Strategic Positioning of the Emerging Third-Party Logistics Providers

Abstract: The dissertation deals with the so-called Third-Party logistics Provider (TPLP) with the purpose of explaining strategic positions of the emerging TPLPs. The development of Third-Party Logistics (TPL) can be said to have occurred during the last 15 - 20 years and have created a new kind of service, i.e. the management and execution of logistics process. These services have created a new market and consequently a new type of service provideris emerging. These service providers predominantly originate from traditional offerings in the logistics area, e.g.transportation and warehousing activities. However, previous works on TPL have neglected the provider's situation especially by not explicitly recognizing the shifts from single activity services to comprehensive and coordinated multiple activity offerings and from a functional support orientation to a process approach.Strategic positioning is an established perspective on strategy, but the use varies considerably. In this dissertation strategic positioning is connected to how TPLPs create value for their clients which links positioning to skills or capabilities. Furthermore, the position is regarded as a result of the fit between activities, resources and strategic positioning. This theoretical frame of reference, based on strategic positioning and value creation for service organizations, is new in the literature on TPL. The general methodological approach of the study is alternation between empirical findings and theoretical analyses in a stepwise pattern. Since the organizations studied had not been theoretically analyzed before, empirical observations were instrumental in describing the novel phenomena. The empirical foundation of the dissertation is two studies executed during 1996-7 and 1998-9. The first study contains 21 Australian, European, and North-American TPLPs. The second study is based on 53 European TPL buyers. Both studies used a combination of questionnaires and interviews for collecting data of both quantitative and qualitative character. The empirical analysis is best described as a qualitative approach supported by statistical techniques whenever possible.The dissertation presents a comprehensive empirical description of the current status and anticipated change of both the TPLPs and their customers. The main contribution of this dissertation is however: tools for describing TPLPs, a model of the value system that connects providers and buyers of TPL, and a position model for TPLPs. The conclusions of this dissertation include that the TPL industry shows signs of strategic differentiation along the two strategic dimensions operational vs. conceptual focus and range of activities. Of these two the operational vs. conceptual focus is strong enough to promote as a position model, with the main positions standard services and solutions. A hypothesis is proposed that states that the strategic position of the TPLPs depends on which set of value creation modes they use, which results in differences in the required capabilities, skills and resources. In short the standard service providers should focus on operations whereas the solution ones needs exceptional conceptual skills in analyzing logistics requirements and developing solutions. The results should however be considered as hypotheses due to the research design used and thus need further empirical testing which is suggested as important future research.