Supply Chain Integration Capability, Intra-Cluster Co-Opetition Strategy, and Breakthrough Innovation: The Moderating Effect of Environmental Turbulence

Abstract

Under the frequent occurrence of external environmental risks and in the context of breakthrough innovations driving new quality productivity, this study explores the intrinsic mechanisms by which supply chain integration affects enterprise breakthrough innovation. Grounded in supply chain integration and breakthrough innovation theories, we used statistical methods to analyze data from a sample of 209 valid enterprises. The study systematically interprets these mechanisms from the perspective of competition and examines the moderating effect of external environmental turbulence on competitive strategy. The results demonstrate that supply chain integration capability significantly and positively influences breakthrough innovation, with vertical and horizontal competing strategies acting as mediators. Additionally, environmental turbulence positively moderates the relationship between supply chain integration capability and horizontal competing strategies. The results of the study are of great theoretical and practical significance in promoting the integration of enterprises’ supply chains and enhancing their sustainable innovation capabilities.

1. Introduction

Major public health events, natural disasters, regional wars, and global trade conflicts have caused severe disruptions to the global industrial and supply chains. These external shocks have significantly interfered with the conventional, incremental innovation processes and rhythms at the micro level of individual enterprises. In such an external risk environment, breakthrough innovation has emerged as a critical strategy for enterprises to survive and achieve leapfrog development. Breakthrough innovation depends not only on an enterprise’s internal resources and innovation foundation but also on the cooperation and competition among supply chain network participants under open conditions [1]. Consequently, the integration or even reconstruction of existing supply chain networks in the face of frequent external risks, along with the selection of appropriate competitive strategies, has become crucial for fostering breakthrough innovation. This approach represents an important pathway for the sustainable development of enterprises and the emergence of new quality productivity, especially in strategic emerging industries.

After half a century of globalization, Chinese enterprises have become deeply integrated into the global supply chain network. Large multinational enterprises, in particular, have achieved strategic objectives such as risk sharing, cost reduction and efficiency through market competition, joint R&D, and strategic alliances, thereby facilitating global expansion and sustained innovation [2]. However, the frequent occurrence of major global emergencies and the intensification of political and economic turbulence have continuously damaged or even deconstructed the original supply chain systems of Chinese enterprises. In this context, supply chain integration and intra-cluster co-opetition have become crucial for achieving breakthroughs in innovation and development. Therefore, exploring the intrinsic mechanisms of how enterprise supply chain integration capabilities drive breakthrough innovation, from the perspectives of competition and cooperation amid external environmental turbulence and increased demand for new quality productivity, holds significant theoretical and practical value.

Reviewing the literature, it is evident that research on supply chains has transitioned from traditional linear models to more complex concepts like supply chain ecosystems and networks [3]. Consequently, the scope of supply chain integration has expanded from vertical integration to encompass both vertical and horizontal dimensions. This evolution encourages enterprises to evaluate strategic choices for vertical and horizontal competition within industrial clusters, especially when facing external environmental shocks. By integrating resources within these clusters, enterprises can foster breakthrough innovation and mitigate the uncertainties associated with external risks, thus achieving leapfrog development. Despite this shift, empirical studies examining how supply chain integration capability influences breakthrough innovation are scarce. Most research focuses on the effects of supply chain network capabilities or characteristics on innovation performance. In reality, node enterprises within the supply chain network engage in a complex interplay of competitive and cooperative relationships, which are dynamically adjusted according to changes in time, space, and the external environment. Research on competitive relationships and strategic postures in strategic management predates similar studies in supply chain management. For example, Pieroni et al. (2024) sheds new light on the dynamic effects of inter-firm network agreements and competitive relationships [4]. Specifically, this integration capability improves vertical competition between upstream and downstream enterprises while simultaneously overcoming external obstacles, thereby enhancing horizontal competition among rival firms [5]. Competitive strategic relationships can effectively stimulate innovative behaviors and improve innovation performance in enterprises.

In summary, while previous studies have explored supply chain integration capability, competitive relationships within industrial clusters, and breakthrough innovation, they have not fully clarified the logical connections among these elements nor conducted empirical research on their theoretical interrelationships. This gap is particularly pressing in the context of frequent global emergencies and political and economic turbulence, where enterprises need effective supply chain integration to achieve breakthrough innovation and to mitigate high levels of uncertainty caused by external risks. To address this gap, this study constructs a theoretical model based on supply chain network theory and competitive strategy theory, following the classical management logic of “capability-strategy-performance”.

There are three key contributions of this study. Firstly, it clarifies theoretical logic: the study provides a clearer theoretical understanding of the relationships between supply chain integration capability, intra-cluster competitive strategies, and breakthrough innovation through theoretical deduction and model construction. Secondly, it reveals intrinsic mechanisms: the empirical analysis uncovers how supply chain integration capability affects breakthrough innovation under external environmental turbulence, thus expanding on previous research by focusing on the perspective of “competition”. Thirdly, it defines boundary conditions: the study further elucidates the boundary conditions for the effectiveness of competitive mechanisms, offering theoretical insights for enterprises to achieve breakthrough innovation amid environmental turbulence. This contributes to a deeper understanding of supply chain networks and breakthrough innovation.

