Does Product Platform Strategy Mediate the Effects of Supply Chain Integration on Performance? A Dynamic Capabilities Perspective

Abstract

This study depicts supply chain integration (SCI) for new product development (NPD) as a dynamic capability and explores its relationship with a product platform strategy (PPS), NPD performance, and overall firm performance. Supplier, internal, and customer integration are modeled as antecedents to PPS, while product innovation and relative profitability are modeled as direct and/or indirect consequences. The model examines whether a PPS mediates the effects of SCI on performance. An analysis of 214 US manufacturers revealed that supplier integration and internal integration are positively related to PPS, and that their effects on product innovation and profitability are fully mediated by PPS. In contrast, customer integration had no effect on PPS and thus no indirect effect on performance measures. The research showed that PPS both directly and indirectly (though product innovation) affects profitability. The findings suggest the value of aligning the domains of integration and performance and considering the domain strategy when examining the effects of SCI on performance.