The impact of supplier development on buyer competitive advantage: A path analytic model

Abstract

As manufacturing firms increasingly realize that supplier performance is crucial to their establishing and maintaining competitive advantage, supplier development has been a subject of considerable research in supply chain management. We develop and test a path model to explore how supplier development practices affect buyer–supplier performance from the buying firm's perspective in the context of Hong Kong's electronics industry. The results show that top management, supplier evaluation, and supplier strategic objectives are significant determinants of transaction-specific supplier development, and that buyers that have closer collaborative relationships with suppliers may strengthen their competitive advantage.