Sourcing in emerging markets : Particularities and challenges

Seminar paper from the year 2007 in the subject Business economics - Supply, Production, Logistics, grade: 2,1, European Business School - International University Schloß Reichartshausen Oestrich-Winkel (SMI), 42 entries in the bibliography, language: English, abstract: Table of ContentsList of Abbreviations iList of Figures and Tables ii1 Introduction 11.1 Problem Formulation and Objectives 11.2 Course of the Investigation 22 Characteristics of Sourcing 32.1 The Global Sourcing Theory 32.2 The Sourcing Process 43 Emerging Markets - Risks and Opportunities of Global Sourcing 74 Case Study in Global Sourcing - The Jungheinrich AG 11Concluding Remarks and Outlook 13Reference List 15List of Appendixes 19Appendix 20Honourable Declaration 221 Introduction1.1 Problem Formulation and ObjectivesGlobal sourcing or sourcing in emerging markets per se is becoming more and more influential, and is a crucial factor of success in many companies. Globalisation is certainly one of the most outstanding phenomena in our today's world.[...]Especially German companies are facing a multitude of obstacles in their domestic market: High salaries and non-wage labour costs, market saturation and elevated production costs, associated with rising product prices, as well as increasing market dynamism and competi-tiveness forcing the companies to constantly adapt to those changes. Many companies have thus seen an opportunity in global sourcing and moved to emerging market economies (EMEs) in the search for reducing their costs (Heakal, 2003).The foremost reason why those companies move to aspiring markets like China, India, South-East Asia, Eastern Europe or Latin America are the lower wholesale prices in those countries (Kalkowsky, 2006). However, most firms have a different approach to the sourc-ing process and consequently varying success amongst them.This study investigates the strategic challenges of German retail companies in conducting and balancing their sourcing activities in order to respond to the particularities and chal-lenges of specific emerging markets. At the same time an analysis on sourcing process op-erations and structures, together with risks and opportunities of different markets is carried out.