Journal of Purchasing & Supply Man

tw

a,

ado

ing

ity o

for

how

ern

e s

n i

international exposure and involvement. However, differently from the Uppsala establishment chain internationalisation model, our

Geref, 1999; Simchi-Levi et al., 2000). Supply networkinternationalisation entails, for a given enterprise, interna-

static rather than a dynamic approach, and address issuesrelated to the foreign market internationalisation process

networks.In 2003 Romania was the 14th largest importer of Italian

goods with about 3.873 million h of purchased goods

ARTICLE IN PRESS

Corresponding author. Tel.: +390432 558246; fax: +39 0432 558298.

(+7.1% on 2002) and the 16th largest supplier to Italywith about 3.895 million h of sold goods (+2.1% on 2002)(ISTAT, 2004). Besides being one of the Romanias main

1478-4092/$ - see front matter r 2006 Elsevier Ltd. All rights reserved.

doi:10.1016/j.pursup.2006.07.002

E-mail addresses: arnaldo.camuffo@unipd.it (A. Camuffo),

andrea.furlan@unipd.it (A. Furlan), pietro.romano@uniud.it

(P. Romano), andrea.vinelli@unipd.it (A. Vinelli).tional distribution systems, a network of foreign suppliers,offshore manufacturing, or a combination of all three(Simchi-Levi et al., 2000). To structure decision makingand develop alternative strategies for managing supplynetworks across borders it is important to understand thereasons why internationalisation of supply networks takesplace. However, this is not enough. It is also critical toknow how to operate in foreign countries, and whatactivities to relocate abroad.

(i.e. the downstream network) rather than those related tothe supplier and production internationalisation process(i.e. upstream network) (Eriksson et al., 1997).To pursue this research objective, we propose a

conceptual framework that adapts and extends theUppsala internationalisation model (Johanson and Vahlne,1977) and apply it to analyse nine case studies of NorthEastern Italian footwear and apparel companies involvedin relocating to Romania some segments of their supplyordinated subcontracting, and (3) supply system relocation. We discuss the theoretical and managerial implications of these ndings and

suggest directions for further research.

r 2006 Elsevier Ltd. All rights reserved.

Keywords: Global supply network; Apparel and footwear industry; Production relocation

1. Introduction

Several studies have highlighted how the internationali-sation of operations is an increasingly disruptive phenom-enon (Klassen and Whybark, 1994; Akkermans et al., 1999;

This paper explores the process that dynamically linksthe whys, hows and whats of supply network inter-nationalisation over time. The underlying dynamics of thisprocess is indeed not well understood, since most of thestudies in international business research tend to assume across-case analysis suggests a different typology of supply network internationalisation processes: (1) traditional subcontracting, (2) co-The process of supply ne

Arnaldo Camuffoa, Andrea FurlanaDepartment of Economics, University of P

bDepartment of Electrical, Managerial and Mechanical EngineercDepartment of Management and Engineering, Univers

Received 10 July 2002; received in revised

Abstract

This paper explores the process that dynamically links the whys,

a conceptual framework that adapts and extends the Uppsala int

Italian footwear and apparel companies involved in relocating som

behavioural theories, our ndings conrm that internationalisatioagement 12 (2006) 135147

ork internationalisation

Pietro Romanob,, Andrea Vinellic

va, Via del Santo 33, 35123 Padova, Italy

, University of Udine, Via delle Scienze 208, 33100 Udine, Italy

f Padova, Stradella S. Nicola 3, 36100 Vicenza, Italy

m 23 March 2006; accepted 12 July 2006

s and whats of supply network internationalisation. We propose

ationalisation model and apply it to analyse nine case studies of

egments of their supply networks to Romania. Consistently with

s an incremental process in which rms gradually increase their

www.elsevier.com/locate/pursup

ARTICLE IN PRESS&trading partners, Italy has a leading role in Romanianeconomy as for Foreign Direct Investments (FDI). Indeed,more than 14,000 Italian-owned rms are located inRomania and 3.891 of these rms are from North Eastof Italy (ISTAT, 2004). Over the last few years North Eastof Italy has been greatly affected by the phenomenon ofrelocation of production to Eastern European countries,and particularly to Romania (Geref, 1999; Schmitz andKnorringa, 1999; Camuffo et al., 2004). The number, thesignicance and the variety of North Eastern Italianfootwear and apparel rms that have partially or totallyrelocated their production to Romania over the last 10years makes this an ideal empirical setting to studyinternational supply network recongurations.The paper is organised as follows. Section 2 reviews the

relevant literature and presents the conceptual frameworkon which the research is built. Section 3 describes theresearch methodology, while Sections 4 and 5 analyse thecase studies. Section 6 discusses the research and manage-rial implications of the study. Section 7 concludes the paperoffering suggestions for further academic research.

2. Theoretical background

2.1. Internationalisation of footwear and apparel supply

networks: whys, hows and whats

Kogut (1985) maintains that there are four reasons whyrms relocate production abroad, reasons that broadlycorrespond to four strategies: cost reduction, productionexibility improvement, skill/resource shortage avoidance,and proximity to markets. However, in mature industrieslike footwear and apparel cost reduction seems to be theimperative that dictates global delocalisation decisions. Butrelocating production to reduce costs may not be a robuststrategy. Firstly, relocation decisions are often based on astatic analysis, based on a short-term response tocompetitive threats. As highlighted by Bartmess and Cerny(1993) and Schniederjans and Zuckweiler (2004), decisionsabout supply network internationalisation often take asnap-shot approach focused on current wages and currentmaterial costs (i.e., the why of supply network internatio-nalisation) ignoring how these conditions may changeovertime and how these changes may affect supply networkinternationalisation process. Secondly, labour cost savingsof relocation strategies can be easily consumed by theincreased hidden costs, including additional training (dueto the lack of skilled workers), low-quality costs (due topoor workmanship and lack of quality culture amongworkers), deterioration of productivity, increased leadtimes and associated inventory costs (due to poortransportation and communication infrastructure), andunexpected logistics complications (due to multilevel andbureaucratic government structures). Finally, as argued byDornier et al. (1998), plant location decisions are often

