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 consumer-driven industries. In particular the paper employs the concepts of Control and Innovation Networks as an analytical framework to examine the coordination of the supply-chain and inter-organisational collaboration. In-depth empirical evidence is provided by two cases industries: the UK supermarket and the UK consumer magazine publishing sector. By separating the process of supply-chain integration and coordination from the control of supply-chain, motives for collaboration and conflict were explored. A detailed analysis is given of the innovation process in both sectors, and new patterns of inter-organisational cooperation are identified. Network Hubs were shown to be able to use their control of the critical information of consumer demand to drive innovation and extract value-adding activities. In both cases examined the Innovation Hub was able to greatly extend the industry supplier base through the incorporation of external actors into the value system. This has widened the industry participation, but acted to change patterns of innovation within sectors. Consumer-driven Innovation Networks dependent on access to consumers through retail channels were found to be potentially vulnerable to retailer Control Networks