Procurement strategies and competitive advantages of manufacturing firms in Ghana: The role of firm size

Abstract

A key strategy to gaining competitive advantage has been the use of procurement. However, there is the need to determine the procurement strategy when adopted contributes to a firm’s competitive advantage, hence the focus of the study. This study delves into the relationship between procurement strategies and competitive advantage within the manufacturing sector of Ghana, guided by the dynamic capability theory. With a comprehensive review of the existing literature, the investigation scrutinizes the impact of outsourcing, e-procurement, global sourcing, supplier collaboration, supplier evaluation, and green procurement on the competitive advantage of manufacturing firms. Employing a simple random sampling, data was gathered from 202 top executives representing various manufacturing companies in Ghana. The research employed Statistical Package for Services Solution (SPSS) version 24 and SmartPLS version 4 to analyze the data. The study uncovers a significant positive association between supplier collaboration and competitive advantage, highlighting the pivotal role of collaborative efforts in fortifying a firm's position through improved efficiency. Green procurement emerged as a standout contributor to competitive advantage, with environmentally friendly practices significantly enhancing the market position of manufacturing firms in Ghana. Furthermore, the study introduces the moderating effect of firm size, elucidating how larger manufacturing firms leverage procurement strategies more effectively to gain a competitive advantage compared to their smaller counterparts. The study recommended that there should be a conscious effort to prioritize risk assessment in outsourcing decisions, considering potential impacts on quality, intellectual property, and supply chain disruptions.