2. Theoretical Analysis and Research Hypotheses

2.1. Supply Chain Network Integration

Traditional supply chain research primarily focuses on vertical relationships between upstream and downstream businesses. However, as business relationships have become more complex and diverse, supply chain research has evolved from linear chain logic to network-based analysis [4]. The supply chain network perspective not only examines these vertical relationships but also considers “horizontal relationships” with other network participants, such as competitors, financial systems, and other stakeholders. Supply chain integration, therefore, involves leveraging the existing value network. It centers on the core business supply chain while integrating and cross-fertilizing multiple value chains to optimize the overall value of the supply chain system.

Supply chain network integration fosters resource and capability complementarity by enhancing mutual trust and cooperation among firms. This integration not only improves explicit performance but also enriches information and knowledge, strengthens relationships, and facilitates skill interactions. As supply chain integration progresses, the mutual trust, commitment, and resource complementarity among network members enable enterprises to access a wider array of heterogeneous resources and information. This, in turn, promotes innovation throughout the supply chain network, particularly stimulating and generating breakthrough innovations [6]. As research into the importance of supply chains has deepened, supply chain network integration has emerged as a prominent research topic both domestically and internationally. However, how to effectively implement supply chain network integration and how it influences breakthrough innovation still require further investigation.

2.2. Strategies for Intra-Cluster Co-Opetition

The problem of intra-cluster competition has been studied earlier in the field of industrial economics, and economists tend to use game theoretic methods to analyze and deduce competing strategies. Ring and Van (1992) regarded competing strategy as a strategic state and game process in which firms compete and cooperate with each other, and use them in a balanced way in different business areas in order to maximize the overall benefits [7]. This approach contrasts with traditional competition strategies by focusing on the increased overall system benefits from cooperation, while also acknowledging that competition and cooperation coexist under varying conditions. The ultimate aim is to enhance the overall performance and value of the supply chain network system, rather than achieving pure cooperation or competition [8].

Previous research on competitive strategies has primarily examined their direct impact on enterprise performance, with limited focus on the intermediary mechanisms of these strategies. This paper addresses this gap by investigating how supply chain integration capability influences breakthrough innovation through competitive mechanisms.

2.3. Research Hypotheses

2.3.1. Supply Chain Integration Capability and Breakthrough Innovation

Supply chain integration involves cooperation between enterprises and node firms within the supply chain network to achieve specific strategic goals. This integration also encompasses collaborative relationships with competitors under certain conditions [9]. Typically, the primary goal of such cooperation and alliances within a supply chain network is to research and develop new technologies and markets, thereby enhancing the overall value of the supply chain ecosystem [10].

In the face of external risks or significant changes in the environment, routine or incremental innovation activities may be disrupted. Some enterprises may respond by pursuing breakthrough innovations to counter these risks or achieve leapfrog development [11]. For instance, the U.S. blockade on HUAWEI led to severe disruptions in its supply chain, including the “broken core” incident. In response, HUAWEI swiftly optimized its supply chain network, integrated resources within the cluster, and successfully launched the “HUAWEI HarmonyOS” and “Kirin Chipsets” through effective resource allocation and coordination. This case exemplifies how strong supply chain network integration can facilitate breakthrough innovations and contribute to leapfrog development.

Thus, enterprises with robust supply chain network integration capabilities are better positioned to achieve breakthrough innovations in risky environments. This not only supports the enterprise’s own innovation and development but also enhances the overall value of the entire supply chain network. Based on this, the following hypotheses are proposed:

H1. 

Supply chain network integration capabilities positively influence firms’ breakthrough innovation.

2.3.2. Supply Chain Integration Capabilities and Intra-Cluster Co-Opetition Strategies

According to Osarenkhoe (2010), competitive relationships within supply chains can be classified into vertical and horizontal competition [12]. Vertical competition involves the competitive and cooperative dynamics between upstream and downstream firms in the supply chain. In contrast, horizontal competition pertains to the competitive and cooperative interactions among firms, their competitors, alliance partners, and other complementary entities within the supply chain network. Dussauge and Garrette (2006) found that approximately 70% of horizontal alliances occur between competitors [13], highlighting the significance of competitive relationships from this perspective.

This paper adopts these classifications from industrial economics and strategic management to analyze intra-cluster co-opetition strategies within supply chain networks, distinguishing between horizontal and vertical strategies. Previous research indicates that firms’ supply chain integration capabilities enhance their relationships and connections with other network members [14]. This strengthening of relationships can also intensify competitive interactions. Specifically, both horizontal and vertical competitiveness are theoretically influenced by a firm’s supply chain integration capability. Stronger integration capabilities increase the likelihood of forming close network relationships with other members, thereby enhancing competitive relationships. Based on this understanding, the following hypotheses are proposed:

H2. 