A. Camuffo et al. / Journal of Purchasing136addressed almost solely by the companys manufacturingorganisation, overemphasising direct labour costs. Stan-dard accounting practices seriously inate the importanceof direct labour cost. Indeed, overhead cost allocations aretypically based on direct labour cost, thus promptingcompanies to allocate a large percentage of xed costs toproducts with high direct labour costs components.Several scholars claim the existence of a causal relation-

ship between the supply network internationalisationreasons and how a rm decides to internationalise itssupply network (Rugman et al., 1985; Douglas and Craig,1995; Geref, 1999). For example, when the supplynetwork is mainly internationalised to reduce productioncosts, independent sub-contractors are normally a goodoption. Since cost related reasons often drive internatio-nalisation decisions in apparel and footwear industry, sub-contracting is the most diffused form of internationalagreement within these industries (Geref, 1999). However,some large companies prefer to keep control over foreignproduction (e.g. through foreign direct investmentsFDI)to stabilise the supply source, and to prevent the improperuse of any know-how that should have had to betransferred to the foreign company. If the supply networkis decentralised to serve foreign markets, then FDI is thepreferred option (Rugman et al., 1985).As argued by Dornier et al. (1998), a third dimension of

supply network internationalisation is what activities a rmdecides to relocate abroad. Foreign plants can specialise inthe production of certain models/product lines for whichthey carry out all the production phases (i.e. horizontalrelocation) or perform only a given production phasewithin the supply network (i.e. vertical relocation). Alter-natively, as Staber et al. (1996) highlighted, focal rms candecide to relocate the whole supply system, replicating theoriginal home network model abroad.

2.2. The conceptual framework

In our opinion, two major limitations aw the literatureon supply network relocation decisions. Firstly, most ofthese studies assume a static approach in studying supplynetwork internationalisation. This is probably due to thediffusion of some widely accepted approaches, such as theeclectic approach (Dunning, 1988) or the transaction-basedapproach (Williamson, 1975; Gatignon and Anderson,1988), that are static in nature (Johanson and Vahlne,1990), being based on the assumption that each foreignmarket entry is made in isolation (Eriksson et al., 1997).Secondly, while there are several contributions that addressthe factors shaping the foreign markets entry modes ofrms that internationalise their downstream networks (e.g.Douglas and Craig, 1995; Harzing, 2002; Vermeulen andBarkema, 2002), few studies specically address thedecision process of rms that aim at internationalisingtheir supplier network.Building on these two limitations, we propose a

conceptual framework that dynamically addresses the

Supply Management 12 (2006) 135147process of supply network internationalisation. Embracingthe behavioural theory of the rm (Cyert and March,

co

These research constructs are linked by the set ofrelationships described below.

2.2.1. Relation 1: foreign country knowledge

internationalisation drivers

The reasons leading companies to internationalise theirsupply networks (i.e. whys) are shaped by the host marketknowledge accumulated overtime. As rms increase knowl-edge about consumers, labour market, competitive andinstitutional environment of the foreign country, thedrivers of internationalisation decisions can change. For

ARTICLE IN PRESS

Business Network

&1963), we consider the supply network internationalisationprocess as the consequence of a process of incrementaladjustments to changing conditions of the rm and itsenvironment (Johanson and Vahlne, 1977, p. 26). In otherwords, according to the literature (Johanson and Wieder-sheim-Paul, 1975; Bilkley and Tesar, 1977; Johanson andVahlne, 1977; Reid, 1983; Erramilli, 1991; Eriksson et al.,1997; Vermeulen and Barkema, 2002), decisions oninternationalisation are characterised by an incrementallearning process, where trial and error, and explorationplay an important role (March, 1991). This is due to thelack of experiential knowledge on foreign markets andoperations.Based on empirical data from Scandinavian rms,

Johanson and Vahlne (1977) developed a model (knownas the Uppsala internationalisation model) that emphasisesthe evolutionary process of internationalisation. Throughan incremental process, companies are able to deepen theirunderstanding of foreign culture, markets, and operations,thus reducing risk and uncertainty.Johanson and Vahlnes model received strong support

from several studies (Johanson and Nonaka, 1983;Bello and Barksdale, 1986), but also criticism of variouskind has been put forward (Reid, 1983; Rosson, 1987;Turnbull, 1987; Johanson and Vahlne, 1990). The majorcritic is that the model seems to be too deterministic.The model predicts that the rms engagement in aspecic country develops according to an predeterminedpattern (Johanson and Vahlne, 1990). No room forstrategic and entrepreneurial choices seems to be providedby the model nor any differences among the internationa-lisation processes followed by different internationalisingrms. Given these criticisms, Johanson and Vahlne (1990)argue in a later paper that one element that can explaindifferent behaviours of internationalising rms is thenetwork of business relationships in which companies areembedded. Since these relationships allow the internatio-nalising rm to access complementary resources andknowledge, different characters of the ties of the networkmay inuence the behaviour of the rm. In a study of theinternationalisation process of small high-tech companies,Linqvist (1988) nds that some companies follow thetraditional internationalisation pattern while others skippreliminary stages and rapidly set up their subsidiary in theforeign markets. It turns out that the rms that follow astraight internationalisation process are embedded innetworks of relationships with high-tech competence basedforeign rms.In this paper, we adapt the Uppsala model in order to

apply it to the supply network internationalisation process,explicitly taking into account the dynamic links amongwhys, hows and whats of supply network internationa-lisation. Moreover, we extend the Uppsala model in orderto encompass the inuence exerted by business networkson the internationalisation process.

A. Camuffo et al. / Journal of PurchasingThis way we built the conceptual framework representedin Fig. 1.o the resources: what are the resources used in thenetwork and what the patterns of adaptation betweenthem.exalevthe how and what decisions of supply network inter-nationalisation process.Business network context: the business network in whichthe focal rm is embedded. Following Anderson et al.(1994) business network can be structured in threedimensions:o the actors: who they are and how they are related toeach other;

o the activities: what activities are performed in thenetwork and how they are linked to each other;Commitment decisions: any decision to commit resourcesto foreign operations, that are, in our research setting,consider the extent to which such knowledge is notcodied (i.e. knowledge tacitness).Internationalisation drivers: the reasons why internatio-nalisation of supply network takes place.The framework encompasses the following researchnstructs:

Foreign country knowledge: knowledge about relevantcharacteristics of the foreign environment, opportunitiesand problems, such as consumer behaviours, sourcesavailability, labour market, competition, channels fordistribution, and payment conditions. This constructalso encompasses the characteristics of knowledgerequired to run foreign operations. In particular wemelscontext

Fig. 1. The conceptual framework.Foreign countryknowledge

Internationalizationdrivers(Why)

Commitment decisions(How, What)1

2

4 53

Supply Management 12 (2006) 135147 137ple, as a rm acquires full knowledge about skills andof training of foreign workers, it can start to relocate

ARTICLE IN PRESS&its production not only to reduce production costs, but alsoto access valuable competencies and capabilities of theforeign labour market.

