Partnership strength and diversity with suppliers

Abstract

PurposeThe purpose of this study is to better understand the effects of independent restaurant partnerships upon product innovation associated with performance by investigating differences in business situations between startup and established independent restaurant sectors.Design/methodology/approachPartnership strength and diversity were assessed to identify their influence on restaurant product innovation and performance using a structural equation model to test the study’s hypotheses. A multi-group analysis was used to examine the moderating roles of business life cycle on the relationships between partnership strength and diversity and product innovation.FindingsResults found that product innovation implementation requires strong and diverse partnerships with suppliers to improve independent restaurant performance. Diverse partnerships have a more positive effect upon product innovation than do strong partnerships. The positive effect partnership strength with suppliers had upon product innovation was significantly greater for startup restaurants, while its positive effect of diversity was greater for established restaurants.Practical implicationsFindings can be used to establish effective strategic partnerships with independent restaurant suppliers and to manage them more effectively in consideration of their business characteristics being startup or established operations.Originality/valueThis study was an initial attempt to empirically prove significant roles of partnership strength and diversity applied to the context of independent restaurant product innovation. Findings regarding different effects of partnership strength and diversity contributed to the existing body of knowledge about strategic partnerships with suppliers.