Leveraging Supply Chain Information Integration in Bottom-of-Pyramid Segments of Emerging Markets

Abstract

Bottom-of-Pyramid (BOP) segments of emerging markets pose unique challenges for supply chains due to institutional contexts and settings. Supply chain information integration (SCII) as an IT-enabled capability can help firms to improve collaborations with suppliers and clients, and lead to a higher performance. However, how domestic and foreign firms leverage SCII differs due to the different sets of challenges faced by the two categories of firms. We posit that the influence of SCII on firm performance through client collaboration path is positive for both domestic and foreign firms, but stronger for domestic firms; whereas, the supplier collaboration path is positive for foreign firms but negative for domestic firms. We empirically validate this concept in the BOP segment of an emerging market by comparing the outcomes of leveraging SCII for collaboration, across foreign and domestic automobile ancillary and parts manufacturing firms located in India. These small and medium scale firms are relevant to the two-wheelers and low-cost cars automotive sector, serving the low-income families in India, and form exemplary cases of firms embedded in a BOP market based supply chain. Overall, our results demonstrate that SCII influences firm performance through client and supplier collaboration capabilities. Both partial least squares and econometric analysis of a unique dataset collected through survey of 172 firms reveal broad support for our theorized relationships.

Keywords: Supply chain information integration, client collaboration, supplier collaboration, emerging markets, BOP markets, IT-enabled supply chains, partial least squares, questionnaire surveys