2.2.2. Relation 2: internationalisation driverscommitment

decisions

As argued by Douglas and Craig (1995), drivers behindinternationalisation process inuence the commitmentdecisions, namely those regarding the hows and whatsof supply network internationalisation in a particularcountry (Johanson and Vahlne, 1977). For example, whensupply network internationalisation is driven by marketproximity, rms tend to prefer entry modes, such as FDIs.Conversely, if the driver is lowering costs, independentsubcontractors are often preferred as entry mode. In theformer case, supply network internationalisation oftenencompasses a wide range of activities (e.g. production,human resource management, sales, logistics, etc.),whereas, in the latter case, relocation is typically limitedto specic production phases (e.g. labour intensive ones).

2.2.3. Relation 3: commitment decisionsforeign country

knowledge

Country knowledge is largely inuenced by the currentbusiness activities carried out in the foreign country. Currentbusiness activities are indeed the prime source of both rmand market experiential knowledge (Johanson and Vahlne,1977; Eriksson et al., 1997). As Johanson and Vahlne (1977)point out, experience can be gained through the hiring ofexperienced personnel, or through strong interactions withpersons who have experience. Thus, a rm with a foreignmanufacturing unit will accumulate more experiential knowl-edge about the foreign country than a rm that operates onlythrough independent subcontractors.

2.2.4. Relation 4: foreign country knowledgecommitment

decisions

The increment of foreign country knowledge inuencesalso the current commitment decisions (how and what), thatare made in response to perceived problems and/oropportunities on the foreign market. As foreign countryknowledge improves, the rm is greatly able to detectopportunities and/or problems, and therefore to reduce theuncertainty of going abroad (Eriksson et al., 1997). Theconcept of psychic distance between countries helps toexplain this relation (Johanson and Wiedersheim-Paul,1975; Johanson and Vahlne, 1977). According to Johansonand Vahlne (1977), psychic distance is dened as the sum offactors preventing the ow of information from and to themarket. Examples are differences in language, education,business practices, culture and industrial development. Asa rm experiences that psychic distance between home andthe foreign country is low, it is in a favourable condition todecide to increase the resources committed to the foreignoperations. Also the characteristics of the knowledge

A. Camuffo et al. / Journal of Purchasing138needed to run foreign operations inuence the commitmentdecisions (Kogut and Zander, 1993; Vermeulen andBoth these aspects are underinvestigated in internationalbusiness literature, but we believe they are crucial inunderstanding the actual processes of supply networkinternationalisation.

3. Research methodology

To develop theoretical and managerial insights into theresearched issue, we employed a qualitative research designinvolving nine case studies. Indeed, the multiple case studyapproach is particularly appropriate when the researchquestion focuses on why/how observed phenomenaoccur, and when there is no control over behaviouralevents (Yin, 1984). Moreover, as noted by Handeld andMelynk (1998), a multiple case study offers the possibilityto provide in-depth understanding when the research aimregards the identication of the patterns that link variables,as in the case of this paper.As usual in case study research (Meredith, 1998), the

choice of the research sample was not random (random orstatistical sampling) but theoretical (theoretical sampling).To pursue the research objective avoiding bias effects, weselected and analysed case studies of Italian companies all

locprwhys, hows and whats of supply network internatio-nalisation;to consider the impact of the business network contexton the commitment decisions of the internationalisingrm.Barkema, 2002). The results of the study of Kogut andZander (1993) support the hypothesis that the more tacitthe knowledge is, the more likely it will be transferred to awholly owned subsidiary.

2.2.5. Relation 5: business network contextcommitment

decisions

Blankenburg et al. (1996) argue that a business relation-ship in a foreign market should not be considered inisolation from the rest of the supply network of the rm.Thus, under this perspective, foreign market entry is aprocess in which the entrant rm develops new relation-ships with partners in the foreign country and coordinatesits connected supply network within the new relationships(Blankenburg et al., 1996, p. 1049). In this view, having anestablished national supply network composed by partnerswilling and able to follow the focal rm abroad, mayfunction as an enabler for the focal rm to make directinvestment in the foreign country. Hence, in our frame-work, the ongoing context of the supply network in whichthe focal rm is engaged, inuences the commitmentdecisions of the focal rm itself.On the whole, our conceptual framework allows us:

to frame the process of supply network internationalisa-tion taking into account the dynamic links among the

Supply Management 12 (2006) 135147ated in the North East of Italy, involved in relocatingoduction to the same foreign country (i.e. Romania), and

competing in similar industries (i.e. footwear and apparelindustries).The theoretical framework discussed above has been

applied to analyse and compare the case studies. Table 1reports the proles of the analysed rms.We conducted company visits and interviews between

1999 and 2004. This large temporal interval made itpossible to test the dynamic relations between theconstructs investigated in the research (Pettigrew, 1990).While conducting interviews, we sought to collect theopinions of various individuals (i.e. CEO, operations andsupply chain managers, and sales managers) to avoid datadistortion by the informants. To ensure research reliability,we sought data triangulation by gathering the same pieceof information from different sources: semi-structuredinterviews, internal documents and direct observations(e.g. manufacturing activities, ongoing organisation, actuallocalisation of some suppliers). Interviews were conductedby groups of 23 interviewers and were recorded andtranscribed for analysis.As suggested by Ellram (1996) and Voss et al. (2002), to

gather information a semi-structured interview guide hasbeen developed upon a common case study protocol basedon the conceptual framework, and on discussions withseveral operations managers of rms involved in the study(Box 1).

4. The whys, hows and whats of supply networkinternationalisation in Romania

4.1. Why supply network internationalisation in Romania

The main internationalisation driver that induces Italianrms to move part or all of their production processes toRomania is labour cost, which is much lower than in Italy.The average wage paid to a Romanian worker in theindustries analysed is approximately one-tenth the averagewage of an Italian worker. Interviews report that produc-tivity is about 0.7 times that in Italy. From this standpoint,Romania is very attractive. For example, the knitwearcompany Firm A reduced its labour costs by 2030% byrelocating to Romania. However, labour costs in Romaniaare rising (an ordinary worker costs 300 euro per month, aforeman costs 600 euro per month) and this is especiallytrue for the activities that require particular skills. Severalof the Firm F managers who were interviewed said that,even in Romania, it was getting difcult to hire specialists,and this problem was being accentuated by high turnoverrates (about 40%), a sign of poor company loyalty.According to operators, the most cost-effective time forrelocating production to Romania has already come andgone, and scholars estimate that the basic trend in the longterm will reach a productivity/labour cost ratio that is

