Learning by supplying to climb the value chain: suppliers’ transition from B-to-B to B-to-C

Abstract

Purpose Drawing on organizational learning and dynamic capabilities literature, this study aims to explore how suppliers from traditional emerging economies (STEE) can acquire, assimilate and use new knowledge essential for the development of production and marketing capabilities. These capabilities then facilitate suppliers in climbing the value chain from B-to-B to B-to-C. Design/methodology/approach The study adopted a longitudinal and multiple case study design to examine the practices of suppliers operating in a traditional emerging economy setting. This study selected Pakistan textile industry as an empirical setting, which is a predominantly supplier market for global buyers. Data sources entail semi-structured interviews with top executives and senior-level managers in four case firms and secondary data obtained from diverse sources. Findings The study identified transitionary phases of capabilities development that are facilitated by boundary-spanning knowledge acquisition and transformation in a dynamic manner. These capabilities are essential for a supplier’s entry into downstream international markets (i.e. launching its own products/brands in the end consumers’ market). Practical implications The findings could help managers in STEEs to understand the strategic importance of supply chain ties in their learning and capabilities development. It also provides strategic insights on what, how and why involved parties do engage over an extended period of time. Moreover, the findings of this study could help other firms to know and adopt the right type of technology(s) and systems that can help them reduce the technological gap in producing and marketing market-winning products. Originality/value This study advances the recent academic discussion that focusses on learning by supplying and the value-chain movement of suppliers (i.e. B-to-C) from their B-to-B engagements. The findings identified the vital and beneficial role of long-term relationships with global value chain partners in learning and capabilities development that led to value creation in the traditional emerging economy.