Influences of supplier capabilities and collaboration in new car development on competitive advantage of carmakers

Abstract

Purpose

This study aims to investigate relationships among supplier capabilities, collaboration in new car development, and the competitive advantage of carmakers based on the resource‐based view (RBV).

Design/methodology/approach

A survey of first‐tier suppliers in the Korean automotive parts industry was conducted, and pertinent hypotheses were tested by using the ordinary least squares (OLS) method and hierarchical multiple regression analysis (HMRA).

Findings

It was found that suppliers' flexibility, engineering and modularization capabilities positively influence collaboration in new car development, which in turn positively affects the competitive advantage of carmakers. This result empirically verifies the RBV proposition that one motive for interfirm collaboration can be the opportunity to gain access to other firms' resources/capabilities. The theory of the RBV was further extended by demonstrating that suppliers' quality improvement and modularization capabilities directly contribute to the competitive advantage of carmakers and that the influence of quality improvement and modularization capabilities on this competitive advantage are robust against technological uncertainty. However, the positive effect of collaboration in new car development on the competitive advantage of carmakers is decreased by the moderating effect of technological uncertainty.

Research limitations/implications

The findings of this study were obtained from a limited population of the Korean automotive industry. This study not only empirically verified the proposition of the RBV but also extended the RBV theory by empirically demonstrating direct relationships between suppliers' capabilities and carmakers' competitive advantages.

Practical implications

Suppliers must enhance flexibility, modularization and engineering capabilities in order to vitalize collaboration with carmakers in new car development. As technological uncertainty increases, carmakers should address in‐house the problems caused by technological uncertainty or delegate related jobs only to suppliers with significant capabilities for quality improvement and modularization.

Originality/value

This is one of the few studies to identify the moderating effect of technological uncertainty on interfirm collaboration.

Citation

Oh, J. and Rhee, S. (2010), "Influences of supplier capabilities and collaboration in new car development on competitive advantage of carmakers", Management Decision, Vol. 48 No. 5, pp. 756-774. https://doi.org/10.1108/00251741011043911