ARTICLE IN PRESS

sing

ome

g, a

ome

ni

ns

om

o-or

toty

ont

, ma

toty

g th

sing

nis

sing

nis

sing

A. Camuffo et al. / Journal of Purchasing & Supply Management 12 (2006) 135147 139Table 1

The case studies

Case Activities in Italy

Firm A: small knitwear manufacturer All the design, purcha

commercial activities

Firm B: small shoe manufacturer Collection design, cust

cutting, edging/stitchin

and renishing

Firm C: small womens shoe manufacturer Collection design, cust

cutting, assembly and

Firm D: small shoe manufacturer Designing for collectio

trademark (15%), cust

purchasing, logistics c

control, nal assembly

Firm E: large shoe manufacturer Collection design, pro

management, quality c

logistics co-ordination

Firm F: large shoe and sports clothing

manufacturer

Collection design, pro

management, preparin

for the moulds

Firm G: large casual clothing manufacturer All the design, purcha

cutting, tailoring and

activities

Firm H: large casual clothing manufacturer All the design, purcha

cutting, tailoring and

activities

Firm I: large footwear and sports clothing

manufacturer

All the design, purcha

commercial activitiesEdging and stitching are m

on a reduced scaleActivities in Romania

, production, and Horizontal relocation of a low-end of market

product line

r order management,

ssembly, nishing

Vertical relocation of the labour intensive

phases (edging and stitching)about 60% of

the total production volume

r order management,

shing

Vertical relocation of the labour intensive

phases (edging and stitching)about 50% of

the total production volume

sold under its own

er order management,

dination, quality

Vertical relocation of the labour intensive

phases of cutting, edging/stitching, and initial

assembly

ping, customer order

rol, purchasing,

rketing and sales

No domestic production/assembly (i.e. the

nished product is imported)about 40% of

the total production volume in Romania

ping, customer order

e wooden maquette

Relocation of all production phasesabout

35% of the total production volume in

Romania

, production (except

hing) and commercial

Vertical relocation of the labour intensive

phases (cutting, tailoring and nishing)about

50% of the total production volume

, production (except

hing) and commercial

Vertical relocation of the labour intensive

phases (cutting, tailoring and nishing)about

70% of the total production volume

, production and Vertical relocation of the labour intensive

phases (edging and stitching) to specialist

Romanian manufacturersaintained in-house

ARTICLE IN PRESS&equal to the Italians one, in coherence with the well-known

Box 1Case study protocol

A. Camuffo et al. / Journal of Purchasing140factor price equalisation principle (Thurow, 1992). Conse-quently, relocating production to Romania will bring everlower advantages in terms of cost reduction.The problem lies in trying to identify when this will come

about, considering that the increase in Romanian produc-tivity, which is currently close to the Italians one, isslowing down, while wages are still far lower. Practitionersestimate that this process will take approximately 810years. However, it also depends largely on the speed withwhich labour costs adapt. It is important to note that theRomanian labour market varies in accordance withgeographical area, (i.e. from region to region), sector(some traditional manufacturing activities have higher thanaverage productivity), and time (the areas that havereceived the most foreign investments have improved thequality of their labour over the years).Though labour costs are undoubtedly the main reason

that encourages businesses to invest in Romania, they areby no means the only driver.All the rms studied are aware that it is no longer

enough to excel in a single performance dimension to becompetitive. Firms have to be efcient as well as good atstyling, deliver on time, produce quality goods, etc. Thesatisfactory quality results are often due to local labourwith special skills in handicraft activities, such as tanning,fabric manufacture and stitching. Relocating strategies areoften focused on seeking these skills, which are decisive inchoosing to locate production centres in Romania. Theseconsiderations are even more important if applied toItalian apparel and footwear industries, as in such sectors

Supply Management 12 (2006) 135147fast cycle times (production, delivery, reorder), quality (rawmaterials, manufacture and nished products) and ex-ibility (volume and mix) are key competitive factors (Forzaet al., 2000).The decision to relocate requires considering the overall

performance. Indeed, in all cases, reductions in labourcosts were accompanied by satisfactory performance interms of quality and productivity, in some cases, deemed tobe excellent and comparable to Italian levels. Interestinglyenough, many businessmen were surprised by the level ofskills and training that they found in workers doing themore qualied jobs, not to mention the ease and the speedwith which workers adapt.Some rms relocate because the work carried out in

Romania could not be done in the home country, especiallythe North East of Italy, where the territory is saturated andfull employment makes it difcult to nd the some skills.The footwear manufacturer Firm C is planning additionalrelocation to Romania by externalising some of theactivities that are currently carried out internally (i.e.cutting) as soon as the required skills can be found in loco.It seems that the contextual conditions in Romania

enable rms to pursue their strategies effectively, beyondcost leadership. With a population of about 23 millionpeople, Romania is the second largest country in EasternEurope. Thus, despite the consumers low purchasingpower, the Romanian market is very promising. Conse-quently, it is important for rms to be established there tobe ready when this turns into something more concrete.

Fovia

driEato

isLaRotoItalocmade

inthareg

4.2

ARTICLE IN PRESS&Indeed, rms implement a variety of ways to internationa-lise their supply network. Several choose to use indepen-dent sub-contractors (see Firm F, Firm G and Firm H),in contrast to others that prefer direct investment (seeFirm F).When compared with FDIs, supply agreements with sub-

contractors has been chosen because of the followingconsiderations:

Productivity is less important. The Italian rm makes anagreement for a certain type of manufacture with theRomanian rms, which is paid a set price. Conse-quently, once the payment has been xed, attentionturns towards delivery times. The number of workersrequired or the production technology employed are ofsecondary importance.

The cost of employee training and investments inmachinery are greatly reduced, because the rms withsuitable technology and labour are chosen during thesub-contractor selection phase. In some cases, (e.g. FirmA and Firm E) the Italian rm may develop technolo-gical investment plans, supply some machinery, or dealwith some repairs or adjustments. However, theresources that are invested are still much lower thanthose required by a production unit owned by the rm.

Divestment costs related to external subcontractingrelationships are lower than those related to FDIs thusreducing the risks associated with the uncertainty offoreign countrys environment.

Production exibility is greater; for example, Firm Gcommissions Romanian rms to produce small batches,achieving a cost-effectiveness that could not be obtainedNt have relocated, have indeed developed their businessthe areas (like Timisoara, Arad, Cluj-Napoca and Bihor)t characterised by a high psychic closeness with Italianions.

