WHAT_DRIVES_THE_CHOICE.docx

Supplier selection is also based on the perceived

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Supplier selection is also based on the perceived value 98 Volume 47, Number 2 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
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Journal of Supply Chain Management What Drives the Choice of a Third-Party Logistics Provider? created by outsourcing and the inherent desire among buyers to maximize the benefits that they derive from establishing outside supplier relationships (Terpend et al. 2008). An alternative set of theories drawn from the resource-based view (RBV) of the firm, examines how firms seek to build embedded capabilities and knowl edge for addressing complex, practical and repeated problems ( Madhok 2002; Mcivor 2005). In line with this thinking, there is strong empirical support for the prop osition that the decision to outsource is heavily influ enced by organizational capability considerations (Hoetker 2005; Jacobides and Winter 2005) and the creation of new value (Terpend et al. 2008). From a lo gistics service provider's perspective, this suggests that contracts will be won by presenting to potential cus tomers unique capabilities and embedded knowledge that are not on offer by their competitors. Recent work on the resource-advantage (R-A) theory of competition suggests that the TCE and RBV focus on long-term equilibrium is too broad to be an effective basis for strategic SCM research (Hunt and Davis 2008). They argue that SCM scholars need to pay greater atten tion to heterogeneity and the effective matching of spe cific supplier capabilities with the needs of particular market segments in
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