This study replicates and extends Ferdows and De Meyers' observed ‘sand cone’ model of cumulative competitive capabilities by means of Roth's related competitive progression theory (CPT). Using path analysis, we model and test the relationships among the generic competitive capability constructs of conformance quality, delivery reliability, volume flexibility, and low cost as predicted by CPT. Our results, drawn from a sample of high‐tech manufacturers, provide further evidence that on average, these four capabilities are acquired both cumulatively and in that sequence. We also find that each generic capability increases operational know‐how and reduces non‐value‐added directly and/or indirectly through the enhancement of successive capabilities in the progression, which in turn improves profitability. The paper contributes a theoretical rationale for the observed sand cone effect, describes how the competitive progression acts to influence accelerated organizational learning over an innovation cycle, and offers evidence that combinative capabilities have strategic value for high‐tech manufacturers.
ArgyrisC.1977. Double loop learning in organizations. Harvard Business Review55(5) 115–125.
4.
BlocherJ. D.GarrettR. W.SchmennerR. W.1999. Throughput time reduction: Taking one's medicine. Production and Operations Management8(4) 357–373.
5.
BollenK.1989. Structural equations with latent variables. John Wiley & Sons, New York, New York.
6.
BoyerK. K.Lewis.M.2002. Competitive priorities: Investigating the need for tradeoffs in operations strategy. Production and Operations Management11(1) 9–20.
7.
ChangS.LinN.WeaC.Sheu.C.2002. Aligning manufacturing capabilities with business strategy: An empirical study in high‐tech industry. International Journal of Technology Management24(1) 70–87.
8.
ChurchillG. A.1995. Marketing research: Methodological foundations. The Dryden Press, Fort Worth, Texas.
9.
ClarkK.1996. Competing through manufacturing and the new manufacturing paradigm: Is manufacturing strategy pass 233?Production and Operations Management5(1) 42–42.
10.
CohenW.Levinthal.D.1990. Absorptive capacity: A new perspective on learning and innovation. Administrative Science Quarterly35(1) 128–152.
11.
CoolK. O.Schendel.D.1987. Strategic group formation and performance: The case of the U.S. pharmaceutical industry. Management Science33(9) 1102–1124.
12.
CorbettC.Kirsch.D. A.2001. International diffusion of ISO 14000 certification. Production and Operations Management10(3) 327–342.
13.
CorbettC.VanWassenhoveL.1993. Trade‐offs? What trade‐offs? Competence and competitiveness in manufacturing strategy. Cal Mgt Review35(4) 107–122.
14.
DillmanD.1978. Mail and telephone surveys: The total design method. John Wiley, New York, New York.
15.
DostalerI.2001. Beyond practices: A qualitative inquiry into high performance electronic assembly. Production and Operations Management10(4) 478–493.
16.
DroletA. L.Morrison.D. G.2001. Do we really need multiple‐item measures in service research?Journal of Service Research3(3) 196–196.
17.
FerdowsK.DeMeyerA.1990. Lasting improvements in manufacturing performance: In search of a new theory. Journal of Operations Management9(2) 168–184.
18.
FineC.2000. Clockspeed‐based strategies for supply chain design. Production and Operations Management9(3) 213–221.
19.
FlynnB.Flynn.J.2004. An exploratory study of the nature of cumulative capabilities. Journal of Operations Management22(5) 439–457.
20.
FlynnB.SchroederR.FlynnJ.1999. World class manufacturing: An investigation of Hayes and Wheelwright's foundation. Journal of Operations Management17(3) 249–269.
21.
GarvinD.1987. Competing on the eight dimensions of quality. Harvard Business Review65(6) 101–110.
22.
GerwinD.1993. Manufacturing flexibility: A strategic perspective. Management Science39(4) 395–410.
23.
GiffiC.RothA. V.SealG. M.1990. Competing in world class manufacturing: America's 21st century challenge. Richard D. Irwin, Inc., Homewood, Illinois.
24.
GrantR. M.1996. Prospering in dynamically‐competitive environments: Organizational capability as knowledge integration. Organization Science7(4) 375–387.