. How supply network internationalisation in Romania

o preferred entry modes emerge from the case studies.thaFinally, the psychic distance plays an important role. Itworth to remind that both Romanian and Italian aretin languages, and have a lot in afnity. To some extent,mania seems less foreign than other countries whereinternationalise production in terms of economy too.lian rms show a strong tendency to concentrateation in certain areas of Romania, because theyintain the network relationships that have already beenveloped in the home region. The majority of Italian rmsMoreover, Romanias geographical position is anotherver that attracts investments. Located at the heart ofstern Europe, it is an excellent springboard from whichexpand into even bigger markets, such as Russia.r instance, Firm F, Firm G and Firm H nd Romaniable as a potential future market outlet.

A. Camuffo et al. / Journal of Purchasingby FDI that requires sufciently high volumes ofproduction to breakeven.activities in-house. The production cycle in the footwearInterestingly enough, interviews conrm that thechoice of the appropriate entry modes mostly depends onthe reasons that drive a rm to internationalisee.g.nding more cost-effective supply sources, offering aforeign market a better service, looking abroad forskills that are difcult to nd at home. Firm F hascreated a large and sophisticated factory in Romania(Timisoara). This decision can be explained by thewillingness of the management to maintain a high controlover the manufacturing and logistics operations in one ofthe market with the highest growth potentialities amongEuropean markets.The entry mode also depends on the need to congure

robust and consistent processes and, hence, on the need toget access, in an appropriate way, to the requiredcapabilities. Indeed, the cases studied highlight twoapproaches used by companies to minimise the risk ofloosing knowledge and core competencies: (1) keeping in-housealthough on a lesser scalesome of the processesthat are externalised/relocated to not disperse the know-how, and to reduce the amount of incorrect informationbeing received by third-parties and suppliers, (2) makingdirect investments abroad to keep direct control over thekey processes, and hence reduce information asymmetriesand opportunism of foreign partners. For example, makingin-house 15% of its total production, the knitwearmanufacturer Firm A still controls the entire productionprocess. The footwear-manufacturer Firm I does exactlythe same. Moreover, in several analysed cases (i.e. Firm E,Firm F, Firm G), direct investments had been made tocreate, purchase, and/or update the technology used byproduction units in Romania.Finally, internationalising production in Romania seems

to be not only the result of strategies by individual rms,but rather of processes that involve the local networksystems. For example, Firm F relocates the whole supplysystem abroad, and this creates an extension of the Italian-based supply network system in Romania. The typicalcharacteristics of the Italian industrial districtsthe co-existence of inter-rm competition and collaboration andthe close supplier-customer relationshipsare recreatedabroad.

4.3. What remains in Italy and what goes to Romania

Apart from choosing the most appropriate entry mode,internationalisation also forces rms to decide whatprocesses/activities/segments of the supply chain theyshould oversee directly and what they could or shouldentrust to foreign partners of suppliers.The footwear cases (Firm B, Firm C, Firm D, Firm E,

Firm F, Firm I) show that rms very rarely outsource all theproduction processes, but always keep the most critical

sectors takes place in a series of steps/activities (cutting,

Supply Management 12 (2006) 135147 141edging, stitching, etc.) in each of which the advantagesoffered by decentralisation differ.

Still today cutting is considered to be strategically veryimportant both for the nal quality of the shoe and becauseusing skilled cutters reduces wastage of raw materials (thedifference in the amount of leather used between a skilledand an inexpert cutter can be as high as 15%). The cuttermust know the different types of leather he/she is about tocut, which part of the shoe or boot will be made with itand, lastly, how to minimise off-cuts. For example, theparts that will be used for the vamp (front of the shoe) mustbe cut from the most suitable part of the skin. Furtherdifculties may arise in this phase because of differences ofshade and colour both in the same skin and between oneskin and another.In the phase of edging and stitching, the lined and

nished vamp is obtained. This is the phase that is mostoften decentralised, because it is difcult to automate theseprocesses and the production technology required is, atmost, a simple stitching machine. The assembly phasehinges upon a large number of parts supplied by specialisedproducers. Thanks to high levels of automation (i.e. electricconveyor belts), this is usually carried out internally, but attimes rms do adopt a mixed strategy, buying in nishedsoles which are then attached to the uppers or vamps.Lastly, there are the phases of nishing and re-nishing

when accessories are added, shoes are brushed andpolished and any defects are put right. Because the rm

In conclusion, the characteristics of the activities to berun into foreign operations seems to have a great impact onthe choice of what segments of the value chain to relocateto independent sub-contractors.

5. Processes of supply network internationalisation

Using the longitudinal information on the case studies,we rst traced the stages of each internationalisationprocess. Looking for cross-case patterns (Voss et al., 2002),we then associated the cases that followed similar stages.Finally, in the light of our conceptual framework and usingthe information gathered by the interviews, we explainedthe relationships among the stages of each process.Figs. 24 represent the dynamics of the three processesthat emerged from the cross-case analysis.

5.1. Process 1traditional subcontracting

Although the choices that Firm A, Firm B, Firm C, FirmD and Firm I made to relocate production to Romania aredifferent, some cross-case patterns emerged by analysingthem in the light of our conceptual framework (Fig. 2).Box 2 provides a typical illustration of the traditionalsubcontracting internationalisation process.In the ve cases above, the supply network internatio-

ARTICLE IN PRESS

bco

Bu

A. Camuffo et al. / Journal of Purchasing & Supply Management 12 (2006) 135147142needs to maintain direct control over the nished productsthese nal phases are rarely externalised.

Low labour cost

Internationalizationdrivers (Why)

Market relationshipswith Romanian

suppliers

How

What

Non-strategicactivities

su

2 3

Commitment decisionsFig. 2. The stages of traditionnalisation process starts through the development of armslength relationships with Romanian subcontractors to take

More knowledge onlocal supply system

Foreign countryknowledge

Low labour costLocal subcontractorscapabilities

Internationalizationdrivers (Why)

Strongerrelationships with

Romanian suppliers

How

What

Non-strategicactivitiesRomanian

ntractors networks

siness networkcontext

4

1

2

5

Commitment decisionsal subcontracting process.

ARTICLE IN PRESS

Low labour costsRomania as a profitable market

Internationalizationdrivers (Why)

Totally owned smallproduction unitLocal subcontractorsnetwork withRomanian suppliers

How

What

Non-strategicactivities

More knowledge onlocal supply system

Foreign countryknowledge

Low labour costsRomania as a profitable marketLocal subcontractorscapabilities

Internationalizationdrivers (Why)

Totally owned smallproduction unitLocal subcontractorsnetwork withRomanian suppliers

How

What

Non-strategic activitiesStrategic activitiesRomanian

subcontractors networks

Business networkcontext

2

4

13

2

5

Commitment decisions

Commitment decisions

Fig. 3. The stages of co-ordinated subcontracting process.

