Sourcing Intelligence: The third intelligence for corporate strategy in the horizontal specialization era

Since the 1990s, fabless companies which have no manufacturing capability have emerged and grown in the electronics industry. Apple Inc., the most well-known fabless company, is considered to have enhanced its competitiveness with extraordinary marketing capability and excellent software technology focusing on customer usability. Its power of competitiveness, however, does not lie only in those capabilities. Apple has adopted cutting edge devices from device suppliers to develop hardware products such as iPhone which have captured consumers´ minds. It has also selected the most capable EMS to stably manufacture millions of products each month. In dealing with device suppliers and EMS, Apple controls them. Its sourcing power is also Apple´s critical capability. There have been many discussions about Market Intelligence (MI) since the 1970s, and Technology Intelligence (TI) since the 1980s. However, there has not been so much discussion about intelligence related to sourcing. This paper advocates “Sourcing Intelligence (SI)” as the third intelligence that supports sourcing power following MI and TI, and introduces its basic concept and examples of its practical use. Furthermore, the important role SI plays in corporate strategy is demonstrated.