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.


Introduction
The term 'private label' refers to products sold under a retailer's private label but manufactured by a third party called a private label manufacturer.In other words, the company that owns the brand is different from the company that actually manufactures the product (Fuduric et al., 2022).Private label is a growing trend, with consumers of all ages being heavily influenced by online reviews of private label products (Regt et al., 2020).Consequently, retailers are increasingly adopting multiple strategies, for example, economy, standard and premium private labels (Rubio et al., 2020).Hence, retailers add value and diversity (product differentiation) to their private label lines and reach more Therefore, to address these two knowledge gaps in the B2B literature on the promotion of private label manufacturing, the present study aims to research the private label from a supplier's perspective, including the challenges of digital communication, that it can help promote the offer of manufacturing customised products for third parties (wholesalers or retailers) to sell under their private label.
To the best of our knowledge, this study is the first to research private label manufacturers considering digital strategy as a driving factor.The study fills this gap and extends the private label literature to verify the relationship between digital communication strategy, networking capacity and private label performance from a supplier's perspective.
The structure of our article is as follows: the first section presents introductory considerations; Section 2 provides the theoretical basis, hypothesis formulation and consequent conceptual model; Section 3 describes the methodology; Section 4 presents the results.Finally, Section 5 presents the discussion, practical implications, limitations and future research.

Literature review
As mentioned previously, studies on digital marketing for B2B companies are still scarce (Pandey et al., 2020;Saura et al., 2021), and in that sequence, Shree et al. (2021) recommend further research in B2B digital marketing that delves into specific contextual situations.Especially since a digital marketing strategy can serve as a potent tool for various businesses (Gil-Cordero et al., 2021;Olson et al., 2021;Rizvanović et al., 2023), presumably also encompassing those who manufacturers private label products.The path may be to select digital marketing strategies tailored to the company's activities and goals (Olson et al., 2021).Nevertheless, to the best of our knowledge, no studies examine the digital marketing strategy in companies supplying private label products.This gap is noticeable, especially given that existing studies on private labels tend to focus primarily on the demand side (Keller et al., 2022;Milberg et al., 2019).
Similarly, Pandey et al. (2020) advocate for further research emphasising the progress in digital marketing strategies within B2B companies concerning their relationships with channel partners.Another relevant argument that emphasises the need for this research is justified by the Deloite (2016), which indicates that retailers were making significant investments in advanced technology to manage the supply of their brands.This implies that private label supply companies urgently need to develop a digital presence strategy; otherwise, they risk becoming less visible and competitive.
Thus, considering the proposal by Shree et al. (2021) on the importance of contextualisation in studies, the supply of private labels represents a particularly relevant situation.This is mainly due to the nature of this business, which is based on close collaboration between manufacturer and retailer.Private label manufacturing may, in some cases, involve some level of secrecy or confidentiality.Wholesalers and retailers selling private-label products often wish to maintain manufacturer anonymity.Thus, they prevent competitors or consumers from knowing which manufacturers are involved (Milberg et al., 2019).Consequently, for the manufacturer to promote the private label offer is always a challenge so as not to affect the interests of its customers (wholesalers/retailers).In this way, the digital strategy can help in this challenge.A digital strategy facilitates the identification of the specific needs and preferences of the target audience in the B2B segment, contributing to a more efficient and customised manufacturer-retailer relationship (Kamalaldin et al., 2020).The manufacturers can more easily design relevant sequences of touchpoints, improving the B2B customer experience (Lundin & Kindström, 2023).Currently, B2B business relationships are supported by multiple digital tools (social media, mobile, artificial intelligence, big data analytics, blockchain, data security/integrity, internet of things), allowing companies to establish more direct, efficient and personalised with business partners (Hofacker et al., 2020).
Therefore, below, the study deepens important research domains in B2B marketing, discussing the role of digital strategy on networking capacity and consequent business performance in the context of private labels and from the manufacturer's perspective.

