A resource-based theory of supplier strategy

This article explores resource-based strategies for suppliers of manufactured components and parts for attaining mutually beneficial, sustainable relationships with their customers (i.e., downstream assemblers) and remaining competitive in a dynamic, often hostile environment. Central to our conceptualisation is a two-dimensional framework constructed by supplier capability levels (low, medium, and high) and customer outsourcing needs (market, relational, and partnership). A match between supplier capability levels and customer outsourcing needs is posited to be the key to a sustainable relationship between suppliers and their customers. Attaining this match may often require suppliers to either upgrade or acquire new capabilities. The resources, efforts, and strategies needed toward this end are evaluated.