Role of Intels suppliers in Innovation Ecosystem

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Which roles can be identified for Intel's suppliers within its innovation ecosystem and how do these roles affect Intel's competitive position?

1.2 Research Questions

1) Which suppliers can be identified within Intel's innovation ecosystem?

2) Which roles can be attached to Intel's suppliers within its innovation ecosystem?

3) How do the roles of the identified suppliers affect Intel's competitive position?

1.3 Academic Articles

In order to properly describe all variables that are part of the problem statement five academic papers are found in addition to the article of Adner & Kapoor (2010). Each of these five articles will have resemblance with one or several definitions that are part of the problem statement. Moreover, the articles will be used to define the theoretical background (Part 2) as well as the problem statement and research questions (deductive).

1) Adner, R. (2006). Match your innovation strategy to your innovation ecosystem. Harvard Business Review, 2006, 84(4), 98-107.

Article 1: Was found by use of looking at the reference list of the starting paper of Adner & Kapoor (2010). Following, I searched for this article in the UvT library database [1] (using "Simultaneous search in multiple databases") by the title of the paper. The search engine returned that the article could not be found digitally (online), but at location T 0022 ECO in the UvT library. The journal has an impact factor of 1.793 and the article is cited 14 times according to ISI Web of Knowledge [2] (Journal Citation Report and Cited Reference Search).

2) Afuah, A. (2000). How much do your co-opetitors' capabilities matter in the face of technological change? Strategic Management Journal, 2000, Vol. 21, 387-404.

Article 2: Was also found by looking at the reference list of the article of Ander & Kapoor (2010). Following, I searched for this article on the Wiley Interscience website [3] , as I knew all articles from the Journal of Strategic Management could be found at their website. On Wiley Interscience I selected the field of interest (Business) and selected the Journal of Strategic Management to search in. Moreover, I searched on the title of the paper and found a digital PDF copy of it. The journal has an impact factor of 3.344 (4th) and the article is cited 55 times according to ISI Web of Knowledge.

3) Barney, J.B. (1995). Looking inside for competitive advantage. Academy of Management Executive, 1995, Vol. 9, No. 4, 49-61.

Article 3: I needed to describe the definition of competitive advantage as it was present in the problem statement. I knew from previous courses Barney had written a very good article on this topic, so I searched on JSTOR [4] and ABI/INFORM [5] for articles of Barney in order to find a digital copy of the paper. I succeeded in this by saving a digital PDF copy of the article from JSTOR. The journal has an impact factor of 1.118 and the article is cited 173 times according to ISI Web of Knowledge.

4) Dyer, J.H. (1996). Specialized supplier networks as a source of competitive advantage: Evidence from the auto industry. Strategic Management Journal, 1996, Vol. 17, 271-291.

Article 4: Was found in a similar way as Article 1 and 2, as described above. The paper originated from the Journal of Strategic Management, so I searched for it on Wiley Interscience and found a digital PDF copy. Cited 2 times and the Strategic Management Journal has an impact factor of 3.344, which ranks 4th within the subject of management according to ISI Web of Knowledge.

5) Hoskisson, R.E., Hitt, M.A., Wan, W.P., Yiu, D. (1999). Theory and research in strategic management: Swings of the pendulum. Journal of Management, 1999, Vol. 25, No. 3, 417-456.

Article 5: I already knew this article from the interactive classes of Research Methods in Strategy and it proved to be quite informative with regard to the field of strategic management. Therefore, I selected this specific paper, which was saved on my computer as a digital PDF file. Cited 94 times according to ISI Web of Knowledge and the Journal of Management has an impact factor of 3.080, which ranks 5th within the subject of management.

Overall the quality of the selected papers could be considered satisfactory, as most of them originate from high quality sources and journals with subsequent high impact factors. Moreover, most selected articles were cited a respectable number of times by other authors, which is also an indication and recognition of the quality of work based on authority/reputation (Saunders et al., 2009).

