Should private-label supply manufacturers invest in digital strategies? A study on Portuguese manufacturers

Abstract

The growth of private labels and digital marketing brings new challenges to manufacturers. However, within these challenges, manufacturers can discover strategic opportunities to uphold a competitive advantage in the market. This study considers two scarce topics in the literature: the private label business from a supplier’s perspective and the inclusion of the digital strategy in the B2B segment. Data collected from 203 manufacturers interviewed are tested against the research model using structural equation modelling. The results indicate that the digital strategy of the manufacturers influences their network capacity and the performance of the private label supply. Network capability also influences the performance of private labels. Digital strategy is a key element in the development of the private label supply business. Furthermore, the study mentions that companies with lower export levels tend to have less competence in private label performance. Consequently, the global presence of manufacturers has been acknowledged as a driving factor for the success of private brands, facilitating entry into international markets and expanding the customer base. The findings of this study have important practical implications for private label manufacturers.