Low labour costsRomania as aprofitable market

Internationalizationdrivers (Why)

Totally owned largeproduction unit

How

What

Non strategic activitiesStrategic activities

More knowledge onlocal market

Foreign countryknowledge

Low labo ur costsRomania as a profitable market

Internationalizationdrivers (Why)

Totally owned largeproduction unitLocal subcontractorsnetwork with Italiansuppliers

How

What

Non strategic activitiesStrategic activitiesItalian

subcontractors network

Business networkcontext

2

4

13

2

5

Commitment decisions

Commitment decisions

Fig. 4. The stages of supply system relocation process.

A. Camuffo et al. / Journal of Purchasing & Supply Management 12 (2006) 135147 143

ARTICLE IN PRESS&advantage of low labour costs (relation 2). The productionactivities entrusted to Romanian suppliers are only non-strategic ones (e.g. edging and stitching in the footwearindustry) whose management requires highly standardisedand transferable knowledge. As this international sourcingproceeds, the focal rm acquires new knowledge about theskills and levels of training of the local labour market. Inother words, the ongoing international activities contributeto increase rms knowledge about Romanian businessenvironment (relation 3). Indeed, labour cost reduction isusually accompanied by satisfactory performance in termsof quality and productivity rates that, in many cases, arecomparable to the Italian ones. This, given the current skillshortage in the Italian labour market, leads the focal rmto change the entry mode starting to develop strongerrelationships with foreign suppliers (e.g. licence or long-

Box 2Traditional subcontracting: Firm D

A. Camuffo et al. / Journal of Purchasing144term supply agreement). Thus, the development of foreigncountry knowledge inuences both the internationalisationdrivers and the commitment decisions (relations 1 and 4).Finally, the psychic closeness between Italian rms andRomania subcontractors as well as the ourishing offootwear and apparel Romanian sub-contractor networkscreate the favourable conditions for developing foreignsubcontracting relationships (relation 5).

5.2. Process 2co-ordinated subcontracting

Firm E, Firm G and Firm H follow a different process ofinternationalisation (Fig. 3). Box 3 summarises two ofthese cases.These companies seem to have increasingly abandoned

domestic sub-contractors, entrusting production to foreigncounterparts that can be tightly controlled. All thesecompanies set up small, but wholly owned, plants inRomania. These units mission is to co-ordinate andcontrol the Romanian sub-contractors whose operationsare not strategic.The higher market commitment, as compared to process1, is due to the exploration process that occurs overtime. Infact, beyond the obvious advantage of low labour cost,these rms from the beginning of the internationalisationprocess consider Romania as a growing and protablemarket for their nal products, and as a springboard forother markets. These internationalisation driver leads thecompanies to choose entry modes characterised by a highdegree of control over the production activities (relation 2).International business activities become a valuable sourceof experience, and this enhances focal rms knowledgeabout Romanian local market (relation 3). This learningprocess leads the focal rms to appreciate the capabilitiesof Romanian supply system (relation 1) and to increasemanufacturing activities entrusted to Romanian subcon-tractors. Coherently, focal rms start to outsource also

Supply Management 12 (2006) 135147important and strategic activities, such us cutting andnishing, to Romanian subcontractors (relation 4). Theknowledge to run these activities is scarcely codiable andhard to transfer. As in the previous case the psychiccloseness between Italy and Romania, and the presence ofcapable sub-contractor networks create a favourableatmosphere to further develop subcontracting relationships(relation 5).

5.3. Process 3supply system relocation

Box 4 gives some information about Firm Fs inter-nationalisation. The internationalisation process followedby this rm is different both from the rst and from thesecond process (Fig. 4).On one hand, the rm quickly achieves a high market

commitment, and, on the other hand, the role played by theinternational supply network context is peculiar.While the reasons that lead the rm to internationalise

(relation 2) its supply network are similar to those of theprevious process (i.e. low labour cost and the potentiality

ARTICLE IN PRESS&Box 3Co-ordinated subcontracting: Firm G and Firm H

Box 4Supply system relocation: Firm F

A. Camuffo et al. / Journal of Purchasingof the local market), from the beginning of its upstreamsupply network internationalisation process Firm F estab-lishes a totally owned large production unit that carries outalmost all the production activities. This large investmentincreases the focal rms foreign country knowledge(relation 3) leading to a reinforcement of both the reasonsof internationalising (relation 1) and the commitment forits foreign investment (relation 4).However the focal rm does not establish relationships

with local subcontractors, but it maintains the relationshipswith its Italian subcontractors. During the years, the rmde facto develops a mini footwear industrial district,attracting various Italian suppliers who locate theirproduction units around the plant of the focal rm. TheseItalian suppliers specialise in single stages of the manu-facturing process, such as cutting or assembly. Firm F,therefore, recreates its Italian supply system abroad,becoming the focal rm that coordinates and developsthe local supplier network. We argue that the success andthe pace of the internationalisation process are affected bythe characteristics of the focal rms business network(relation 5). First of all, Firm Fs Italian suppliers have thesize and capabilities to internationalise their productionfacilities. Secondly, the suppliers are tightly bound by anetwork of informal relationships that have been devel-oped within the North Eastern Italian footwear. TheseSupply Management 12 (2006) 135147 145relationships support the coordination among the suppliersand make possible for the focal rm to recreate abroad thesupply system network as a whole. In this process, the focalrm operates as a real central rm (Lorenzoni andBalden-Fuller, 1995) that develops and coordinates thelocal supply network, diffusing its generative rules (Kogut,2000).

