A firm’s supply management function can create strategic advantages if it possesses the capabilities to
(a) foster close working relationships with a limited number of suppliers; (b) promote open
communication among supply-chain partners; and (c) develop long-term strategic relationship
orientation to achieve mutual gains.” (Chen et al, 2004)
Cousins et al. (2008) conclude that are three concepts central to strategic SCM:
1) it affects the scale and scope of an organization’s activities over the long term,
2) it is about being responsive to changes in the external environment,
3) it is about aligning activities with strategic resources and capabilities.
Competitive advantages are extremely difficult to achieve since focal company’s partner are in a shared
network even with competitors. The company should integrate the element of competition into its
strategy planning.
Ways to damage the opponents SC ( Bell et al 2015):
1) Delay supply, including the delaying of rivals’ market entry, or creation of temporary shortages of
scarce and valuable suppliers needed by rival
2)Divert the competition’s supply to an alternative purpose or location, causing it to cede competitive
ground in a target market
3) Disrupt the competition’s SC by buying up needed capacity or material.
4)Destroy competitor SC network capabilities by permanently acquiring key network nodes, or rendering
its current resource network obsolete or useless.
Competitive dynamics: Engaging in competitive actions can improve a company’s relative market
position in relation to its competitors and result in higher overall firm-performance.
Competitor SCM strategies:
1)focal firm- customers: well described in literature. competitive actions •Pricing• Marketing• Product
improvements •New products •Market expansions
2)focal firm- suppliers: missing from literature. competitive actions •Create lock-in situations •Supplier
development programs (Esqel) •Shared innovation programs (Esqel’s new harvesting techniques)
•Contracting •Preferred customer programs (Starbucks CAFÉ premium prices)
A competitive action in a supply market can be seen as an externally directed, specific, and observable
competitive move initiated by a firm to enhance its relative competitive position in that supply market.
The Red Queen Effect: is an hypothesis which proposes that firms must constantly adapt, evolve, and
proliferate to survive while pitted against ever-evolving opposing firms in an ever-changing environment.
Ultimately, in order to have a competitive advantage firms must run twice as fast than just surviving.
In order to react to changes a firm should have: 1) awareness, 2) motivation and 3) capabilities.
Propositions ( Pulles & Ellegaard)
1) Firms that engage in competitive actions in their supply market in time t, will show higher levels of
firm performance in time t+1 than rival firms that will not engage in competitive actions in time t.
2) The effect of a focal firm’s competitive actions in its supply market, will depend greatly on the time
the rival firms need to react to these actions.
3) Competitive actions of the focal firm in a supply market where rival firms are aware, motivated and
capable of responding to these actions, have a greater likelihood of inflicting competitive responses of
the rival firms.
4) Competitive actions of the focal firm in a supply markets where rival firms are not aware and capable
of responding to these actions, will be more successful compared to competitive actions in a supply
market where rival firms are aware, motivated and capable of responding
(a) foster close working relationships with a limited number of suppliers; (b) promote open
communication among supply-chain partners; and (c) develop long-term strategic relationship
orientation to achieve mutual gains.” (Chen et al, 2004)
Cousins et al. (2008) conclude that are three concepts central to strategic SCM:
1) it affects the scale and scope of an organization’s activities over the long term,
2) it is about being responsive to changes in the external environment,
3) it is about aligning activities with strategic resources and capabilities.
Competitive advantages are extremely difficult to achieve since focal company’s partner are in a shared
network even with competitors. The company should integrate the element of competition into its
strategy planning.
Ways to damage the opponents SC ( Bell et al 2015):
1) Delay supply, including the delaying of rivals’ market entry, or creation of temporary shortages of
scarce and valuable suppliers needed by rival
2)Divert the competition’s supply to an alternative purpose or location, causing it to cede competitive
ground in a target market
3) Disrupt the competition’s SC by buying up needed capacity or material.
4)Destroy competitor SC network capabilities by permanently acquiring key network nodes, or rendering
its current resource network obsolete or useless.
Competitive dynamics: Engaging in competitive actions can improve a company’s relative market
position in relation to its competitors and result in higher overall firm-performance.
Competitor SCM strategies:
1)focal firm- customers: well described in literature. competitive actions •Pricing• Marketing• Product
improvements •New products •Market expansions
2)focal firm- suppliers: missing from literature. competitive actions •Create lock-in situations •Supplier
development programs (Esqel) •Shared innovation programs (Esqel’s new harvesting techniques)
•Contracting •Preferred customer programs (Starbucks CAFÉ premium prices)
A competitive action in a supply market can be seen as an externally directed, specific, and observable
competitive move initiated by a firm to enhance its relative competitive position in that supply market.
The Red Queen Effect: is an hypothesis which proposes that firms must constantly adapt, evolve, and
proliferate to survive while pitted against ever-evolving opposing firms in an ever-changing environment.
Ultimately, in order to have a competitive advantage firms must run twice as fast than just surviving.
In order to react to changes a firm should have: 1) awareness, 2) motivation and 3) capabilities.
Propositions ( Pulles & Ellegaard)
1) Firms that engage in competitive actions in their supply market in time t, will show higher levels of
firm performance in time t+1 than rival firms that will not engage in competitive actions in time t.
2) The effect of a focal firm’s competitive actions in its supply market, will depend greatly on the time
the rival firms need to react to these actions.
3) Competitive actions of the focal firm in a supply market where rival firms are aware, motivated and
capable of responding to these actions, have a greater likelihood of inflicting competitive responses of
the rival firms.
4) Competitive actions of the focal firm in a supply markets where rival firms are not aware and capable
of responding to these actions, will be more successful compared to competitive actions in a supply
market where rival firms are aware, motivated and capable of responding