25.
GuptaY. P.Lonial.S. C.1998. Exploring linkages between manufacturing strategy, business strategy, and organizational strategy. Production and Operations Management7(3) 243–264.
26.
GuptaY. P.Somers.T. M.1996. Business strategy, manufacturing flexibility, and organizational performance relationships: A path analysis approach. Production and Operations Management5(3) 204–232.
27.
HayesR.1992. Production and operations management's new ‘requisite variety’. Production and Operations Management1(3) 249–253.
28.
HayesR.Pisano.G.1996. Manufacturing strategy: At the intersection of two paradigm shifts. Production and Operations Management5(1) 25–41.
29.
HayesR.Schmenner.R.1978. How should you organize manufacturing?Harvard Business Review56(1) 105–105.
30.
HayesR.Upton.D.1998. Operations‐based strategy. Cal Mgt Review40(4) 8–20.
31.
HayesR.Wheelwright.S.1979. Link manufacturing process and product life cycles. Harvard Business Review57(1) 133–140.
32.
HayesR.PisanoG.UptonD.Wheelwright.S.2004. Operations, strategy, and technology: Pursuing the competitive edge. John Wiley & Sons, Inc., New York, New York.
33.
HillT.1989. Manufacturing strategy: Text and cases. MacMillan, London UK.
34.
IttnerC. D.NagarV.RajanM. V.2001. An empirical examination of quality‐based learning models. Management Science47(4) 563–578.
35.
JackE.Raturi.A.2002. Sources of volume flexibility and their impact on performance. Journal of Operations Management20(5) 519–548.
36.
JackE.Raturi.A.2003. Measuring and comparing volume flexibility in the capital goods industry. Production and Operations Management12(4) 480–500.
37.
KerkhoffJ.EagarT. W.UtterbackJ.1998. A systematic strategy for optimizing manufacturing operations. Production and Operations Management7(1) 67–85.
38.
KogutB.Zander.U.1992. Knowledge of the firm, combinative capabilities, and the replication of technology. Organization Science3(3) 383–397.
39.
KosteL.Malhotra.M.1999. A theoretical framework for analyzing the dimensions of manufacturing flexibility. Journal of Operations Management18(1) 75–93.
40.
KoufterosX.VonderembseM.DollW.2002. Examining the competitive capabilities of manufacturing firms. Structural Equation Modeling9(2) 256–282.
41.
LapreM.MukherjeeA.VanWassenhoveL.2000. Behind the learning curve: Linking learning activities to waste reduction. Management Science46(5) 597–611.
42.
LapreM.Scudder.G. D.2004. Performance improvement paths in the U.S. airline industry: Linking trade‐offs to asset frontiers. Production and Operations Management13(2) 123–134.
43.
LefebvreL. A.LangleyA.HarveyJ.Lefebvre.E.1992. Exploring the strategy‐technology connection on small manufacturing firms. Production and Operations Management1(3) 269–285.
44.
Leonard‐BartonD.1992. The factory as a learning laboratory. Sloan Management Review34(1) 23–38.
NakaneJ.1986. Manufacturing futures survey in Japan: A comparative survey 1983‐1986. Waseda University, Tokyo, Japan.
50.
NarasimhanR.J.JayaramJ. Carter2001. An empirical examination of the underlying dimensions of purchasing competence. Production and Operations Management10(1) 1–15.
51.
NobleM. A.1995. Manufacturing strategy: Testing the cumulative model in a multiple country context. Decision Sciences26(5) 693–721.
52.
NonakaI.1994. A dynamic theory of organizational knowledge creation. Organization Science5(1) 14–37.
53.
PagellM.MelnykS.HandfieldR.2000. Do tradeoffs exist in operations strategy? Insights from the stamping die industry. Business Horizons43(3) 69–77.
54.
PisanoG.Wheelwright.S.1995. The new logic of high‐tech R&D. Harvard Business Review73(5) 93–105.
55.
PorterM.1996. What is strategy?Harvard Business Review74(6) 61–61.