Supply chain integration capabilities positively influence intra-cluster competitive strategies.

Competitive strategies inherently involve network relationships among multiple entities. The level of resource integration within a supply chain network significantly influences a firm’s choice of competitive strategy [15]. In times of intensified external turbulence, firms must integrate resources and optimize their competitive strategies to achieve more precise innovation breakthroughs and effectively manage risks.

Firms with strong supply chain integration capabilities are more likely to adopt intra-cluster co-opetition strategies to leverage existing resources and achieve their objectives. Particularly, when a “chain master” enterprise holds a significant position in the supply chain system, intensified external risks can lead to the adoption of vertical competition strategies. This approach facilitates vertical resource integration along the supply chain, enhancing cooperation efficiency and quality. Based on this understanding, the following hypotheses are proposed:

H2a. 

Supply chain integration capabilities positively influence vertical competitive strategies within clusters.

As external risks intensify, enterprises may establish more complex connections with competitors within the supply chain network. This complexity often leads firms to adopt horizontal competition strategies, allowing them to collaborate with competitors on joint research and development or market expansion to achieve cost reductions and breakthrough innovations [16]. For instance, during the COVID-19 pandemic, major global pharmaceutical companies integrated their supply chain resources and even partnered with competitors to co-develop new drugs, thereby mitigating risks and driving breakthrough innovations. Based on this context, the following hypotheses are proposed in this study:

H2b. 

Supply chain integration capabilities positively influence horizontal competitive strategies within clusters.

2.3.3. Competitive Strategies and Breakthrough Innovations Within Clusters

As the external environment undergoes continuous changes, “chain master” enterprises in the supply chain network often prioritize integrating and consolidating resources within the industrial cluster. This is particularly true when the demand for breakthrough innovations increases, leading to a stronger inclination toward intra-cluster competitive strategies [17]. Specifically, implementing competitive strategies within industrial clusters can enhance connections between upstream and downstream supply chain entities and foster cooperative relationships among competitors. This approach improves overall supply chain network efficiency, reduces transaction costs, and facilitates the free flow and sharing of heterogeneous knowledge and information, thereby promoting the emergence of breakthrough innovations [18]. Based on this understanding, the following hypotheses are proposed:

H3. 

Competing strategies within clusters positively affect firms’ breakthrough innovations.

In the vertical supply chain, the upstream-downstream relationship is a central element of the value chain, with supply, production, and marketing activities creating various competitive dynamics. For instance, raw material suppliers might also produce similar products as the downstream enterprises, leading to an integration of supply, production, and marketing functions [19]. To address these dynamics, enterprises should strengthen their relationships with other members of the vertical value chain, enhance knowledge sharing, and implement vertical competition strategies to improve supply chain efficiency. Specifically, vertical competition strategies can clarify and strengthen the division of labor between upstream and downstream partners, facilitate the rapid flow and sharing of information and knowledge, and thereby enhance the operational efficiency of the entire supply chain. This, in turn, creates additional customer value and opportunities for innovation. Based on this understanding, the following hypotheses are proposed:

H3a. 

Vertical competitive strategies within clusters positively influence firms’ breakthrough innovation.

In contrast to vertical competition strategies, horizontal competition strategies do not directly involve frequent interactions between upstream and downstream enterprises within the value chain. Instead, horizontal competition primarily concerns interactions with competitors, financial institutions, and other entities involved in diversified cross-border expansion. These strategies typically involve forming horizontal alliances with competitors, setting common goals, fostering mutual trust and commitment, sharing complementary resources, and promoting continuous learning and innovation. Such collaborations can enhance the ecological value of the supply chain [20].

The formulation and implementation of horizontal competition strategies can improve the operational efficiency of the supply chain network, accelerate knowledge sharing and information exchange among competitors, and facilitate collaborative efforts to address industry challenges, thereby increasing the potential for breakthrough innovations. Based on this understanding, the following hypotheses are proposed:

H3b. 

Horizontal competitive strategies within clusters positively influence firms’ breakthrough innovation.

2.3.4. Mediating Effects of Competing Strategies Within Clusters

Research indicates that supply chain network integration capability positively influences firms’ innovation performance, with breakthrough innovation being a key driver of this performance. It follows that supply chain integration capability can effectively foster breakthrough innovations. However, the intermediary mechanisms involved in this process are not well explored. From the perspective of cluster competitiveness, supply chain network integration capability significantly impacts intra-cluster competitive strategies [21]. In a complex and volatile external environment, strong supply chain integration accelerates the development of competitive behaviors or strategies among firms. This, in turn, promotes resource sharing and complementarity, enhances innovative activities, and increases the likelihood of overcoming traditional thinking and technological barriers, thereby facilitating breakthrough innovations [22].

