New Insight into the Competitiveness of Supplier Firms: Aligning Competences and Customer Expectations

Abstract

The focal issue of the paper is firm competitiveness and the way in which operations can contribute to it. The problem of firm competitiveness has been extensively researched in operations strategy, mainly using the concept of strategic fit, but there has been little discussion in the literature of the criteria that should be used to guide the selection of strategic capabilities to be acquired. We argue that this selection should be guided by the expectations of external stakeholders with special emphasis on customers′ expectations. We develop and test a theoretical model of expectations-based operational competitiveness, building on the concepts and terms developed by two important management approaches, the theory of customer value and the capability-based theory of the firm. To test the model, statistical analysis is carried out using the database of the research programme “In global competition - competitiveness of the Hungarian enterprise sector” at the Competitiveness Research Centre of Corvinus University of Budapest. The model developed is a useful instrument for gaining a deeper insight into firm competitiveness. We define three kinds of operational competences: production, adaptation and supply chain management competence. Our empirical analysis reveals that Hungarian companies in the manufacturing industry possess a well-developed capability base as far as production competence is concerned. However, they usually cannot effectively internalise adaptation and supply chain management competences and cannot utilise them as sources of improved operational performance.