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In the current conditions of competitive market, companies shed light on not only their own organization’saffairs, but also on the identification of other relevant resources and factors out of their organization to haveappropriate reaction in facing with them. That is to utilize opportunities to gain competitive advantages andenhance their level of competitive capability. The key concern in a supply chain is to coordinately managing andcontrolling of all the primary and support activities of the company that will be achieved with an appropriateintegration of supply chain. In fact, having an integrated approach to the processes, internal and external, andemphasis on win-win approach instead of negotiating approach between elements of the chain are the mostimportant issues in supply chain integration context.This study investigates the impact of supply chain integration on competitive capability. According to thefindings of the study, supply chain integration has direct positive influence on competitive capability. In moredepth, integration with suppliers has direct negative impact on competitive capability elements of cost leadershipand differentiation. Internal integration has no direct impact on competitive capability. On the other hand,internal integration influences on cost leadership and differentiation indirectly through integration with suppliersand integration with customers. So, it can be resulted from findings that internal integration as a foundation forsupply chain integration has direct influence on integration with supply chain partners, suppliers and customers,and eventually, results in improvement of competitive capabilities of the organization.
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