Sourcing in emerging markets

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), language: English, abstract: Table of Contents List of Abbreviationsi List of Figures and Tablesii 1Introduction1 1.1Problem Formulation and Objectives1 1.2Course of the Investigation2 2Characteristics of Sourcing3 2.1The Global Sourcing Theory3 2.2The Sourcing Process4 3Emerging Markets - Risks and Opportunities of Global Sourcing7 4Case Study in Global Sourcing - The Jungheinrich AG11 Concluding Remarks and Outlook13 Reference List15 List of Appendixes19 Appendix20 Honourable Declaration22 1Introduction 1.1Problem Formulation and Objectives Global 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.