New perspectives on the supply chain and consumer-driven innovation

This paper considers the interrelationship between innovation and the control of the supply-chain in two UK-based consumer-driven industries, supermarkets and magazine publishing, where competitive advantage is driven by constant innovation dependent on satisfying quickly changing consumer fashions, trends, tastes and patterns of demand. Innovation in this environment depends on the close interaction between firms and their customers, and this relationship includes information exchange as well as the control of the physical logistics-chain. In order to examine the relations between partners and the process of innovation the paper employs the concepts of control and innovation networks as analytical frameworks. The paper suggests that whilst the close collaboration between partners in the supply-chain is usually viewed positively, control networks allow the hub firms to identify and appropriate value-adding activities and acquire a much stronger bargaining position relative to other actors. The paper argues for a more sophisticated understanding of the relative positions of the actors with the value-system and suggests further research is needed to understand innovation in industries where there have been similar changes to the supply-chain.