Thus, it is reasonable to hypothesize that intra-cluster competitive strategies serve as a mediating mechanism in the relationship between supply chain integration capability and breakthrough innovation. Based on this, the following hypotheses are proposed:

H4. 

Intra-cluster co-opetition strategies play a mediating role in supply chain integration capabilities affecting breakthrough innovations.

Vertical competition strategies primarily involve interactions between upstream and downstream enterprises within the supply chain. These interactions often involve close business transactions and complex relationships, which facilitate the sharing of information and knowledge during the vertical value transfer process. This sharing creates favorable conditions for enterprise innovation [6].

Breakthrough innovation, however, is not merely an accumulation of existing elements or a simple imitation. It represents a fundamentally new state that disrupts existing models or cognitive structures. In a rapidly evolving information environment, relying solely on the internal accumulation and knowledge fusion of individual enterprises is insufficient to keep pace with external changes. Therefore, it is crucial to strengthen the links between supply chain members, integrate relevant resources in the vertical supply chain, and implement vertical competition strategies. By enhancing vertical competition relationships, firms can promote the rapid sharing and iteration of knowledge and facilitate upstream-downstream interactions, thereby increasing the likelihood of breakthrough innovations.

Based on this understanding, the following hypotheses are proposed:

H4a. 

Vertical competitive strategies mediate the process of supply chain integration capabilities influencing breakthrough innovations.

Traditional supply chain theory primarily emphasizes vertical relationships between upstream and downstream enterprises, focusing on achieving vertical competitive relationships. However, in the era of artificial intelligence, supply chains have evolved into supply networks, with a greater emphasis on forming and strengthening horizontal relationships, particularly between core enterprises and competitors.

From a resource constraints perspective, competitors within the same supply network face challenges related to resource competition and conflict [23]. Conversely, from a resource growth perspective, these competitors can collaborate on scientific research to address common industry issues or growth bottlenecks, or they can jointly explore new markets. Such cooperation can drive the rapid expansion of overall resources, enhancing the interests of all parties involved.

When enterprises possess strong supply chain integration capabilities, implementing horizontal competition strategies can foster collaboration among competitors to jointly overcome industry challenges or bottlenecks. This collaborative approach promotes overall industry improvement and incremental development, significantly increasing the likelihood of breakthrough innovations. Based on this rationale, it is reasonable to propose the following hypothesis:

H4b. 

Horizontal competitive strategies mediate the process of supply chain integration capabilities influencing breakthrough innovations.

2.3.5. Moderating Effects of Environmental Volatility

Environmental volatility measures the degree of change and uncertainty in the external environment in which a firm operates. While uncertainty is inherent in business processes, environmental turbulence can amplify this uncertainty, particularly within the supply chain ecosystem as a whole [24]. Consequently, external environmental turbulence can influence the relationship between supply chain network integration and innovation behavior.

Under high environmental turbulence, “chain master” enterprises are more likely to intensify the integration of supply chain resources within the cluster, shifting focus away from conventional innovation activities towards disruptive, breakthrough innovations. This approach strengthens the link between supply chain integration and breakthrough innovation, allowing firms to counter external risks with disruptive products or technologies. Conversely, when environmental turbulence is low and conditions are relatively stable, firms tend to prioritize routine innovation behaviors, pursuing incremental innovations step by step. As a result, they may relax the process and intensity of leveraging supply chain integration resources for breakthrough innovations, thus weakening the relationship between supply chain integration and breakthrough innovation [25].

Based on these observations, the following hypotheses are proposed:

H5. 

Environmental volatility has a positive moderating effect on the relationship between supply chain integration capabilities and intra-cluster co-opetition strategies.

When the external environment of enterprises is highly turbulent, risks and costs rise significantly. In response, enterprises within the supply chain, especially “chain master” firms, often actively leverage their supply chain integration capabilities to enhance the competitiveness of upstream and downstream partners [18]. This leads to the adoption of vertical competition strategies, which aim not only to reduce costs and improve efficiency but also to explore paths for breakthrough innovation. Conversely, when environmental volatility is low, the overall supply chain ecosystem remains relatively stable. In such conditions, the urgency for enterprises to actively integrate supply chain resources to establish competitive relationships diminishes, thereby weakening the link between supply chain integration capability and vertical competition strategy.

Based on this analysis, the following hypotheses are proposed:

H5a. 

Environmental volatility has a positive moderating effect on the relationship between supply chain integration capabilities and vertically competing strategies.

Environmental volatility has an even greater impact on horizontal relationships within the supply chain system. As the degree of external volatility increases, the systemic risk facing the entire supply chain escalates. In these circumstances, for firms within the supply chain, especially “chain master” enterprises, the resource constraints imposed by competition can further exacerbate risks and internal depletion within the supply chain system. Thus, fully leveraging supply chain integration capabilities to foster healthy competitive relationships with competitors becomes a critical strategy for sustainable development [21]. Horizontal competition, particularly with direct competitors, emerges as a key approach for firms seeking long-term viability. Conversely, when external turbulence is low, the motivation for enterprises to integrate supply chain resources and thereby build or rebuild horizontal competitive relationships is diminished. This leads to a weakened link between supply chain integration capability and horizontal competitive strategies.