6. Discussion

6.1. Research implications: adapting and extending the

Uppsala internationalisation model

Our ndings conrm the results of the Uppsala modelwhich explains internationalisation as an incrementalprocess of experiential knowledge. Experiential knowledgeof local market, customers, supply sources, problems andopportunities abroad is accumulated by operating abroad(Johanson and Wiedersheim-Paul, 1975; Johanson andVahlne, 1977; Erramilli, 1991; Eriksson et al., 1997;Vermeulen and Barkema, 2002).Moreover, we complement Johanson and Vahlnes

model analysing the underlying dynamics of supplynetwork internationalisation. We explicitly take intoaccount the whys, hows and whats of supply networkinternationalisation. The analysis shows that these three

ARTICLE IN PRESS&dimensions dynamically affect each other. The reasons (i.e.why) of supply internationalisation inuence the commit-ment decisions (i.e. how and what). Since the how and whatdecisions determine how international activities are actu-ally organised, they affect the amount of experientialknowledge the internationalising rm can acquire aboutthe foreign market (Eriksson et al., 1997). This, in turn,lights up new opportunities and inuences the reasons ofthe internationalisation process.Our study also extends the Uppsala model adding a new

variable: the rms business network. Each new potentialrelationship with a foreign counterpart is to be positionedin the existing international supply network, therefore itsdevelopment is contingent on the willingness and ability ofpartners to coordinate the new relationship with thesurrounding supply network (Anderson et al., 1994;Blankenburg et al., 1996). The case studies show severaleffects of the international business network context on theinternationalisation process of the focal rm. First, thefocal rm starts to internationalise when the domesticsupply network is no longer able to efciently provideresources, if compared with other foreign supply networkscharacterized by other comparative advantage (Porter,1990; Shan and Hamilton, 1991). Secondly, the character-istics and the capabilities of the domestic suppliers, alongwith their network identity (Hakansson and Johanson,1988), affect the willingness and the ability of the focal rmto widen its local supply network abroad. Thirdly, thecontext of the foreign supply networks (e.g. the presence inthe foreign country of well-established networks ofsubcontractors) impact on the development of interna-tional business relationships. Finally, our ndings alsoshow how a rm position itself in the supply networkbefore internationalisation has consequences on itssubsequent internationalisation process (Johanson andMattsson, 1988; Lorenzoni and Balden-Fuller, 1995;Lipparini and Lorenzoni, 1999). Firms that traditionallyentrust production to local domestic suppliers, tend toreplicate this model abroad. Vice-versa, vertical integratedrms tend to develop forms of internationalisation thatenable them to maintain closer control over operations.Finally, the three upstream supply network internatio-

nalisation processes we found (traditional subcontracting,co-ordinated subcontracting and supply system relocation)are consistent with the critiques to the Uppsala model ofbeing deterministic (Reid, 1983; Rosson, 1987; Johansonand Vahlne, 1990).

6.2. Managerial implications: supply network

internationalisation process and competitive advantage

The managerial implications of this study regard theeffects of internationalisation on the sustainability of rmscompetitive advantage.In traditional subcontracting, the focal rm develops

A. Camuffo et al. / Journal of Purchasing146dyadic international relationships with foreign subcontrac-tors, outsourcing only non-strategic production phases,whose management requires highly standardised andtransferable knowledge.Although this process is common among Italian foot-

wear and apparel rms, it does not provide a sustainablecompetitive advantage because it is easily imitable bycompetitors who can easily access the same resources.Instead, the co-ordinated subcontracting process pro-

vides focal rms with a more sustainable competitiveadvantage, because of the more complex nature of theknowledge involved. However, during the last years, thedegree of sustainability of this competitive advantage hasdecreased. Relocating production according to this processhas become increasingly difcult because of lack of thirdparty production capacity, price hikes and intense compe-tition on local sourcing among focal rms.The supply system relocation process provides the most

robust source of competitive advantage. As suggested byBartmess and Cerny (1993), this process fosters thedevelopment of idiosyncratic capabilities and relationshipsthat are difcult to replicate.

7. Conclusion

This article analyses the process that dynamically linksthe whys, hows and whats of upstream supply networkinternationalisation. The dynamics of this process areunder-investigated. In fact most of the studies adopt astatic approach and mainly address downstream supplynetwork internationalisation.We propose a conceptual framework that adapts and

extends the Uppsala model and apply it by analysing ninecase studies of Italian footwear and apparel companiesinvolved in relocating some segments of their supplynetworks to Romania. Our cross-case analysis identiesthree different processes of supply network internationali-sation: (1) traditional subcontracting, (2) co-ordinatedsubcontracting, and (3) supply system relocation.Besides the need to test the model on larger samples,

other opportunities for future research deriving from thisstudy regard: (a) how focal rms business networkcontexts contribute shaping internationalisation processes(e.g. customer-supplier interaction), (b) how foreigncountry knowledge can be articulated in its technological,market, nancial and human resource components and (c)how the model works in different industry settings.

References

Akkermans, H., Bogerd, P., Vos, B., 1999. Virtuous and vicious cycles on

the road towards international supply chain management. Interna-

tional Journal of Operations & Production Management 19 (5/6),

565581.

Anderson, J.C., Hakansson, H., Johanson, J., 1994. Dyadic business

relationships within a business network context. Journal of Marketing

58, 115.

Bartmess, A., Cerny, K., 1993. Building competitive advantage through a

Supply Management 12 (2006) 135147global network of capabilities. California Management Review

Winter, 78103.

ARTICLE IN PRESSA. Camuffo et al. / Journal of Purchasing & Supply Management 12 (2006) 135147 147Bello, D.C., Barksdale, H.C., 1986. Exporting at industrial trade shows.

Industrial Marketing Management 15 (3), 1972006.

Bilkley, W., Tesar, G., 1977. The export behavior of smaller sized

wisconsin manufacturing rms. Journal of International Business

Studies 8 (1), 9398.

Blankenburg, D., Eriksson, K., Johanson, J., 1996. Business networks and

cooperation in international business relationships. Journal of Inter-

national Business Studies 27 (5), 10331053.

Camuffo, A., Romano, P., Vinelli, A., 2004. Report on the Textile and

Apparel Industry in Italy. Department of Management and Engineer-

ing, Working Papers, University of Padova, Padova.

Cyert, R., March, J., 1963. A Behavioral Theory of the Firm. Prentice-

Hall, Englewood Cliffs.

Dornier, P., Ernst, R., Fender, M., Kouvelis, P., 1998. Global Operations

and Logistics: Text and Cases. Wiley, New York.

Douglas, S., Craig, S., 1995. Global Marketing Strategy. McGraw-Hill,

New York.

Dunning, J., 1988. The eclectic paradigm of international production: a

restatement and come possible extensions. Journal of Business Studies

19 (1), 131.

Ellram, L.M., 1996. The use of the case study method in logistics research.

Journal of Business Logistics 17 (2), 93138.

Eriksson, K., Johanson, J., Maikgard, A., Sharma, D.D., 1997.

Experiential knowledge and cost in the internationalisation process.

Journal of International Business Studies 28 (2), 337360.

Erramilli, M.K., 1991. The experience factor in foreign market entry mode

by service rms: role of market knowledge. Management International

Review 30 (2), 135150.

Forza, C., Romano, P., Vinelli, A., 2000. Information technology for

managing the textile apparel chain. Current use, shortcomings and

development directions. International Journal of Logistics: Research

and Applications 3 (3), 227243.

