Question

Globalization represents the opportunity to deliver improved value to end customers by developing world-class supply relationships in terms of cost, quality, delivery, and performance. More and more buyers have to learn to develop a supply base in more than one country in order to remain competitive in the complex and dynamic global business environment.  Identify a company of your choice (in a vehicle- manufacturing industry) on which you will base your study.  Write a detailed report on the above statement considering the following questions:

Examine the various types of contracts available to your company (a vehicle- manufacturing company) when dealing with international suppliers and advise them on which contracts would be most beneficial to achieve a competitive advantage.

Answer 1

Indeed, globalisation has offered opportunities to improve value chain in the developing as well as the developed countries. In the vehicle manufacturing market, I would choose one of the most popular vehicle manufacturing company of India (Name not given). The company is around 40 years old company with presence all over the country. The manufacturing units are located throughout the country in total 43 major cities. The various types of contracts available to the company includes both the production of the final product (vehicle) as well as the supply of intermediate goods required in the process of the value chain of manufacturing vehicles. When dealing with the international suppliers, the company found that the most important thing is to negotiate beneficial contracts i.e. mostly the imports of intermediate goods. For some parts, India may not have competitive advantage, which may be called for imports and parts in which India enjoys specialisation that can be exported for win-win situation for all.