Digital strategy of the private label manufacturer and its networking capacity
Digital strategy is a set of integrated processes between digital technologies, people and organisations that foster the strategy (Morton et al., 2022) aimed at creating value and/or competitive advantages (Chi et al., 2016;Vial, 2019).Although these digital marketing strategies are growing in B2B businesses (Hayes & Kelliher, 2022;Pandey et al., 2020), the majority still need to work on harnessing all its advantages (Pandey et al., 2020).However, studies show that digitalisation is profoundly impacting B2B relationships (Hofacker et al., 2020).For instance, digital platforms can help customers to co-create value and customise their products (Dong & Wu, 2015).This ability of companies to select, attract and engage with a heterogeneous set of stakeholders (customers, suppliers and partners) fosters value creation (McIntyre & Srinivasan, 2017).In fact, with increasing digital environments, companies need networking to co-create value with a set of digitally connected stakeholders (Verhoef et al., 2021).Thus, digital marketing starts to become a key element in the development of B2B strategies; for example, Customer Relationship Management (CRM) with an analytical, operational and collaborative dimension can help to understand, analyse and explore content for the strategies of manufacturers (Saura et al., 2021).Nonetheless, managing relationships via digital platforms poses distinct challenges for B2B enterprises.This highlights the substantial demand for well-adapted relationship marketing strategies that harmonise with the specific context (Lasrado et al., 2023).Moreover, the implementation of a digital strategy might necessitate embracing a strong data-driven culture, facilitating agile and well-informed decision-making (Awan et al., 2023;Hallikainen et al., 2020).This underscores the requirement for analytical resources and expertise within B2B companies (Hallikainen et al., 2020).
Specifically, in the context of private labels, a digital strategy to foster manufacturer networking capacity can be effectively relevant.Network capability is the ability to establish inter-organisational relationships aiming at mutual benefits (Silva, Moutinho, et al., 2022).Yet, network capability is not innate and requires time to develop in companies (McGrath et al., 2019).Thus, inter-organisational cooperation through digital technologies allows access to data, knowledge and good practices that help to develop a competitive advantage in the market (Ławicka, 2022).For instance, digital marketing can shape how customers experience value co-creation and the outcome of co-creation (Hofacker et al., 2020).Digital has intrinsic characteristics that allow it to create different touchpoints, suitable for specific purposes both individually and from a sequential perspective (Lundin & Kindström, 2023).These strategic touchpoints can help private label manufacturers establish lasting relationships with customers.Another example is the creation of a website or digital showcase that allows the manufacturer to promote twoway communication with current and potential customers (retailers) more frequently and efficiently than other forms of communication (Levy et al., 2022).B2B live streaming platforms are also an example; they can be an efficient information communication channel, reducing the use of emotional evaluation language and adopting more pragmatic marketing and sales approaches (L.Liu et al., 2023).
Therefore, the use of digital technology can be capitalised for customisation, enabling sustained competitive performance and subsequent customer relationship performance (Lin & Lin, 2023).Hence, based on these ideas, the following hypothesis is formulated: H1.The private label manufacturer's digital strategy has positive and significant impacts on its network capacity.

