Narrow Results

The dynamic capabilities framework analyzes the sources and methods of wealth creation and capture by private enterprise firms operating in environments of rapid technological change. The competitive advantage of firms is seen as resting on distinctive processes (ways of coordinating and combining), shaped by the firm's (specific) asset positions (such as the firm's portfolio of difficult-to-trade knowledge assets and complementary assets), and the evolution path(s) it has adopted or inherited. The importance of path dependencies is amplified where conditions of increasing returns exist. Whether and how a firm's competitive advantage is eroded depends on the stability of market demand, and the ease of replicability (expanding internally) and imitatability (replication by competitors). If correct, the framework suggests that private wealth creation in regimes of rapid technological change depends in large measure on honing internal technological, organizational, and managerial processes inside the firm. In short, identifying new opportunities and organizing effectively and efficiently to embrace them are generally more fundamental to private wealth creation than is strategizing, if by strategizing one means engaging in business conduct that keeps competitors off balance, raises rival's costs, and excludes new entrants.

The aim of this paper is to make a contribution to the mapping of the vendor's process in outsourcing and to explore how that process has been built over the time. In addition, the paper aims at coming to grips with the fundamental issue of how an electronic manufacturing service (EMS) provider can develop its competences and capabilities to compete effectively and efficiently in this increasingly more competitive industry. The paper has been written in a teaching case style where the case of Escatec, a tier-two EMS has been presented. Escatec, have been adding various skills, knowledge and technologies into a set of competences that have been integrated into a well-structured process that reflects customers' requirements. Findings from the case suggest that the vendor's process is cyclic in its nature, with equally strong emphasis on getting the new and retaining the existing customers. Based on the analysis of Escatec's process and competences we propose that the key success factors for a successful one-stop-shop type of EMS are to 1) Establish rich portfolio of competences; 2) Integrate the competences into a process; 3) Ensure that process depicts the nature of the industry; 4) Develop a modular process that will enable capturing of customers anywhere along the value chain; 5) Continuously improve competences that mostly contribute to the organization's performance.