Based on this reasoning, the following hypotheses are proposed:

H5b. 

Environmental volatility has a positive moderating effect on the relationship between supply chain integration capabilities and horizontal competing strategies.

In summary, the theoretical model of this study is shown in Figure 1:

3. Research Design

3.1. Sample Selection

The research sample was collected primarily from January 2023 to January 2024, focusing on local enterprises in China. The regional distribution predominantly included the eastern and western regions, specifically Shandong, Inner Mongolia, Guizhou, Yunnan, and the Beijing-Tianjin-Hebei area. Due to resource limitations, the number of enterprises from the northeast and central regions was relatively small. The sample encompassed a variety of industries, including petrochemicals, ceramics, financial investment, high-end manufacturing, information technology, power and energy, biopharmaceuticals, fine chemicals, food processing, and environmental protection technology.

Regarding the nature and size of the enterprises, the sample primarily consists of private and joint-stock companies, accounting for over 80%, with a smaller proportion of state-owned and large-scale central enterprises. Most sample enterprises are manufacturing and productive service companies, which make up more than 80% of the total, with the remainder being general service enterprises. Overall, the sample is highly representative and reliable, aligning well with the research theme.

3.2. Data Sources

Based on the needs of this research topic, in this research, data collection was conducted through telephone interviews, field interviews, research questionnaires, and other methods. The specific data sources are detailed below: First, 120 enterprises were randomly selected from the Cathay Pacific CSMAR database and contacted via phone and email for questionnaire distribution. Of the 120 questionnaires issued, 26 were returned, resulting in a feedback rate of 21.67%. After excluding invalid responses, 22 valid questionnaires remained, yielding a final validity rate of 18.33%. Second, leveraging connections with government departments, industry associations, classmates, alumni, friends, and relatives, 180 questionnaires were distributed primarily through management committees of industrial parks or development zones and relevant organizations. Of these, 177 questionnaires were returned, with 134 valid responses after excluding invalid ones. Third, 56 questionnaires were distributed to enterprises with which the research team has long-standing cooperative relationships or social ties, including alumni networks. After excluding invalid responses, 49 valid questionnaires were collected. In total, 209 valid questionnaires were obtained from these three channels, providing a robust dataset for the research.

3.3. Measurement of Variables

This study primarily relies on well-established scales from authoritative journals and widely accepted measurement methods. Adjustments were made as necessary to align with the research context and real-world conditions. For variables requiring scale measurement, a 7-point Likert scale was employed. For variables that do not necessitate scale design, internationally recognized indicators were utilized to ensure accuracy and comparability in measurement.

3.3.1. Dependent Variable: Supply Chain Integration Capability (SCI)

Drawing on the research of Jiang (2024) [9], this study incorporates the specific characteristics of firms within intra-clusters to design a set of three question-item measurements. A 7-point Likert scale is utilized to assign scores, effectively capturing the nuances of firms’ supply chain integration capabilities.

3.3.2. Dependent Variable: Breakthrough Innovation (BTI)

This study employs commonly accepted measurement methods both domestically and internationally, using indicators such as “the ratio of the number of new product developments”, “new technology patents within the past three years”, and “return on assets” to assess firm performance.

3.3.3. Mediating Variable: Co-Opetition Intra-Cluster Strategies (COS)

Based on the studies by Osarenkhoe (2010) [12] and Ring et al. (1992) [7], this paper measures intra-cluster co-opetition strategies (COS) by dividing them into two dimensions: vertical competing strategies (VCS) and horizontal competing strategies (HCS). The VCS is measured using four items, drawing from the works of Wang and Liu (2023) [22]. The HCS is also measured using four items, referencing the studies by Xia et al. (2023) [26].

3.3.4. Moderating Variable: Environmental Volatility (EOV)

This study drew on the measurements of Lee and Chen (2009) [27] and utilized a 7-point Richter scale.

3.3.5. Control Variables: Firm Size (GM), Industry (HY), and Level of Internationalization (GJ)

In this study, firm size (GM), industry (HY), and level of internationalization (GJ), which may affect breakthrough innovation, are selected as control variables based on the research questions and firms’ practices. Drawing on internationally adopted indicators, firm size is measured by the number of people or assets, internationalization level is measured by the proportion of international business in the total business, and industry is measured by assigning industry characteristics using 0–1 variables.

4. Empirical Testing and Analysis of Results

This study used SPSS21.0 and Amos17.0 software for statistical analysis. The reliability and validity of the scale was tested by exploratory factor analysis and validation factor analysis to ensure the reliability and validity of the scale, and the model was tested by using correlation analysis and multiple regression analysis, and the results of the data test were theoretically analyzed by combining the relevant theories and the reality of the enterprise.