Private label manufacturer's digital strategy and the impact on private label performance
The digital strategy can be a strong ally to expand the private label supply because digital relationships are relevant for the development and maintenance of business, especially for companies that operate in international markets (Herhausen, Miočević, et al., 2020) and help improve their competitive position in the B2B markets (Koch & Windsperger, 2017).For instance, integrating data from a potential buyer company with marketing content data from a supplier company enables one to extract knowledge and benefits for the parties (Upreti et al., 2021).
Moreover, buyer-supplier relationship management is critical to business success (Pandey et al., 2020).In the B2B context, although personal relationships are often thought of as face-to-face interactions (Herhausen, Miočević, et al., 2020), employees' digital presence can increase customer perceptions of competence and commitment in customer-company relationships (Herhausen, Emrich, et al., 2020).For instance, manufacturers can promote emotional intelligence through content marketing, hereby increasing competitive advantages and brand equity (Hutchins & Rodriguez, 2018), in this case, the private label supply.In other words, it consists of a strategic approach to digital marketing based on offering valuable, relevant and consistent content to attract customers (Arrivé, 2022).Volles et al. (2023) verified that consumers are more receptive to digital recommendations of private labels versus manufacturer's brands.The same can happen in a B2B context, as behind a company, there are people making decisions.
The e-commerce platforms are also an example of a digital strategy where the manufacturers can themselves enter into private label outsourcing contracts (P.Liu et al., 2022).Moreover, digital can provide traceability throughout the value chain, which can be essential for transparency, quality and efficiency in the production of private label products, becoming a critical factor in the sales success of these manufacturers (Holmqvist & Kowalkowski, 2023).Another example is the case of salespeople for whom digital technologies can enhance customer service, providing them with more availability and means to help their customers when in need (Silva, Santos, et al., 2022).When digital marketing capabilities are dynamic and comprehensive, they positively influence company performance (Wang, 2020).
Therefore, digital technology is effective in increasing customer perceived value, especially for the product (Nguyen et al., 2020).Consequently, manufacturers that supply private labels will probably benefit from the development of a digital strategy.These benefits consist of satisfaction with business performance indicators, such as turnover, sales growth, profit, and customer satisfaction, among others (Charoensukmongkol & Sasatanun, 2017).Hence, based on the discussion above, the following hypothesis is formulated: H2.The private label manufacturer's digital strategy has positive and significant impacts on its private label supply performance.

The impact of networking capacity on private label business performance
The dynamics of the relationship between the manufacturer and the private label retailer are critical for the image and positioning of both with the final consumer (Pérez-Santamaría & Martos-Partal, 2021).The commitment to the quality of a relationship between the parties is fundamental for the success of the business.In this regard, Parida et al. (2017) reveal that network capabilities are very important for companies to remain competitive, especially for small companies and start-ups; the main reason being that there is usually an intrinsic interest on behalf of retailers to cooperate with the supplier when it comes to private label supply (Zippel et al., 2013).Indeed, private-label deals usually result in a higher level of exports for the manufacturer (Blanchard et al., 2017).However, in certain situations, these agreements can lead to the suppliers' dependence on the retailer and a consequent increase in power imbalance (Sutton-Brady et al., 2017).The private label business is often based on a balance of negotiation power between the manufacturer and its customers (wholesale and/or retailers) (Pasirayi & Richards, 2023).Therefore, the quality of the relationship between manufacturers and downstream intermediaries is fundamental.Before diversifying the partner network, companies must first strengthen the relationship because network capability can help companies in the scope of relationships effectively (Parida et al., 2016).This management of the buyer-supplier relationship is crucial for the company's growth, where digital can play a relevant role (Holmqvist & Kowalkowski, 2023;Pandey et al., 2020).With the advancement of technology, companies have a range of digital tools at their disposal to facilitate and improve their B2B relationships (Hofacker et al., 2020), and effective adoption of these digital technologies can strengthen B2B partnerships and drive business success.
Thus, within the B2B context, network capability plays an important role in the supply chain (Mitrega et al., 2017) because network capability is a talent to establish interorganisational relationships and thereafter withdraw mutual benefits (Silva, Moutinho, et al., 2022).Consequently, it is essential to strengthen relationships between existing partners, as well as to signal the value of the relationship to attract new partners (Mitrega et al., 2017).The successful sales of businesses are a consequence of network capability (Silva, Moutinho, et al., 2022).
Accordingly, based on the above arguments, the following hypothesis is formulated: H3.The manufacturer's network capacity has positive and significant impacts on its private label supply performance.
Figure 1 represents the conceptual model, developed from the literature review and the formulation of hypotheses, and will be analysed statistically.

