Production sourcing strategies and buyer‐supplier relationships: A study of the differences between small and large enterprises in the Hong Kong clothing industry

Abstract

Purpose

The main purpose of this paper is to compare the differences between the small and medium‐sized enterprises (SMEs) and the large enterprises (LEs) of the Hong Kong clothing industry in terms of the adoption of production sourcing strategies and buyer‐supplier relationships.

Design/methodology/approach

A questionnaire survey was conducted among 120 small to large‐sized clothing firms in Hong Kong.

Findings

The results show that there were certain differences between SMEs and LEs with regard to production sourcing: LEs are more able to disperse production globally; LEs are more likely to adopt single sourcing, while SMEs prefer multiple sourcing; SMEs tend to use a combined strategy of in‐ and outsourcing, whereas LEs select either insourcing or outsourcing; and LEs are more likely to develop a formal strategic alliance with their trading partners.

Research limitations/implications

The adoption of sourcing strategies and buyer‐supplier relationships may change over time: future research should also be directed towards collecting longitudinal data.

Practical implications

To compete with LEs, SMEs have to ally strategically with their trading partners. Adopting sourcing strategies in a more cooperative manner is therefore imperative. Nonetheless, both SMEs and LEs should exploit their advantages by adopting proper or innovative combinations of sourcing strategies and buyer‐supplier relationships, and hence their respective disadvantages can be offset and their competitive advantages can be enhanced.

Originality/value

This paper examines the differences between SMEs and LEs in the adoption of production sourcing strategies and buyer‐supplier relationships. This study provides an implication for the management of SMEs and LEs in terms of production sourcing.

Citation

Tam, F.Y., Moon, K.L., Ng, S.F. and Hui, C.L. (2007), "Production sourcing strategies and buyer‐supplier relationships: A study of the differences between small and large enterprises in the Hong Kong clothing industry", Journal of Fashion Marketing and Management, Vol. 11 No. 2, pp. 297-306. https://doi.org/10.1108/13612020710751446