The Global Sourcing Process in Emerging Markets

Abstract

Today, MNCs can be found in practically every one of the 150 countries that call themselves developing, transitional or emerging markets. The characteristics among these countries are widely diverse, and the use that MNCs make of the emerging markets is varied. In the search for cutting cost, MNCs make use of the terminology such as economies of scale, outsourcing and low cost labor. This creates the foundation for the theory of global sourcing in emerging markets. Screening and implementation of global suppliers in emerging markets is highly relevant to the competitiveness of a manufacturing MNC of today. In this sense, the purpose of this thesis is to identify and analyze how to improve MNCs’ supplier implementation process in emerging markets. The study describes what an MNC’s global sourcing process looks like, and how it can be further strengthened, regarding emerging markets. In order to visualize the process the thesis involves the case company Volvo Global Trucks and the emerging market of India. In this thesis, the authors identify that there exists vast saving potentials in India that must be utilized. The outcome suggests what is blocking the increase of global sourcing in emerging markets within the internal organization, and that which should be focused on in order to bridge these blocks.