2. Theoretical Background

According to Adner & Kapoor (2010) competitive advantage of a firm depends on its ability to create more value than its direct competitors. Moreover, they suggest that a firm that is able to innovate successfully can create value, however that an innovation does not stand alone. It depends on corresponding changes in the organization's environment (Adner & Kapoor, 2010), which requires innovation of other parties within its ecosystem (Adner, 2006). The ecosystem approach focuses on the understanding of the coordination between partners in exchange networks that are characterized by concurrent cooperation and competition (Figure 1).

Supplier 1

Supplier 2

Focal Firm

Complementor 1

Complementor 2



ComplementsFigure 1 - A Generic Ecosystem Schema

Source: Adner & Kapoor (2010)

The outputs of upstream suppliers serve as inputs for the focal firm in the ecosystem and are bundled by the focal firm into bundled (end) products. The inputs of the suppliers are called components. Following the focal actor's product serves as an input for the customer, which subsequently may need a bundle of offers in order to fully utilize the input of the focal firm. These downstream bundled offers are referred to as complements (Adner & Kapoor, 2010). By now it may have become clear that identifying your innovative ecosystem and determining all actors plays a crucial role within the creation of value and making successful innovation possible. For this reason, Adner (2006) proposes seven steps for (focal) firms to map their innovation ecosystem in order to reveal potential delays in getting the innovation to the market (Table 1, p.5).

Table 1 - Steps for Mapping the Innovation Ecosystem

1) Identify all the actors that must adopt your innovation before it reaches the end consumer.

2) Identify all the complements (other innovations needed for your innovation) required for you and each of your actors to move the offer forward to the end consumer.

3) Estimate the delays caused by your interdependence with your own complementors (those adding to your innovation with their own innovations).

4) Estimate the delays caused by the adoption process and by the time it takes each actor to integrate your solution into its decisions, design cycle, products, and e.g. processing time.

5) Estimate the delays caused by the actors' interdependence with their own complementors and the integration hurdles these actors face in terms of adoption and processing delays.

6) On the basis of those estimates, arrive at a time-to-market for your innovation.

7) Now that you've identified these delays (the interdependence and integration risks), reassess your initial performance expectations and innovation strategy.

Source: Adner (2006)

As this research will primarily focus on the component side of the innovation ecosystem, the supplying actors within the value chain will the main interest within this study. As mentioned before, firms are dependent on both suppliers and complementors within their innovation ecosystem with regard to firm performance and competitive advantage. This is supported by Afuah (2006), which states that a firm's competitive advantage is partially dependent on inimitable collaborative relationships with and the success of its co-opetitors [6] . Furthermore, Afuah (2006) states that suppliers are critical sources of innovation and that they are are suppliers of critical resources that are essential within the bundled product of the focal firm. Focal firms often heavily rely on suppliers in order to fulfil the demand of the customer, therefore tight links between suppliers (and focal firms) are critical for success. Supporting this, Dyer (1996) states that long-term partnerships between buyer (focal firm) and physically proximate suppliers and increase firm performance. Additionally, Dyer (1996) shows that investments in specialized assets has a positive influence on value creation and firm performance. Those specialized assets are in terms of Barney (1995) VRIO framework valuable, rare and costly to imitate (inimitable). Consequently, those assets are hard to acquire for the focal firm, but also hard to sell to anyone else than the focal firm by the supplier. Therefore, buyer and supplier become interdependent, which diminished or even ceases opportunistic behaviour from both parties. At last, according to Dyer (1996), transactors within the value chain can develop a sustainable competitive advantage through cooperative specialization.

However, developing a sustainable competitive advantage according to the resource-based view (RBV) (Barney, 1995) occurs when firms acquire or develop an attribute or combination of attributes (capabilities/product bundle or core competencies) that allows it to outperform its competitors. These internal attributes - strengths and weaknesses - as sources of competitive advantage are referred to as resources and capabilities. These include financial, physical, human and organizational assets used by a firm to develop, manufacture and deliver products or services to its customers (Barney, 1995). In order to gain a (sustainable) competitive advantage those resources and/or capabilities have to be VRIO (Table 2).

