EXPLORING THE GROWTH STRATEGY OF CONTRACT ELECTRONICS MANUFACTURERS IN TAIWAN: A COMPETENCE-BASED PERSPECTIVE

Abstract

Employing the notion of balanced growth postulated by competence-based literature, the present study submits that a firm’s growth strategy can be understood as its ability to manage the interplay of building and leveraging existing competence within the business context. The synergistic effects resulting from the creation of a self-reinforcing cycle of competence building and leveraging initiatives then drive the achievement of superior performance. To examine the validity and usefulness of this conception, we conduct a systematic investigation on the strategy-performance link of contract electronics manufacturers based in Taiwan, who have emerged as the competitive global supply base in electronics and computer industries. Empirical results based on a panel of business-level operating data show that while building product-related competence is essential to the contract manufacturer’s achievement of higher profitability, leveraging competence between subcontracting services and own-brand business will significantly enhance both profitability and sale growth. The implications of formulating a sustainable growth strategy for contract manufacturers in the context of horizontally configured industries, and suggestions for future research endeavors on competence-based management are discussed.

Citation

Lee, J.-R., Chen, J.-S. and Tang, M.-J. (2005), "EXPLORING THE GROWTH STRATEGY OF CONTRACT ELECTRONICS MANUFACTURERS IN TAIWAN: A COMPETENCE-BASED PERSPECTIVE", Sanchez, R. and Heene, A. (Ed.) Competence Perspective on Managing Internal Process (Advances in Applied Business Strategy, Vol. 7), Emerald Group Publishing Limited, Leeds, pp. 203-227. https://doi.org/10.1016/S0749-6826(04)07010-6