Gatignon, H., Anderson, E., 1988. The multinational corporations degree

of control over foreign subsidiaries: an empirical test of transaction

cost explanation. Journal of Law, Economics, and Organization 4 (2),

305335.

Geref, G., 1999. International trade and industrial upgrading in the

apparel commodity chain. Journal of International Economics 48 (1),

3772.

Hakansson, H., Johanson, J., 1988. Formal and informal cooperation

strategies in international industrial networks. In: Contractor, F.J.,

Lorange, P. (Eds.), Cooperative Strategies in International Business.

Lexington Books, Lexington, pp. 369379.

Handeld, R.B., Melynk, S.A., 1998. The scientic theory-building

process: a primer using the case of TQM. Journal of Operations

Management 16 (4), 321339.

Harzing, A.W., 2002. Acquisitions versus greeneld investments: interna-

tional strategy and management of entry modes. Strategic Manage-

ment Journal March 23 (3), 211227.

ISTAT, 2004. LItalia nellEconomia Internazionale (Italy in the Interna-

tional Economy). Rapporto ICE 20032004.

Johanson, J.U., Mattsson, L.G., 1988. Internationalisation in industrial

systems: a network approach. In: Hood, N., Vahlne, J.E. (Eds.),

Strategies in Global Competition. Croom Helm, New York, pp. 198211.

Johanson, J.U., Nonaka, I., 1983. Japanese export marketing: structure,

strategies, counterstrategies. International Marketing Review 1 (2),

1225.

Johanson, J.U., Vahlne, J.E., 1977. The Internationalisation process of the

rma model of knowledge development and increasing foreign market

commitments. Journal of International Business Studies 8 (1), 305322.

Johanson, J.U., Vahlne, J.E., 1990. The mechanisms of internationalisa-

tion. International Marketing Review 7 (4), 1124.

Johanson, J.U., Wiedersheim-Paul, F., 1975. The Internationalisation of

the rmfour Swedish cases. Journal of Management Studies 12 (3),

305322.Klassen, R.D., Whybark, D.C., 1994. Barriers to management of

international operations. Journal of Operations Management 11,

385396.

Kogut, B., 1985. Designing global strategies: proting from operational

exibility. Sloan Management Review 27, 2738.

Kogut, B., 2000. The network as knowledge: generative rules and the

emergence of structure. Strategic Management Journal 21 (3),

405425.

Kogut, B., Zander, U., 1993. Knowledge of the rm and the evolutionary

theory of the multinational corporation. Journal of International

Business Studies 24 (4), 625645.

Linqvist M., 1988. Internationalisation process of small technology based

rmsthree illustrative case studies on Swedish rms. Research Paper

88/15, Institute of International Business, Stockholm School of

Economics.

Lipparini, A., Lorenzoni, G., 1999. The leveraging of interrm relation-

ships as a distinctive organizational capability: a longitudinal study.

Strategic Management Journal 20 (4), 317338.

Lorenzoni, G., Balden-Fuller, C., 1995. Creating a strategic center to

manage a web of partners. California Management Review 37 (3),

146163.

March, J.G., 1991. Exploration and exploitation in organisational

learning. Organizations Science 2 (1), 7187.

Meredith, J., 1998. Building operations management theory through

case and eld research. Journal of Operations Management 16 (4),

441454.

Pettigrew, A.M., 1990. Longitudinal eld research on change: theory and

practice. Organizations Science 1 (3), 267292.

Porter, M.E., 1990. The Competitive Advantage of Nations. The Free

Press, New York.

Reid, S., 1983. Firm internationalization. Transaction costs and strategic

choice. International Marketing Review 1 (2), 4456.

Rosson, P.J., 1987. The overseas distributor method: performance and

change in a Harsh environment. In: Reid, S., Rosson, P. (Eds.),

Managing Export Entry and Expansion. Praeger, New York.

Rugman, A.M., Lecraw, D., Booth, L., 1985. International Business. Firm

and Environment. Irwin McGraw Hill, New York.

Schmitz, H., Knorringa, P., 1999. Learning from Global Buyers, IDS

Working Paper, 100. Institute of Development Studies, University of

Sussex, UK.

Schniederjans, M.J., Zuckweiler, K., 2004. A quantitative approach to the

outsourcing-insourcing decision in an international context manage-

ment decision, 42(8), 974986.

Shan, W., Hamilton, W., 1991. Country-specic advantage and interna-

tional cooperation. Strategic Management Journal 12 (6), 419432.

Simchi-Levi, D., Kaminsky, P., Simchi-Levi, E., 2000. Designing and

Managing the Supply Chain. Concepts, Strategies, and Case Studies.

Irwin McGraw-Hill, New York.

Staber, U.H., Schaefer, N.V., Sharma, B. (Eds.), 1996. Business Networks.

Prospects for Regional Development. Walter de Gruyter & Co., Berlin.

Thurow, L., 1992. Head to Head: The Coming Economic Battle Among

Japan, Europe, and America. Morrow & Co, New York.

Turnbull, P.W., 1987. A challenge to the stages theory of the

internationalization process. In: Reid, S., Rosson, P. (Eds.), Managing

Export Entry and Expansion. Praeger, New York.

Vermeulen, F., Barkema, H., 2002. Pace, rhythm, and scope: process

dependence in building a protable multinational corporation.

Strategic Management Journal 23 (7), 637653.

Voss, C., Tsikriktsis, N., Frohlich, M., 2002. Case research in operations

management. International Journal of Operations and Production

Management 22 (2), 195219.

Williamson, O.E., 1975. Market and Hierarchies: Analysis and Antitrust

Implications. The Free Press, New York.

Yin, R.K., 1984. Case Study Research: Design and Methods. Sage

Publications, Beverly Hills.

The process of supply network internationalisationIntroductionTheoretical backgroundInternationalisation of footwear and apparel supply networks: whys, hows and whatsThe conceptual frameworkRelation 1: foreign country knowledge--internationalisation driversRelation 2: internationalisation drivers--commitment decisionsRelation 3: commitment decisions--foreign country knowledgeRelation 4: foreign country knowledge--commitment decisionsRelation 5: business network context--commitment decisions

Research methodologyThe whys, hows and whats of supply network internationalisation in RomaniaWhy supply network internationalisation in RomaniaHow supply network internationalisation in RomaniaWhat remains in Italy and what goes to Romania

Processes of supply network internationalisationProcess 1--traditional subcontractingProcess 2--co-ordinated subcontractingProcess 3--supply system relocation

DiscussionResearch implications: adapting and extending the Uppsala internationalisation modelManagerial implications: supply network internationalisation process and competitive advantage

ConclusionReferences