Private label manufacturing and export level
The rise of private labels (Regt et al., 2020) can be an opportunity for manufacturers who are available or interested in exporting in this model.This trend occurs both in emerging markets and in several developed markets (Gielens et al., 2021).The private label actually fits into the international subcontracting entry mode (Serdijn et al., 2021), and subcontracting seems to offer opportunities for companies to expand their business to international markets (Hou & Shen, 2022;Kim & Hemmert, 2016).Consequently, private label deals result in higher total export and import volumes (Blanchard et al., 2017).Thus, the growing trend in the consumption of private-label products has reformulated the relational dynamics between retailers and manufacturers.On the one hand, retailers, in addition to international distribution channels, are also business international partners for manufacturers (Milberg et al., 2019).On the other hand, private label manufacturers are a source of solutions for retailers who are looking for low costs, but also other factors such as the lack of internal alternatives, workload volatility, and greater delivery capacity, among other factors (Ahokangas et al., 2022).Therefore, it can be seen that the private label manufacturer can establish business relationships and connections with companies (wholesalers and/or retailers) in other countries.These partnerships can open doors to export opportunities.Thus, in this study, it is appropriate to analyse the existence of significant differences in the performance of private label supply between manufacturers with different export levels.

Methodology
As the main methodology, the present study used covariance-based Structural Equation Modelling (CB-SEM), which is suitable for testing and validating theoretical models involving causal relationships between variables.This methodology allows for checking whether the collected data (in this case, through a questionnaire) fit the proposed models and whether the relationships between the variables are consistent with the theoretical hypotheses (Collier, 2020).
The study also used an ANOVA test to compare four independent groups, in this case, based on the export level of the responding companies.This test serves to determine whether there is a significant difference between the study groups (Ross & Willson, 2017).

Research instrument -survey
The study used a questionnaire survey to collect data from Portuguese manufacturers that supply private labels.Questionnaire items were adapted from previous literature.Two academics and two industrial managers were invited to verify the conceptual equivalence, refining the questionnaire based on their comments, thus ensuring appropriate, clear and relevant content for the study.
The questionnaire started with an explanation and presentation of the study.Its structure contained two parts.The first part had questions related to the profile of the respondent manufacturers, such as business area, turnover, number of workers, percentage of exports and age of the manufacturer.The second part concerned the empirical study.Therefore, to measure the Digital Strategy, five items were developed based on the literature by Chi et al. (2016), Morton et al. (2022) and Vial (2019).To measure Network Capacity, 5 items adapted from Silva, Moutinho, et al. (2022) were used.Finally, to measure Private Label Supply Performance, eight items were used based on Charoensukmongkol and Sasatanun (2017).
In the survey regarding the Digital Strategy and Network Capacity constructs, the managers of the private label supplier manufacturers were asked to indicate their level of agreement or disagreement with these items using a Likert-type scale with five possible responses (from 1, strongly disagree to 5, strongly agree).For the Private Label Supply Performance construct, the same managers were asked to indicate their degree of satisfaction or dissatisfaction with these items using a Likert-type scale with five possible responses (from 1, strongly dissatisfied, to 5, strongly satisfied).
Subsequently, an informal pilot test (Brace, 2013) was carried out using 25 managers of private label manufacturers, and it was verified that the questionnaire fulfilled the objectives of the study.Table A1 in the Appendix reveals the items used in the questionnaire.

