Low power, high ambitions: New ventures developing their first supply chains

Øyvind Bjørgum,Lise Aaboen,Anna Fredriksson

doi:10.1016/j.pursup.2020.100670

Abstract

This paper investigates sourcing decisions for new ventures. Sourcing decisions are especially problematic for start-ups because they lack resources, knowledge and legitimacy to evaluate and interact with suppliers. We develop and apply a framework that connects global sourcing, relationship development and attractiveness. Further, we investigate how new ventures develop their first supply chains by conducting an exploratory multiple case study of six Norwegian start-ups. Based on our findings, we develop three propositions regarding how start-ups mediate their lack of attractiveness through pre-sales and by choosing shorter supply chains and smaller suppliers. The implications for practice include emphasizing the importance of developing a business relationship with the supplier in parallel with making sourcing decisions. This study is a novel contribution to an underexplored topic, and we conclude by proposing a research agenda for future explorations of start-ups and supply chain development.

Highlights

New ventures are increasingly developing and commercializing novel manufactured products (Mollick, 2014). This growth is the result of several global trends that have increased the availability of new technologies and services for start-ups developing physical products – referred to as hardware start-ups (DiResta et al, 2015)
We have investigated how new ventures develop their first supply chains using a multiple case study of six Norwegian hardware start-ups and a framework that connects global sourcing, relationship develop ment and attractiveness
Our findings show some central challenges that start-ups face and indicate potential strategies to overcome these

Summary

Introduction

New ventures are increasingly developing and commercializing novel manufactured products (Mollick, 2014). This growth is the result of several global trends that have increased the availability of new technologies and services for start-ups developing physical products – referred to as hardware start-ups (DiResta et al, 2015). The supply chain is developed in parallel with the first product and the start-up itself. This implies, for instance, that mobilizing the suppliers’ technological and managerial capabilities has become more important than cost-efficiency concerns (La Rocca and Snehota, 2020)

Methods

Findings

Discussion

Conclusion