Selecting business partner for service delivery co-innovation and competitive advantage

Purpose – While co-innovation with third parties (e.g. customer or supplier) has been widely documented, the literature seems to pay scant attention on co-innovation with business partners. Building on the resource dependence theory (RDT) and the input-process-output model, the purpose of this paper is to examine how four criteria of business partner selection affect service delivery co-innovation, which, in turn, influences firms’ competitive advantage. Design/methodology/approach – A mail survey was sent to 600 IT service firms in Taiwan, the target respondents being senior marketing managers in charge of collaborative new service development. A total of 120 usable questionnaires were collected, for a response rate of 20 percent. Findings – The findings support the argument that all four criteria of business partner selection have positive relationships with service delivery co-innovation. Meanwhile, adopting these criteria, firms’ service delivery co-innovation is able to create superior competitive advantage. Research limitations/implications – The findings enrich the existing literature by proposing and empirically confirming that the use of appropriate criteria to select business partners enhances the effectiveness of firms’ service delivery co-innovation and competitive advantage. Practical implications – Managers must be aware of the criteria to select their business partners, in terms of developing service delivery co-innovation. Originality/value – This study adds to the service innovation literature by providing support for the RDT that partner reliability, partner complementarity, partner expertise, and partner compatibility are important business partner selection criteria to create service delivery co-innovation and achieve firms’ competitive advantage.