Supply Chain Collaboration is cross enterprise and can be vertical and/or horizontal. Vertical supply chain collaboration involves collaboration and coordination with customers and suppliers whilst horizontal collaboration involves collaboration with competitors, government institutions and other important stakeholders. It is generally accepted that supply chain collaboration leads to competitive advantage. Whilst a lot of literature has been published that shows the importance of both horizontal and vertical supply chain collaboration in enhancing competitive advantage, very few studies have focussed on the factors that influence successful collaboration and the achievement of competitive advantage due to supply chain collaboration. This paper proposes a conceptual model that attempts to close this gap utilizing the concept of virtual clustering.