Data collection and analysis
The target population of this research are Portuguese private label manufacturers.To accomplish this task, a complete and random database was collected, with 655 private label manufacturers from a prestigious Portuguese Industrial Association that monitors private label suppliers.The main method of dissemination was direct mail addressed to top management.The questionnaire was opened on an electronic platform for data collection between July and September 2022.All 655 manufacturers were consulted, and, in the end, 203 valid and complete responses were collected, obtaining a response rate of 31%.The sample size is considered sufficient, exceeding the item/response ratio (1/10) (Collier, 2020).In addition, the researchers applied a t-test to compare the mean difference between the first 100 and the last 103 respondents.The results have revealed no significant differences; thus, non-response bias was not verified (Armstrong & Overton, 1977).
For the statistical analysis of the data, the CB-SEM was applied.This methodology is suitable for testing a conceptual model, allowing the investigation of the relationships between the various constructs (Collier, 2020;Dash & Paul, 2021), in this case, between Digital Strategy, Network Capacity and Private Label Supply Performance.The IBM® SPSS® Amos was the software used for this purpose, which is a powerful structural equation modelling software (Collier, 2020;Dash & Paul, 2021).
First, the Exploratory Factor Analysis (EFA) was applied, allowing the exploration of the latent dimensions (Watkins, 2021).Then, the Confirmatory Factor Analysis (CFA) was employed, allowing the validation of the constructs and their measurable indicators to confirm the EFA.Finally, Path Analysis was applied that consents to testing the formulated hypotheses (Collier, 2020;Dash & Paul, 2021).
Lastly, an additional analysis was applied using SPSS along with One-way ANOVA (analysis of variance), which allows for comparing means between groups for a dependent variable (Ross & Willson, 2017).Specifically, in the present study, the aim is to verify whether there are differences between groups based on the level of exports (Group 1: export < 10% of turnover; Group 2: export between 10% -25% of turnover; Group 3: between 26% -50%; Group 4: export > 50% of turnover) on the observed variables of the Private Label Supply Performance construct (PLSP1; PLSP2; PLSP3; PLSP4; PLSP5; PLSP6; PLSP7; PLSP8).

Exploratory factor analysis
Data were reported to be normally distributed (see Table 1).When SEM is used, skewness values are considered normal if they fluctuate by ± 3 and kurtosis between ± 10 (Brown, 2006).Using Varimax rotation, three factors were achieved, corroborating with the previously defined theory, as it links the items to the corresponding constructs, so factor loadings exceed the recommended minimum values of 0.5 (Watkins, 2021).Furthermore, the total explained variances in all constructs meet the minimum recommended values of 60% (Watkins, 2021).The KMO value of the data was highly satisfactory (>0.70), and Bartlett's Test of Sphericity was significant at p < 0.001, indicating the item's acceptability (Watkins, 2021).Finally, Cronbach's alpha values of all constructs are higher than the minimum recommended value of 0.7.Thus, the internal consistency of the scales used in each construct was considered adequate (Watkins, 2021).
This entire analysis can be consulted in Table 1, which also presents the means and standard deviation of responses to each item.Therefore, with the results mentioned above, it is considered appropriate to move on to the next phase -CFA.

CFA and structural model
CR indices indicate good reliability for all constructs (all > 0.70).In addition, Convergent validity is also evidenced by AVE; all three constructs of AVE were less than CR and greater than 0.50 (Collier, 2020).The indices of discriminant validity indicate good validity for all three constructs (all AVE > MSV and ASV).Thus, the square root of the AVE measures is superior to all the correlations among all the constructs (Fornell & Larcker, 1981), as shown in Table 2.

Hypothesis test
To test the hypotheses, the hypothesised directional effects of one construct on another have been evaluated (Collier, 2020).The results reveal that private label manufacturer digital strategy has positive and significant impacts on its network capacity (β = 0.35; p < 0.001) and on its private label supply performance (β = 0.47; p < 0.001), hereby supporting H1 and H2, respectively.Moreover, the private label manufacturer networking capacity has positive and significant impacts on its private label supply performance (β = 0.37; p < 0.001); as a result, H3 is also supported.
Therefore, based on the test for homogeneity of variances, the ANOVA found a significant difference between groups, at the 95% confidence interval level, in all observed variables: PLSP1 (p < 0.001); PLSP2 (p = 0.002); PLSP3 (p < 0.001); PLSP4 (p < 0.001); PLSP5 (p < 0.001); PLSP6 (p = 0.026); PLSP7 (p = 0.023); PLSP8 (p < 0.001).This means that we can move on to the next step -Post Hoc Multiple Comparisons -which allows us to analyse the differences between the groups in more detail (Ross & Willson, 2017).The Gabriel test was used because the size between groups varies.Table A2 (in the Appendix) shows the results obtained from multiple comparisons.
Based on these results, it can be seen that Group 1 diverges negatively and significantly from all other groups in the variables PERF1 -Private label turnover, PERF3 -Private label profit, PERF4 -Private label profit growth, and PERF5 -Private label profit return on investment.In the variables, PERF2 -Private label sales growth, PERF7 -Long-term private label customer retention, and PERF8 -Overall satisfaction with private label business performance, Group 1 diverges negatively and significantly only from Groups 3 and 4. In the variables PERF6 -Private label customer satisfaction, there is no significant divergence between the groups.Finally, it should also be noted that in the variable PERF5 -Private label profit return on investment, group 2 diverges negatively and significantly from group 4. Therefore, the results reveal that companies with lower levels of exports tend to be less competent in Private Label Supply Performance.

