Factor market rivalry is a foundational framework of supply chain management that explains competition for supply side resources and inputs within supply chains. The basic premise of factor market rivalry is that intense battles may result for necessary factors of production or service delivery when multiple parties need those factors and the factors are constrained in some way. The framework, rooted in both the resource-based view of the firm as well as competitive dynamics, clarifies firm and supply chain action in the face of intense battles for scarce resources. While negative outcomes are possible from extreme factor market rivalry actions, there are also potential competitive advantages which result for firms and supply chains that secure access to constrained factors. The current book chapter reviews the theoretical framework of factor market rivalry, establishes the paradigm as a general theory of supply chain management, and provides future research suggestions to scholars.
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