OEM supplier impact on buyer competence development

Abstract

Purpose – The purpose of this paper is to examine whether original equipment manufacturing (OEM) suppliers can affect the development of buyer competence by manipulating two environmental factors: the development of competence in OEM supplier's external business relationships and the competitive pressure of the OEM supplier environment. Design/methodology/approach – The sample population consisted of 1,000 OEM suppliers in the Taiwanese information technology (IT) industry. Partial least squares analysis was used to examine the causal relationships among the variables. Findings – The empirical results revealed that the pressure of the external environment pushes OEM suppliers to develop competence through external business relationships. This competence in turn affects the development of buyer competence. Furthermore, OEM supplier impact on buyer competence development is positively associated with the importance of OEM supplier in outsourcing relationship. Originality/value – The paper empirically examines whether the impacts of the OEM supplier derived from different sourced environments play distinct roles in the development of the OEM supplier's power.

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“…The firm produces machine tools for end-users and a significant part of its business is as an original equipment manufacturer (OEM). OEMs are companies which make the definitive and authentic products for a particular brand (Feng, 2014). The company sells its products and provides after sales services, such as product repair and maintenance, to a range of customers located in overseas markets, including China.…”