Discussion
The present study fills a gap regarding the lack of studies on private labels from a supplier's perspective (Keller et al., 2022;Milberg et al., 2019); in addition, it also includes the challenges of the digital strategy, which is an equally scarce topic in B2B literature (Saura et al., 2021).The digital strategy is also an effective tool to strategically promote the availability of private-label products to intermediaries without affecting consumer perceptions (Milberg et al., 2019).Therefore, to the best of our knowledge, this research is the first to investigate private label manufacturers considering digital strategy as a driving factor.
Having achieved the goal of validating the conceptual model and the respective hypotheses, the study adds new knowledge to private label literature from a supplier's perspective (Keller et al., 2022), including the challenges of digital strategy (Gielens et al., 2021;Zhang & Hou, 2022).First, the findings reveal that a manufacturer's strategy that integrates processes between digital technologies, people and organisations, designated as a digital strategy (Morton et al., 2022), can contribute to achieving mutual benefits between supplier and customer through the ability to establish inter-organisational relationships, designated as network capability (Silva, Moutinho, et al., 2022).Second, this study also reveals that the same digital strategy can help improve the competitive position of manufacturers in the B2B market (Koch & Windsperger, 2017), more precisely in the private label market.In this case, by monitoring some indicators such as turnover, sales growth, profit, and customer satisfaction, among others (Charoensukmongkol & Sasatanun, 2017), related to the private label business.Third, the findings show that the quality between suppliers and customers is highly relevant (Mitrega et al., 2017), especially the talent to establish inter-organisational relationships aimed at mutual benefits (Silva, Moutinho, et al., 2022).This ability of manufacturers to select, attract and engage partners is fundamental to fostering value creation (McIntyre & Srinivasan, 2017).Private label sales or businesses are a consequence of this network capability (Silva, Moutinho, et al., 2022).
This study reveals a three-dimensional dynamic between manufacturers' digital strategy and their network capacity, as well as private label business performance.This dynamic adds new insights to the literature.For example, the findings corroborate in part with Verhoef et al. (2021), when the authors highlight the need for companies, through digital tools, to develop networking to co-create value with a set of digitally connected stakeholders.In addition, the study assumes that the right digital strategy can help companies develop private label outsourcing contracts through digital tools, as highlighted by P. Liu et al. (2022).Therefore, these insights generate implications that can be deduced from the research results and are meaningful for private-label manufacturers.
In the end, the additional analysis using ANOVA also revealed that the internationality of manufacturers could be a factor boosting private label performance.These results corroborate previous studies (Ahokangas et al., 2022;Blanchard et al., 2017;Hou & Shen, 2022;Kim & Hemmert, 2016;Milberg et al., 2019).Therefore, the manufacturer, through private label production for foreign customers (wholesales/retailers), can gain access to international markets where his customers already have an established presence.These private-label subcontracting arrangements allow manufacturers to expand their export opportunities (Ahokangas et al., 2022;Blanchard et al., 2017).Thus, manufacturers can explore new markets, reaching a broader and more diversified customer base and also allowing to reduce the dependence of the manufacturer on the domestic market.However, more studies are needed on this topic.

