How does a component from a supplier with high reputation for product innovation improve the perception of a final offering? A process perspective

An excellent reputation for product innovation (RPI) is an intangible asset for any company and promises a sustainable competitive advantage. This study empirically analyzes the spillover effects of a high component supplier's RPI to the offering of the original equipment manufacturer (OEM). The results show that there are positive effects to be gained from the innovativeness of a component supplier, which increases the perceived performance of the final offering containing the supplier's product. In addition, the study demonstrates that such a strategic partnership between a component supplier and an OEM has the potential to influence the purchase intention of the final consumer in a positive manner, thereby creating value for both parties. Contributions are made to a better understanding of strategic options for such a partnership and to an on-going discussion on RPI and the importance of intangible attributes in innovation management.