This study aims to develop a more dynamic and relational view of centers of excellence (CoE) within multinational enterprises (MNEs), that is, business units with specific and highly valuable competencies and knowledge, which are transferred and leveraged by other units of the MNE. We employ a longitudinal case study to analyze how, between 1986 and 2014, an external supplier progressively became a CoE within IKEA and even improved this role, thereby becoming increasingly important for the MNE. Particularly, we develop a model linking internal (resources, competencies, and structure) and external factors (exchange volumes, interorganizational routines, mutual dependence, trust and commitment, and identities) with changed network positions, which, in turn, define the intensity and importance of a CoE's role. Thus, the elements required to establish a CoE may not originate from the MNE's core competencies, but may be extracted, recombined, and integrated externally from the MNE's global supply network.
