Studying the relationship between service and IT capability and performance of third-party logistics providers in Finland

According to the resource-based view (RBV) of firms, resource or capability can be regarded as the key strategic means of acquiring sustained competitive advantage. In order to fully exploit business opportunities and serve the needs of customers, firms should understand their core capabilities. The RBV can provide a theoretical framework to examine the effects of capabilities on firm performance, and recently it has been increasingly employed in logistics management studies. The purpose of this master's thesis is to explore the capabilities and performance of companies known as 3PL providers. The concept of 3PL provider involves the use of external companies to perform logistics functions, such as distribution, warehousing and customs clearance, that have traditionally been performed within an organization. The thesis seeks to find out if the RBV can explain the relationship between 3PL providers' service and IT capabilities and their operational and financial performance. The thesis is carried out as a survey research with the aim to provide empirical evidence for the use of RBV in Finland's 3PL provider industry. Data is collected from 3PL providers operating in Finland with the help of a web-based questionnaire. Among 910 companies fulfilling the participation criteria, further 113 were randomly chosen as respondents. From this sample, altogether 52 responses were collected and analyzed. The results identify the most satisfactory capabilities and indicate performance level as perceived by the respondents. The results also show that 3PL providers having IT capabilities in place have better operational and financial performance. IT capabilities can also be used to support and facilitate service capabilities, which leads to improved performance. These results are in line with the findings by other researchers. Since it was empirically proven by the results of this thesis that RBV can explain the relationship between capabilities and performance, companies should pay attention to identifying and actively developing their internal capabilities in order to attain competitive advantage with respect to competitors. Thus, the study findings have important implications both for researcher and managers