Supplier and Customer Involvement toward Firms’ Competitive Advantage: The Mediating Role of New Product Development Efficiency

Abstract

This study investigates the extent to which supplier and customer involvement contribute to competitive advantage among garment manufacturing firms in Pakistan, particularly through New Product Development (NPD) efficiency. A quantitative approach was adopted, and responses were obtained from 297 senior managers. Partial Least Squares Structural Equation Modeling (PLS-SEM) was utilized to evaluate the empirical data. The findings indicate that both supplier and customer involvement positively influence NPD efficiency and competitive advantage. NPD efficiency also has a significant effect on competitive advantage and partially mediates these relationships. The findings emphasize that closer integration with external stakeholders during the NPD process can improve operational efficiency and strengthen the firm’s market position. It further contributes to the combined effect of external integration and internal capabilities, which plays a significant role in enhancing firm performance. These implications may add value to small and medium-sized enterprises functioning in other emerging economies, such as the garment sector.