Specialized Supplier Networks as a Source of Competitive Advantage: Evidence from the Auto Industry

Keywords

suppliers, networks, asset specificity, competitive advantage

Abstract

This study examines the relationship between interfirm asset specificity and performance in the auto industry. More specifically, I examine the extent to which differences in supplier-automaker asset specialization may explain performance differences between Japanese automakers (Nissan and Toyota) and US. automakers (Chrysler, Ford, General Motors). The findings indicate a positive relationship between supplier-automaker specialization and performance. In particular, the data suggest a positive relationship between interfirm human asset co-specialization and both quality and new model cycle time. Moreover, site specialization is found to be positively associated with lower inventory costs. The findings suggest that in the auto industry a tightly integrated production network characterized by proximity and a high level of human co-specialization will outperform a loosely integrated production network characterized by low levels of interfirm specialization.

Original Publication Citation

Dyer, Jeffrey H. (1996). "Specialized Supplier Networks as a Source of Competitive Advantage: Evidence from the Auto Industry," Strategic Management Journal, Vol. 17, Issue 4, 271-292.

Document Type

Peer-Reviewed Article

Publication Date

1994

Publisher

Strategic Management Journal

Language

English

College

Marriott School of Business

Department

Marketing

University Standing at Time of Publication

Full Professor

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