This research examines whether the strategic selection of suppliers based
on supplier new product development capability, supplier quality capability
and supplier cost capability directly and/or indirectly enhances the
buyer’s competitive performance capabilities in the matched domains of
buyer product innovation, buyer quality and buyer competitive pricing,
respectively. The resource-based view of the firm is used to frame the
direct effects of strategic supplier selection as the capability of a buyer to
select a supplier with resources and expertise in a specified domain
should enhance the buyer’s performance capability in the matched
domain (but not necessarily buyer performance in unmatched domains).
Two supplier integration mechanisms—supplier partnerships and
supplier development—are modeled as potential mediators, implying
indirect paths. The research hypotheses focus on both direct and indirect
effects for each of the matched domains, but do not posit relationships
across different domains. For example, supplier selection for new product
development capability should impact buyer product innovation (matched
domains), but should not necessarily impact buyer quality capability
(unmatched domains). The direct effects of strategic supplier selection on
buyer performance are supported in each matched domain; however, the
indirect effects through supplier integration are not significant for the
matched domains. The results identify strategic supplier selection as a
promising source of competitive advantage in the resource-based view
sense. In contrast, supplier development and supplier partnership do not
provide performance benefits in a given domain above those arising from
strategic supplier selection in the same domain; i.e., it is the nature of the
resources selected that is key to competitive advantage.