for investigating the contribution of supply chain management to corporate strategy is developed and applied in agriculture machinery industry. The results indicate that supply chain contribution to the corporate strategy is significant in multi-business firms that are characterised by low clock-speed industry, high reciprocal interdependence between OEM and immediate suppliers, related diversification strategy, focus on economy of scale advantage, and that are looking for synergies such as vertical integration, centralised procurement, asset improvement and centralised inbound and outbound logistics.