Trouble in Paradise: a Case of a Technology Industry Supply Network

Abstract

The development of value networks is regarded as a necessity for achieving agility in global markets. Nowadays the focal companies often state that they are committing to more in-depth partnerships with selected suppliers, which are given more responsibility over both production and R&D. In this article we study the relationship of one focal company with its suppliers and identify the main concerns regarding governance and cooperation within the studied supply network in relation with the focal company’s strategy to enhance its innovative capabilities and ensure capacity in its supplier network. By analyzing the network relationships from three differing vantage points (the focal company, the supply companies, and the venture capitalists) we present three most challenging issues in the development of partnerships within the strategic context.