56.
RitzmanL.Safizadeh.M.1999. Linking process choice with plantlevel decisions about capital and human resources. Production and Operations Management8(4) 374–392.
57.
RothA. V.1996a. Competitive progression theory: Explanation and evidence in Manufacturing Strategy in a Global Context, VossC. (ed.), London Business School Press, London UK.
58.
RothA. V.1996b. Neo‐operations strategy: Linking capabilities‐based competition to technology in Handbook of Technology Management, GaynorG. (ed.), McGraw‐Hill, New York, New York, 38.1–38.44.
59.
RothA. V.Chapman.R. J.1993. Competing in the electronic industry: Benchmarking world class performers. Journal of Electronics Manufacturing339–57.
60.
RothA. V.Giffi.C.1995. Winning in global markets: Neo‐operations strategies in U.S. and Japanese manufacturing. Operations Management Review10(4) 1–35.
61.
RothA. V.Jackson.W.1995. Strategic determinants of service quality and performance: Evidence from the banking industry. Management Science41(11) 1720–1733.
62.
RothA. V.Miller.J.1992. Success factors in manufacturing. Business Horizons35(4) 73–81.
RothA. V.GrayA.SinghalJ.Singhal.K.1997. International technology and operations management: Resource toolkit for research and teaching. Production and Operations Management6(2) 167–187.
65.
SafizadehM.RitzmanL.MallickD.2000. Alternative paradigms in manufacturing strategy. Production and Operations Management9(2) 111–127.
66.
SamaddarS.Heiko.L.1993. Waste elimination: The common denominator for improving operations. Industrial Management and Data Systems93(8) 13–19.
67.
SchmennerR.1997. A comment on Kim Clark's ‘Competing through manufacturing and the new manufacturing paradigm: Is manufacturing strategy pass 233 ?’Production and Operations Management6(4) 353–353.
68.
SchmennerR.Swink.M.1998. On theory in operations management. Journal of Operations Management17(1) 97–113.
69.
SchonbergerR.1986. World class manufacturing: The lessons of simplicity applied. The Free Press, New York, New York.
70.
SchroederR.FlynnE.FlynnB.Hollingworth.D.1996. Manufacturing performance tradeoffs: An empirical investigation in Manufacturing strategy: Operations strategy in a global context, VossC. (ed.), London Business School, London UK.
71.
SkinnerW.1969. Manufacturing‐missing link in corporate strategy. Harvard Business Review47(3) 136–145.
72.
SkinnerW.1996a. Manufacturing strategy on the ‘S’ curve. Production and Operations Management5(1) 3–13.
73.
SkinnerW.1996b. Three yards and a cloud of dust: Industrial management at century end. Production and Operations Management5(1) 15–24.
74.
St.JohnC. H.YoungS. T.1992. An exploratory study of patterns of priorities and trade‐offs among operations managers. Production and Operations Management1(2) 133–150.
75.
StalkG.EvansP.ShulmanL.1992. Competing on capabilities: The new rules of corporate strategy. Harvard Business Review70(2) 57–69.
76.
VickeryS.CalantoneR.DrogeC.1999. Supply chain flexibility: An empirical study. Journal of Supply Chain Management35(3) 16–24.
77.
VickeryS.DrogeC.MarklandR. E.1994. Strategic production competence: Convergent, discriminant, and predictive validity. Production and Operations Management3(4) 308–318.
78.
VossC. A.Winch.G. M.1996. Including engineering in operations strategy. Production and Operations Management5(1) 78–90.
79.
WackerJ.1996. A theoretical model of manufacturing lead times and their relationship to manufacturing goal hierarchy. Decision Sciences27(3) 483–518.
80.
WheelwrightS. C.Bowen.H. K.1996. The challenge of manufacturing advantage. Production and Operations Management5(1) 59–77.
81.
WhiteG.1996. A meta‐analysis of manufacturing capabilities. Journal of Operations Management14(4) 315–331.
82.
WomackJ.JonesD.RoosD.1990. The machine that changed the world. Rawson Associates, New York, New York.