4.1. Reliability and Validity Tests

This study mainly draws on the mature scales at home and abroad, and combines the actual enterprises in the cluster and the research situation for the design and improvement of the scale, after testing the scale has good reliability and validity. The test results show the following: (1) The Cronbach’s α coefficient of each variable in the scale is higher than 0.70 except for EOV; KMO and Bartlett’s spherical test show that the KMO value is higher than 0.68 except for EOV; and the Bartlett’s spherical test is Sig. = 0.000. In addition, the test index of EOV is lower than the empirical value, which is mainly due to the fact that there are only two question items in EOV, but its test index is lower than the empirical value, mainly because there are only two question items in EOV. However, its factor loading is more than 0.6, which generally meets the standard. In conclusion, the results show that it is completely suitable for factor analysis. (2) The results of the validation factor analysis showed that χ²/df = 2. 832 < 3, RMSEA = 0.061 < 0.08, the fit values of GFI, IFI, TLI, and CFI were all greater than 0.9, which showed that the indexes fit well, and the factor loading of the variables were more than 0.50, which indicated that the scales had good construct validity, as shown in

Table 1. Reliability and validity analysis.

Variant	Subject	Payloads	Cronbach’s α	KMO and Bartlett’s Test of Sphericity
Supply Chain Integration Capability (SCI)	1. A high degree of integration of application systems between different departments of the enterprise. 2. The company actively utilizes cross-functional teams in the market development and product development process. 3. Influence of the chain owner’s enterprise. 4. The enterprise has a high degree of information and knowledge sharing with major core suppliers and customers in the supply chain.	0.564 0.630 0.651 0.551	0.774	KMO = 0.736 Bartlett’s test of sphericity Cardinality = 225.587 Sig. = 0.000 The total variance explained is 59.907%
Vertical Competition Strategy (VCS)	1. Our company can reduce costs by cooperating with upstream companies. 2. Cooperation between this enterprise and downstream enterprises can reduce losses caused by market changes. 3. Mutual trust can be achieved with companies in the vertical supply chain. 4. Be able to resolve differences and conflicts accordingly in an appropriate manner.	0.547 0.659 0.670 0.613	0.796	KMO = 0.758 Bartlett’s test of sphericity Cardinality = 250.389 Sig. = 0.000 The total variance explained is 62.233%
Horizontal Competition Strategy (HCS)	1. The two partners are in the same industry. 2. Homogenous products or services provided by the cooperating parties. 3. Existence of common suppliers or customers of the cooperating parties. 4. Cooperation between the two parties in at least one aspect of research and development, technology, products, and markets.	0.618 0.637 0.738 0.629	0.824	KMO = 0.757 Bartlett’s test of sphericity Cardinality = 303.530 Sig. = 0.000 The total variance explained is 65.541%
Environmental Volatility (EOV)	1. Relatively rapid technological change in the industry in which the enterprise operates. 2. Difficulty for the enterprise to predict future trends in technological change.	0.620 0.620	0.388	KMO = 0.500 Bartlett’s test of sphericity Cardinality = 12.330 Sig. = 0.000 The total variance explained is 62.037%
Breakthrough Innovation (BTI)	1. Return on Assets (ROA). 2. Percentage of new product development. 3. Patents for new technologies within three years of the enterprise.	0.820 0.825 0.879	0.794	KMO = 0.689 Bartlett’s test of sphericity Cardinality = 192.885 Sig. = 0.000 The total variance explained was 70.854%

.

4.2. Correlation Analysis

Descriptive statistics and correlation analysis were performed for each variable in the model. The results, detailed in

Table 2. Matrix of descriptive statistics and Pearson’s correlation coefficient.

Variable	Average Value	Standard Deviation	SCI	VCS	HCS	BTI
SCI	4.690	1.051
VCS	2.426	0.785	−0.264 **
HCS	5.165	1.046	0.292 **	−0.440 **
BTI	5.394	1.051	0.373 **	0.418 **	0.542 **
EOV	4.797	1.019	0.077 *	−0.123	0.142 *	0.142 *

Note: ** denotes p < 0.01, * denotes p < 0.05.

, reveal significant correlations among independent variables, mediator variables, and dependent variables, with significance levels greater than 0.05. These findings suggest that the model is suitable for further multivariate regression analysis.

4.3. Hypothesis Testing

4.3.1. Tests of Model Main and Mediating Effects

To test the main and mediating effects in the model, five regression models were set up. The first four models examine the direct effects between variables, while the fifth model assesses the mediating effects of vertical and horizontal competition strategies within the cluster. The results of these tests are presented in

Table 3. Main and mediating effects tests.

