The Impact of Competitive Strategy and Supply Chain Strategy on

Business Performance: The Role of Environmental Uncertainty

Submitted by Ankit Sharma

Summary
This Paper is studying the relationships among competitive strategy, supply chain
strategy, and business performance while examining the moderating effect of environmental
uncertainty.

There are two types of supply chain strategies

 Efficient supply chain- efficient supply chain is to supply predictable demand efficiently
at lower cost
 Responsive supply chain- It emphasizes a quick response to unpredictable demand in
order to reduce obsolescence and stock outs.

In order to conduct research they have replaced efficient supply chain with Lean supply chain
in order to stress the features of leanness. Similarly, the term agile have replaced responsive was
adopted to emphasize the overall goals of a supply chain in responding to uncertain and changing
environments.

Agile and Lean Supply chain in different environmental condition:

 A lean system places more emphasis on leveling the production schedule while an agile
system stresses rapid reconfiguration and robustness. Companies that pursue
differentiation strategy may also try to stay lean even though their primary focus is to
offer products and services that are uniquely different from competitors.
 An agile supply chain can help companies address changing customer needs and quickly
design and introduce customized products with unique features to gain competitive
advantages in a constantly changing environment.
 Agile supply chain is needed in less-predictable environments where demand is volatile
and the requirement for variety is high, whereas lean works best in high volume, low
variety, and predictable environments.
  An agile strategy provides firms with flexibility to cope with changing technologies,
uncertain demand, and short product lifecycle whereas a lean strategy performs better in a
stable and predictable environment than in a volatile environment.

Here total of 604 questionnaires were collected from three cities in China
And the results show significant moderating effects of external environment on the relationships
among competitive strategy, supply chain strategy, and business performance.
The following variables were chosen:
Cost leadership strategy, differentiation strategy, lean supply chain strategy, agile supply chain
strategy, environmental uncertainty with three dimensions, demand uncertainty (DU), supply
uncertainty (SU), and technological uncertainty (TU), and Business Performance (BP).

Critique of Paper
In this paper the author systematically study competitive strategy and supply chain
strategy in china but the use of Chinese data could also limit generalization of the findings. It
would be interesting to compare competitive and supply chain strategies in china with those in
other Asian and western countries. They does not study through traditional supply chain strategy
which also one of the famous strategy.
This study does not consider the possibility that the company may proceed
simultaneously produce products that compete in terms of cost differentiation. Further studies
should examine the impact of multiple product line on the strategic selection and
implementation.
There can also be included various parameters to broaden the study and gives more depth
to the research like Product characteristics and performance impact on supply chain management
and lead time on the supply chain performance.
To get the better test for degree of mediation effects from supply chain strategy we have
to build the another model to get better results in which the paths from cost leadership and
differentiation to BP were added in the model.