An examination of the cumulative capabilities model in selected Asia-Pacific countries

Abstract

A well-crafted manufacturing strategy enables a company to develop its key competitive capabilities (quality, delivery, flexibility and cost efficiency) and enhance its competitiveness in the marketplace. To date, three models have been proposed to guide companies on the development and improvement of these capabilities. These are the trade-off, cumulative and integrative models. Our study focuses on the popular cumulative model proposed by Ferdows and De Meyer (1990). The cumulative model not only suggests that firms can simultaneously compete on all four capabilities, but also defines how this can be done by following a specific pattern of capability improvements. There has been a wide debate in the literature on the validity and applicability of the cumulative model. We tested the cumulative model using data from 218 manufacturing firms in five Asia-Pacific countries (Hong Kong, Singapore, Taiwan, Korea and Australia). We found evidence in support of the model, though this support was not emphatic. Our results suggest that firms, after developing the quality capability, move on to simultaneously cultivate the delivery, flexibility and cost capabilities. Higher level capabilities, such as flexibility and cost, are indirectly related to each other. Our results also show that the pattern of capability development and improvement is not affected by performance. However, the pattern is different across countries. We discuss the implications of these in this article. © 2012 Taylor and Francis Group, LLC.