Implicit Variable		BTI	VCS	HCS	BTI	BTI
		Model 1	Model 2	Model 3	Model 4	Model 5
Containment Variant	GM	0.135 *	0.054	0.126	0.068	0.077
	HY	0.135 *	−0.116	0.072	0.088	0.087
	GJ	0.044	−0.060	0.139 *	−0.018	−0.011
Account for Variant	SCI	0.366 ***	−0.259 ***	0.288 ***		0.210 ***
	VCS				−0.210 **	−0.175 **
	HCS				0.434 ***	0.387 ***
R2		0.180	0.088	0.122	0.347	0.387
Adj-R2		0.164	0.070	0.104	0.331	0.368
F-value		11.207 ***	4.908 **	7.059 ***	21.620 ***	21.215 ***

Note: *** denotes significance level p < 0.001, ** denotes p < 0.01, * denotes p < 0.05.

.

The test results in Table 3 show that the five models set up are significant overall (p < 0.01), with supply chain integration capability positively affecting breakthrough innovation in Model 1 (β = 0.366, p < 0.001), and Hypothesis H1 supported. Supply chain integration capability has a significant effect on internal vertical and horizontal competing strategies in Models 2 and 3 (β = −0.259, p < 0.001); β = 0.288, p < 0.001), Hypothesis H2a is not supported and Hypothesis H2b is supported. Vertical and horizontal competing strategies in Model 4 have a positive impact on breakthrough innovation (β = −0.210, p < 0.01; β = 0.434, p < 0.001), respectively, and Hypothesis H3a is not supported and Hypothesis H3b is supported. In Model 5 the direct effect of supply chain integration capability on breakthrough innovation is weakened by the addition of vertical versus horizontal competing strategies in Model 5, but it is still significant (β = 0.210, p < 0.001), and the effect of vertical versus horizontal competing strategies on breakthrough innovation is still significant (β = −0.175, p < 0.01; β = 0.387, p < 0.001), and Hypothesis H4 is supported.

4.3.2. Tests of Model Moderation Effects

Following the direct and mediation effect tests, the moderating effect of environmental turbulence was examined. Four models were used to test how environmental turbulence moderates the relationship between supply chain integration capability and both vertical and horizontal competing strategies. The results are detailed in

Table 4. Tests of model moderating effects.

Dependent Variable	VCS		HCS
	Model 1	Model 2	Model 3	Model 4
SCI	−0.256 ***	−0.257 **	0.273 ***	0.396 ***
EOV	−0.103	−0.103	0.246 ***	0.284 ***
SCI*EOV		0.002		0.183 *
R2	0.080	0.080	0.145	0.161
F-value	9.000 ***	5.970 **	17.511 ***	13.157 ***

Note: *** denotes significance level p < 0.001, ** denotes p < 0.01, * denotes p < 0.05.

.

As shown in the results of Model 1 and Model 2 tests in Table 4, the interaction of supply chain integration capability and environmental volatility (SCI*EOV) has a non-significant significant effect on vertical competitive strategy (VCS) (β = 0.002, p > 0.05); the positive effect on horizontal competitive strategy is significant (β = 0.183, p < 0.05), Hypothesis H5a is not supported, and Hypothesis H5b was supported (Figure 2).

4.3.3. Robustness Tests

To enhance the reliability of the research findings, this paper conducted robustness tests using three methods: firstly, changing the measurement of control variables, changing the original measurement of enterprise size by total assets to the measurement of total number of people in the enterprise; secondly, eliminating the industry variables in the control variables and re-testing them; and thirdly, eliminating some samples of the enterprises to carry out the data test. In this paper, the total number of people instead of total assets is used to measure enterprise size, and the influence of industry and internationalization variables is removed and part of the sample size is reduced for re-testing. The results of these robustness tests are presented in

Table 5. Adjusted main effects and mediation effects tests.

Implicit Variable		BTI	VCS	HCS	BTI	BTI
		Model 1	Model 2	Model 3	Model 4	Model 5
Containment variant	GM	0.132 *	0.066	0.105	0.071	0.079
Account for variant	SCI	0.370 ***	−0.267 ***	0.276 ***		0.213 ***
	VCS				−0.223 **	−0.184 **
	HCS				0.433 ***	0.391 ***
R2		0.154	0.076	0.087	0.335	0.375
F-value		18.468 ***	8.295 ***	9.684 ***	33.884 ***	30.189 ***

Note: *** denotes significance level p < 0.001, ** denotes p < 0.01, * denotes p < 0.05.

and

Table 6. Adjusted moderating effects test.

Dependent Variable	VCS		HCS
	Model 1	Model 2	Model 3	Model 4
SCI	−0.256 ***	−0.260 **	0.248 ***	0.371 **
EOV	−0.104	−0.105	0.261 ***	0.300 ***
SCI*EOV		0.006		0.185 *
R2	0.082	0.082	0.144	0.160
F-value	9.055 ***	6.008 **	17.030 ***	12.869 ***

Note: *** denotes significance level p < 0.001, ** denotes p < 0.01, * denotes p < 0.05.

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The robustness tests revealed some variations in the regression coefficients among the variables; however, the positive and negative signs, as well as the significance of the regression coefficients, remained consistent. This indicates that the model test results are robust and reliable at the current test level.

