SUPPLIER SELECTION PROCESS IN EMERGING MARKETS -The Case Study of Volvo Bus Corporation in China-

Abstract

“Hearing a hundred times is not as good as seeing once” – Old Chinese Proverb The complexity of managing an international operating environment has changed significantly over the last few years. The increasing presence of Multinational Corporations in emerging markets has not only increased the advantages of developing global economies of scale, but it has also identified a need for the further coordination and assimilation of company activities into the local market of operation. As more and more MNCs begin entering the Chinese market in an effort to establish long-term competitive advantages and low cost production sites, there becomes an even greater need for a developed business infrastructure, globally integrated technology processes, greater overall efficiency, increased coordination of procedures and synchronized learning efforts. The aim of this thesis is to further investigate how MNCs transfer and apply their global supplier selection processes to emerging markets. We will use Volvo Bus Corporation as our case company, and we will focus our study on the transfer and application of their global supplier selection process to the Chinese market through their joint venture company, Silver Bus Corporation, in China. In order to present a realistic picture of how the supplier selection process is being carried out in the Chinese market, it is first necessary to present a broad overview of the Chinese bus industry and a description of the Chinese Automotive Industry Policy, as well as to provide a brief discussion of the environment in which our research was collected, for a more comprehensive understanding of the situational factors which were present at the time our research was conducted.