Rethinking the Role of Large Trans-National First-Tier Suppliers in the Garments and Electronics Industry

The role of large trans-national first-tier suppliers in global value chains is changing. Rather than the conventional image of relatively powerless actors facing giant global brands, where the latter can play one supplier against the other and dominate the governance and value distribution in global value chains, large transnational first tier suppliers are emerging as powerful players in their own right. We observe this across different industries. First tier suppliers are not only exercising influence in the organizational management and governance of the global value chain but are also active in determining the geographical configurations and value capture that takes place further down the chains. Garments and electronics are two sectors where these trends are increasingly apparent. Understanding the growing influence of these large first tier suppliers is important given their ability to shape key outcomes within global value chains such as power relationships, labour conditions, environmental standards, and the overall map of global production. This paper discusses the changing role of large transnational suppliers in the two sectors and highlights implications for future research on global value chain governance.