Examining the Competitive Capabilities of Manufacturing Firms

Abstract

Abstract Manufacturers compete in a complex and uncertain environment with growing global competition, changing and emerging markets, and increasing levels of manufacturing technology. Order winning hinges on their ability to achieve a set of competitive capabilities that have an external, customer orientation and manifest the relative strength of the individual firm against its competitors. This study proposes a framework for research on competitive capabilities, reports on the development of a set of constructs for measuring those capabilities, and tests relations among them. The constructs measure flexible product innovation, quality, delivery dependability, competitive price, and premium price. The constructs are reliable across industries. Tests of a structural model suggest significant relations among the competitive capabilities and significant, positive, and direct-indirect relations between the competitive capabilities and profitability. Results are based on a sample of 244 firms across 4 industries.