Table 2 - VRIO Framework


A resource or capability is only valuable if its adds value by enabling it to exploit opportunities and/or neutralize threats. When valuable competitive parity.


How many competitors already possess the valuable resource or capability? When valuable and rare: (temporary) competitive advantage.


Is the resource or capability costly to imitate? This depends on three factors:

1) Importance of history

2) Importance of numerous "small decisions"

3) Importance of socially complex resources

When a resource is valuable, rare and costly to imitate: (temporary) competitive advantage.


Is the firm organized in a way that it can fully exploit the competitive advantage of its resource or capability? This depends on complementary resources.

When a resource is valuable, rare, costly to imitate and fully exploited by the organization: sustainable competitive advantage

Source: Barney (1995)

The RBV analyzes a firm's internal strengths and weaknesses, nevertheless does not pay attention to a firm's external environment with its subsequent opportunities and threats. On the latter industrial economics (IO) focuses, with its external approach that uses the industry or competing groups of firms as their primary unit of analysis (Hoskisson, Hitt, Wan and Yiu, 1999). IO follows a model based on the structure-conduct-performance (SCP) paradigm. This paradigm holds that performance and conduct (strategy) follows industry structure. In other words, a firm's performance is primarily a function of the industry environment in which it operates and competes (Hoskisson et al., 1999). As cited by Hoskisson et al. (1999) Porter (1980) specified the various aspects of an industry structure in its Five Forces Model (Figure 2), provides a useful analytic tool to assess an industry's attractiveness.

Figure 2 - Porter's Five Forces Model

Bargaining Power of Suppliers

Bargaining Power of Customers

Threat of

New Entrants

Threat of Substitute Products

Industry Rivalry

Source: Porter (1980), as cited in Hoskisson et al. (1999)

As mentioned before, Adner & Kapoor (2010) suggested that a firm can create value by innovation, however that an innovation does not stand alone. It depends on corresponding changes in the organization's (external) environment as well as its internal resources and capabilities (Adner & Kapoor, 2010). This suggests that firms that analyse their competitive position within their innovation ecosystem should consider both, the RBV approach as well as the IO model, in determining how to compete and how to achieve a (sustainable) competitive advantage with respect to their innovation ecosystem.

3. Methodological Framework / Research Strategy

3.1 Purpose of the Research

The purpose of this study will be descriptive, which objective is to "to portray an accurate profile of persons, events or situations" (Robson, 2002, pp. 59 as cited by Saunders, Lewis and Thornhill, 2009). This specific research will investigate and identify Intel's suppliers, supplier's roles and describe their effect on Intel's competitive position within its innovation ecosystem. Furthermore, it could be argued that the purpose of this research is descriptive in the sense that it is drawn from existing academic knowledge and applies this knowledge to a specific setting. Consequently, this study clearly uses a deductive approach and consequently the problem statement and research questions are drawn up from existing theory.

3.2 Research Design

The research design that will be applied in this study is a single case study research strategy, since it involves the investigation of a particular contemporary phenomenon within its real life context at one specific organization (Intel) (Saunders et al., 2009). Consequently, as the topic for this research will be investigated at Intel it could be considered as a real life context and not as an e.g. artificial laboratory experiment. Additionally, the organization will be threaded as a single entity (whole) for the unit of analysis, therefore the case study can be considered as holistic (Saunders et al., 2009). At last, this research will use a cross-sectional or 'snapshot' regarding its time horizon, as it involves the study of a particular phenomenon at a particular point in time and due to the limited time-frame of six months appointed for this study (Saunders et al., 2009).