Theoretical implications
This study also contributes to the literature on private labels from a manufacturer's perspective (Keller et al., 2022;Milberg et al., 2019).Furthermore, exploring digital strategies within the realm of private-label manufacturing also contributes fresh insights to the literature, echoing the call by Shree et al. (2021) to investigate novel contexts.Consequently, this study offers valuable perspectives on how digital strategies influence the relationships among private label brands, their suppliers, retailers, and distribution partners.Analysing these interactions enhances understanding of B2B dynamics within the digital landscape.
The evidence provided in this article points to the importance of the digital strategy on the manufacturer's relational capacity and, consequently, on private label supply performance.Digital strategy in a B2B context can be a pragmatic communication tool and can capitalise on customisation (Lin & Lin, 2023;L. Liu et al., 2023).In other words, a digital strategy can allow a clear understanding of specific objectives and needs in relation to manufacturers and intermediaries, thus improving the possibilities of success in the supply of private labels.A B2B digital strategy can thus efficiently direct resources and efforts (Levy et al., 2022;P. Liu et al., 2022), focusing on activities that are most likely to bring tangible results in the private label mode.
Regarding the manufacturer's export level and private label performance, this article provides theoretical support by revealing that companies with lower export levels tend to be less competent in private label performance.In fact, companies (wholesale and/or retail) that subcontract Private Label products can have an established distribution network in several international markets (Blanchard et al., 2017;Hou & Shen, 2022;Kim & Hemmert, 2016).Thus, the manufacturer can benefit from instant access to an existing distribution network, facilitating its export.

Practical implications
The study's findings have some implications for private-label manufacturers.Generally, the deals are complex on the private label supply side, requiring an efficient strategy, mainly to ensure a win-win outcome (Sutton-Brady et al., 2017).Therefore, this paper highlights the fact that the digital environment offers new opportunities for Private label channel members to interact, as mentioned by Wu et al. (2021).For this reason, private label manufacturers must invest in a digital strategy.In the context of this study and following the perspective of Morton et al. (2022), the private label manufacturer's digital strategy is any action focused on the interaction between digital technologies, people and processes (internal and external) that aim to form, transmit, implement, and support the private label supply strategy.For example, the B2B customer is usually more consultative and increasingly resorts to research information on the market via the Internet, thereby determining that the website occupies a preponderant role in this research (Levy et al., 2022).Manufacturers can also motivate employees' digital presence to foster customer-company relationships (Herhausen, Emrich, et al., 2020).However, this digital strategy can and should also be supported by face-to-face work, with the aim of promoting dialogue and interaction with the private label customer.
Another example is the use of content marketing by manufacturers based on offering valuable, relevant and consistent content to attract customers (Arrivé, 2022).This point is extremely strategic because, in the B2B segment, the contents are relevant to educate and engage with the customer so that the negotiations are successful.In addition, salespeople of private label manufacturers can use metadata from browsing behaviour and content marketing to improve their operations (Upreti et al., 2021), as well as sophisticated CRMs that can support manufacturers in implementing strategies in their businesses (Saura et al., 2021).In practical terms, these consequences might necessitate fostering an internal data-driven culture.This organisational approach prioritises the use of data to influence decisions, strategies, and operations, aiming to facilitate well-informed, evidence-based choices (Awan et al., 2023;Hallikainen et al., 2020).The capability to convert data into a strategic resource has the potential to enhance operational efficiency in the production of private-label products, establishing a lasting competitive edge.However, this requires investment in resources and analytical skills (Hallikainen et al., 2020).
This study also suggests, for instance, that the use of e-commerce platforms can help promote private label outsourcing partnerships (P.Liu et al., 2022).Digital technologies play a vital role in enabling traceability across the entire value chain, ensuring essential factors such as transparency, quality, and efficiency in the production of private-label products (Holmqvist & Kowalkowski, 2023).
The findings related to network capacity also have implications for private label manufacturers.Networking capacity has become an important strategic action to leverage market competitiveness because it consists of the ability of a manufacturer to develop and use inter-organisational relationships for mutual benefit (Silva, Moutinho, et al., 2022).Establishing a digital presence for private label suppliers can foster enduring relationships with retailers, aligning with the prevailing trend observed in retailers' substantial investments in advanced technology for overseeing their own brand supply chains (Deloite, 2016).It is imperative that companies (stakeholders of the private label channel) understand that a good partnership relationship is one that benefits both sides.For this reason, it is recommended that manufacturers value their partnerships as well as themselves, showing that this partnership aims at the growth of all stakeholders.The quality of the relationship is fundamental to avoid abuse of power by the retail customer (Sutton-Brady et al., 2017).
To create a good relationship with private label customers, manufacturers can rely on partnership contracts with duly defined responsibilities and duties, eliminating unsatisfactory partners who do not comply with the agreement.Manufacturers can also depend on process coordination, optimising the best work practices of each one.Among other examples, they can also establish direct, clear and fluid communication channels (where digital communication can play a key role) to optimise the relationship between the parties.Thus, the private label businesses are a result of this network capability (Silva, Moutinho, et al., 2022).
Regarding the additional study on the export level and Private Label Supply Performance, the results reveal that fewer exporting companies tend to be less competent in private label supply.This finding has implications for the manufacturer.By producing products in the private label modality, it can be a competitive advantage to supply foreign brands.This allows the producer to reach customers in other countries, expanding its export opportunities (Ahokangas et al., 2022;Blanchard et al., 2017).Thus, the manufacturer can develop partnerships with international brands and can customise the products according to the preferences and/or specific regulations of the partner's market.The manufacturer can also take advantage of the international partnership's reputation and positioning to promote its private-label production and/or products.Consequently, the manufacturer will gain the trust of potential international customers.
The present study also offers contributions to Industry Associations.When it comes to private labels, these associations can provide support and resources to help manufacturers promote this offering.For example, offering networking opportunities and partnerships through business missions and international collective participation in trade fairs.Industry Associations can also help with training and knowledge, offering training programs and workshops on digital communication, negotiation and private label contracting, among others.These associations can also help manufacturers access shared resources such as market research, private label-related information, private label trends, and other resources.
To sum up, the study highlights the evidence of the usefulness of the digital strategy and the importance of forming alliances in private label supply with strategic partners committed to contributing to mutual development.This is essential for the success of the private label business in the current context.Figure 3 summarises these ideas and vertical relationships between manufacturers and intermediaries following the private label supply chain.
So, at the downstream level, Private Label manufacturers establish relationships with intermediaries through digital strategies and others.Then, the intermediary (brand owner) makes them available for purchase to customers.The manufacturer works closely with the intermediary company to develop the product.While the manufacturer plays a fundamental role in product production, the intermediary (wholesalers and/or retailers) is responsible for brand development, distribution, and marketing/sales.

