The purpose of this paper is to develop an outsourcing matrix and explains how outsourcing can be used to facilitate strategic innovation.
The methodology used in this study is of an explanatory case study. This paper uses secondary data as well as primary data from several interviews with executives, entrepreneurs and industry experts. The combination of the two sources of data ensures a certain level of convergence and completeness in the analysis presented.
The approach suggested in this paper offers small and medium‐sized firms an opportunity to innovate strategically (i.e. creation of newer services and products) and potentially level the playing field with larger rivals.
This paper offers practicing managers a framework for using outsourcing as a means to compete effectively. Importantly, compared to the outsourcing literature's traditional focus on large firms, this paper is one of the few which takes the perspective of the small or medium sized firm. Additionally, this paper serves as a foundation for theory building and future research on the usage of outsourcing by such firms to enhance strategic competitiveness.
