How do subcontractors evolve?

Abstract

Purpose

The purpose of this study is to investigate how small and medium sized subcontracting firms evolve.

Design/methodology/approach

A cluster analysis was applied to a sample of 417 North East Italian subcontractors to explore if (and to what extent) Italian subcontractors differ and can be classified on the basis of their design and marketing capabilities. Using this classification as a starting point, multiple case study analysis is conducted on a sample of ten subcontractors and a model developed of how subcontractors' capabilities evolve over time.

Findings

Four profiles of subcontractors are identified as a function of their design and marketing capabilities: developed, developing, question mark and traditional. A model is proposed to understand and predict subcontractors' evolution. In the model knowledge codification, supply management, design and marketing capabilities mutually reinforce one another and tend to align over time.

Research limitations/implications

Firstly, future research should articulate the four clusters identified. Secondly, the framework for subcontractors' evolution should be tested on large‐scale databases. Thirdly, more accurate measures of subcontractors' capabilities should be conceived and tested.

Practical implications

Results of this study are critical for industrial buyers who need to segment their subcontractors and understand how their marketing and design capabilities evolve. Moreover, they are also critical for subcontractors' managers who wish to avoid cost‐based strategies, enlarge their customer base, broaden their international scope and engage in durable relationships with their customers.

Originality/value

This study proposes an original model of subcontractors' classification and evolution and suggests good practices to design and manage supply networks.

Citation

Furlan, A., Grandinetti, R. and Camuffo, A. (2007), "How do subcontractors evolve?", International Journal of Operations & Production Management, Vol. 27 No. 1, pp. 69-89. https://doi.org/10.1108/01443570710714547