Strategy from the perspective of contract manufacturers

Abstract

Purpose The purpose of this paper is to investigate the strategy of contract manufacturers (CMs). The research question is the following: how can the strategy of CMs be explained? The purpose is to better understand this activity though using different theoretical approaches and analyzing two customer relationships of a Hungarian CM, Videoton Holding. Design/methodology/approach The primary theoretical background is the relational view of strategy, and the concept of the business model is used for the analysis. The authors confront the literature about this topic in strategic management using the industrial marketing and purchasing approach to strategy; namely, strategizing. Through the case study of Videoton the authors explore how the company became a highly developed CM from its origins as an original equipment manufacturer company. Findings Through comparing theory the authors have created a research framework which is adapted to the empirical findings. In the CM’s strategy it is crucial to understand how partners are able to synchronize key propositions, key resources and key actors while taking the network of the firms into consideration. Originality/value The paper is novel in that the authors investigate the strategy of a supplier from their own perspective, not that of a customer. Applying and contrasting different theoretical approaches to this particular topic may considered to be valuable as well.