5. Conclusions

This paper adheres to the “capability-strategy-performance (result)” framework in management theory. It applies theories related to supply chain networks and breakthrough innovation, and conducts empirical analysis through theoretical deduction and modeling from a competitive perspective. The analysis yields several key conclusions and insights. The details are as follows:

5.1. Conclusions of the Study

This study draws several conclusions from model construction and testing. First, supply chain integration significantly promotes breakthrough innovation. Particularly when external risks emerge, enterprises often pursue breakthrough innovation by horizontally integrating resources within their industrial clusters. This strategy helps mitigate external risks caused by sudden environmental changes, especially for “chain master” enterprises in strategic new industries.

Second, from a competitive perspective, the influence of supply chain integration on breakthrough innovation operates through two intermediary mechanisms: vertical and horizontal competition strategies within the cluster. Also, “chain master” firms enhance operational efficiency and innovation generation by vertically integrating upstream and downstream resources. However, excessive vertical integration may suppress or hinder breakthrough innovation among other supply chain members. Concurrently, firms reduce costs and mitigate external risks through horizontal competition strategies, such as joint research and development or collaborative market development. Consequently, enterprises within the supply chain network, especially “chain master” firms, select competitive strategies or combinations thereof based on their supply chain integration capabilities, aiming to integrate resources within the industrial cluster for effective risk hedging and breakthrough innovation.

Third, the volatility of the external environment significantly impacts the entire supply chain system, particularly influencing horizontal competition strategies. Research indicates that environmental volatility positively moderates the relationship between supply chain integration capability and horizontal competition strategy. Specifically, as the degree of external volatility increases, so does the inclination of firms to adopt horizontal strategies that foster cooperation with competitors in innovation activities to address external risks.

5.2. Policy Recommendations

5.2.1. Combining the Enterprise’s Supply Chain Resource Integration Capability and Selecting Appropriate Competitive Strategies to Realize Breakthrough Innovation

In the current global economic downturn and with increasing external risks, enterprises must integrate supply chain resources to achieve risk and cost-sharing. For “chain master” enterprises, it is crucial to fully integrate internal resources within the supply chain network, leverage the benefits of industrial clusters, and adopt competitive and cooperative strategies that align with their specific circumstances. This approach should not only improve vertical efficiency within the supply chain but also include timely horizontal competition strategies. By collaborating with competitors, enterprises can aim for innovation breakthroughs, create new markets, generate fresh momentum, and seize new opportunities to mitigate external risks. This strategy will facilitate industrial upgrading and foster the development of new quality productivity.

5.2.2. Choosing Its Own Competitive Strategy to Realize Breakthrough Innovation, Taking into Account Its Position and Location in the Supply Chain

In the supply chain network, both “chain master” enterprises—such as HUAWEI, CSR, BOE, and BYD—and those not in core positions must effectively leverage supply chain integration capabilities and adopt appropriate competition strategies to accelerate breakthrough innovation. While leading firms focus on enhancing their integration capabilities to drive innovation, enterprises in peripheral positions should also capitalize on supply chain network resources. By employing strategies of competition and cooperation, these firms can achieve breakthrough.

5.2.3. Fully Consider the Volatility of the External Environment and Select Appropriate Competition Mechanisms in Conjunction with and Assessing the Risks of the External Environment

The role of competition mechanisms is crucial in the process of using supply chain integration capabilities to drive breakthrough innovation. Selecting a competition mechanism that aligns with the enterprise’s resource endowment is essential for fostering such innovation. It is particularly important to consider the impact of external environmental risks when evaluating horizontal competition mechanisms. Enterprises should comprehensively assess their supply chain integration capabilities and competitive strategy types, and make informed decisions based on the level of external risk. This approach will facilitate breakthrough innovation and support sustainable development.

5.3. Shortcomings and Prospects

This paper elucidates the intrinsic mechanisms by which supply chain integration capability influences breakthrough innovation from a competitive perspective. It particularly explores the dynamic changes and significant differences between the strategic intermediary mechanisms of vertical and horizontal competition amid external environmental turbulence. This analysis enhances theoretical research related to supply chain management and innovation. Additionally, the paper identifies its limitations and proposes directions for future research.

In practice, the boundaries of supply chains are often blurred, with multiple industrial chains intertwining and integrating. Defining these boundaries remains a common theoretical challenge, and this study has not resolved this theoretical bottleneck. Future research should extend beyond traditional supply chains to explore supply networks or supply chain ecosystems, incorporating portrayal and simulation methods.

Additionally, this study did not address time series issues and lacked in-depth observation of dynamic adjustments within the supply chain system and individual enterprises. Future research should include long-term tracking with fixed samples to analyze the strategic choices and dynamic adjustments of established supply chain systems and “chain master” enterprises over time. Utilizing panel data could provide insights into the evolving relationships between variables.