3.3 Sampling Strategy

The sampling strategy that will be used for this study is non-probability sampling, since there is no need for statistically estimating the characteristics of the population sample (Saunders et al., 2009). However, it remains possible to generalize from non-probability samples although not on statistical grounds. Additionally, it is crucial for this research to use a sample which results in an information-rich in-depth case study (Saunders et al., 2009). Furthermore, purposive sampling will be used, since the cases will be selected based on the researcher's judgment and additionally this method is suited for case studies according to Saunders et al. (2009). Heterogeneous sampling will be used; the discussion of key themes will be the focus during the interviews that will be held. At last, in total 20 persons will be interviewed, all of them part of top management (e.g. CEO and CFO), executive board or part of higher and/or middle management, since these persons will have an overview of the company with regard to the topics that will be dealt with during the interviews.

3.4 Data Collection

For this research primary qualitative data will be collected by means of face-to-face semi-structured interviews (audio-recorded). Although, Saunders et al. (2009) propose structured interviews to be used for descriptive research designs, this research will use semi-structured interviews in order to thoroughly discuss each of the key themes in detail and provide the possibility to let the interviewees elaborate their answers in detail if necessary. Semi-structured interviews are considered as non-standardized qualitative research interviews. Furthermore, secondary data are used by means of academic articles (documentary secondary data) in order to write the theoretical background for this study and describe the variables that are part of the problem statement. In advance these qualitative secondary data sources are used to drawn up the problem statement and the research questions (deductive approach). Furthermore, the secondary data is used to come up with the questions for the semi-structured interviews. Concluding, multiple qualitative data collection techniques are used for this study (multi-method qualitative study) in the form of the semi-structured interviews and the use of academic journals as secondary data sources (Saunders et al., 2009).

3.5 Data Analysis

First, the qualitative secondary data originating from the academic articles are critically analyzed and successively synthesized within the theoretical background. Second, the qualitative primary data obtained from the semi-structured interviews need to be transcribed (prepared) before they can be analyzed (Saunders et al., 2009). Furthermore, the initials of the interviewer and interviewees will be used and the predetermined questions will be numbered (e.g. Q5) within the transcriptions of the interview audio-recordings (Saunders et al., 2009). After preparing the data, the primary data will be analyzed using a deductive approach, since a theoretical framework (background) is used to design an analyze this study (Saunders et al., 2009). Consecutively, the data will be summarized and categorized. Finally, pattern matching will be applied to the categorized data in order to link the theoretical background with the obtained primary data and to find patterns within the data that match that which has been predicted through the conceptual framework (Saunders et al., 2009).

3.6 Validity and Reliability

Regarding the validity of this research one could say there could not be made any statistical generalizations about the population, since this study is qualitative and uses purposive sampling (non-probability) for selecting its cases. Furthermore, this study is cross-sectional and therefore excludes or minimized most of the threats to validity, such as: mortality, maturation and instrumentation. Additionally, the threats of testing and ambiguity about the causal direction do not play a role within this research, due to the topic at hand and the fact that the causal direction is profound by existing academic literature. The themes of interest do not have anything to do with peoples quality and/or performance and therefore the testing threat to validity is minimized. Moreover, as face-to-face semi-structured interviews are used the validity can be increased as it is possible to clarify questions and/or answers from the interviewer or the interviewee. At last, to increase the (internal) validity of the research much attention will be put into the preparation of the interview questions and the careful conduction of the interviews. With regard to the external validity (generalisability) one could argue that this study is not generalisable, since this research is a single case-study which focuses on one single organization (Intel) (Saunders et al., 2009).

Regarding the reliability of this research there are several biases that are a threat to reliability, especially when conducting semi-structured interviews. There is always the threat of subject (interviewee) error, although this threat can be minimized by conducting the interviews on a 'neutral' time and place (Saunders et al., 2009). Furthermore, there is the threat of subject bias, were interview subjects are insecure about their future employment. A method to reduce this threat is to ensure the anonymity of all interviewees. At last, observer (interviewer) bias and error are a threat to reliability, were bias of the interviewer may be caused by his/her perceptions. However, this last threat is almost inevitable in a qualitative single case-study were semi-structured interviews are held (Saunders et al., 2009). At last, the only thing the interviewer could do in order to obtain valid information is to behave normal and gain the interviewees trust.