Market segmentation strategies: a moderate role of product complexity

This article investigates how firms manage outsourcing in situation of an innovative supplier market niche. The article makes three distinctive contributions to the more general field of purchasing and supply management research. Firstly, with the help of our longitudinal case studies, we illustrate how firms manage outsourcing when they lack an initial supplier market. On could contend that an innovative supplier market niche essentially leaves a company proactively to build a supplier market to which it can outsource. Secondly, we combine the resource-based view and transaction cost economics, and contributing by adding greater depth to the understanding of outsourcing to an internationalised medium sized multinationals. In particular, the findings increase the understanding of the operational level of outsourcing decisions vs. the strategic level, as well as the value of the traditional core/non-core login in outsourcing strategies. Thirdly, our proposed outsourcing framework provides managers with an aide memoire when considering outsourcing in internationalised medium sized multinationals.