Limitations and future research suggestions
The present study has some limitations that may serve as an impulse for future studies.First, the investigation is applied to Portuguese manufacturers, which obviously limits its generalisation.Therefore, studies including other geographies are recommended.Second, the study treats the digital strategy as a whole, which limits its breadth of analysis, as it does not specify the type or practices of the digital strategy.For this reason, it will be beneficial to apply a new study detailing the digital strategies used, allowing a more in-depth analysis of private label manufacturers.
Third, although this paper does not try to shed any light on this issue, it would be interesting to include artificial intelligence (AI) in the digital strategy of private label factories in future studies, not only in the upstream and downstream external interaction but also in the internal operations.The use of artificial intelligence in manufacturing creates new opportunities, allowing for increasingly customised, flexible and efficient production.AI can also be quite strategic for private label manufacturers.
Fourth, the present study does not include antecedents of digital strategy.For instance, future studies may include entrepreneurial characteristics.Characteristics such as creativity, risk-taking, and proactive are drivers for the digital environment, where the evolution of digital tools and new business models is constant.
Fifth, the research did not study the influence of networking capacity on digital strategy.Developing relationships with strategic partners can lead to greater stakeholder involvement in the digital strategy.In this sense, a future study may consider this hypothesis.
CR: Composite Reliability; AVE: Average Variance Extracted; MSV: Maximum Shared Variance; ASV: Average Shared Variance.Diagonal elements (bold) show the square root of AVE.