The organizational forms of companies have undergone a transformation from a hierarchical structure towards a network based form. The network form has proven to be the best structure for the current competitive environment. With technological advancements in almost every area it has become almost impossible to produce everything “in-house” and still stay competitive. This has caused an increase in the degree of outsourcing parts of the value chain to suppliers. Therefore, the competition has now moved from between companies to between entire value chains. For a manufacturing company, with a large part of the value chain outsourced to suppliers the task of setting up production in a new market brings forth new questions such as: is it possible to move an entire value chain to a new country? The purpose of this thesis is to explore what factors influence the construction of a strategic network of suppliers of a manufacturing company when entering a new market. The purpose was divided into two research questions: How is the internationalization process performed in a strategic network situation and what factors influence the construction of a supplier structure in a world based on networks? Three multinational companies with a large part of their value chain outsourced to suppliers were chosen for interviews: Ericsson, Scania and Volvo Truck Corporation.The internationalisation process of a manufacturing company is conducted as follows: the first step is the decision to enter a new market followed by a rather quick set up of a production plant. In this initial phase of the establishment, everything or almost everything is imported which is possible due to a global network of suppliers. The last step depends on the strategic objective with the establishment, either importing will continue or a complete organisation…
Contents
1 INTERNATIONALIZATION IN A NETWORK BASED WORLD
1.1 INTRODUCTION
1.2 FROM HIERARCHY TO NETWORK
1.3 PROBLEM DISCUSSION
1.4 PURPOSE
1.5 RESEARCH QUESTIONS
1.6 DEMARCATIONS
1.7 STRUCTURE
2 OUR PATH TOWARDS REACHING A RESULT
2.1 THE SCIENTIFIC APPROACH PATH
2.2 OUR PATH DURING THE PROCEDURE
2.3 PRACTICAL PATH
2.3.1 Analysing the findings
2.4 CRITICISM OF OUR CHOSEN PATHS
2.4.1 Validity
2.4.2 Reliability
2.4.3 Generalisation
2.4.4 Criticisms of Sources
3 THE INTERNATIONALIZATION PROCESS IN THEORY
3.1 SUPPLY CHAIN OR STRATEGIC NETWORK?
3.1.1 Managing the Supply Chain as a Network
3.2 PURPOSE OF GOING ABROAD
3.2.1 Market Seeker
3.2.2 Resource Seeker
3.2.3 Minimizing the Risks
3.3 INTERNATIONALIZATION PROCESS
3.3.1 Internationalization from a Network Perspective
3.3.2 Emerging Markets
3.4 THE PARADOXES
3.4.1 High vs. Low Involvement
3.4.2 Concentration vs. Dispersion
3.4.3 Control vs. Autonomy
4 INTERNATIONALIZATION PROCESS IN PRACTICE
4.1 PRESENTATION OF THE INTERVIEWEES AND THE COMPANIES
4.2 TIER STRUCTURE
4.3 INTERNATIONALIZATION PROCESS
4.4 THE PARADOXES
4.4.1 High vs. Low Involvement
4.4.2 Concentration vs. Dispersion
4.4.3 Control vs. Autonomy
5 REACHING THE END OF THE PATH
5.1 NETWORK ASPECTS
5.2 THE INTERNATIONALIZATION PROCESS TODAY
5.3 THE PARADOXES
5.3.1 High vs. Low Involvement
5.3.2 Concentration vs. Dispersion
5.3.3 Control vs. Autonomy
6 THE END OF THE PATH
6.1 – HOW IS THE INTERNATIONALIZATION PROCESS PERFORMED IN A STRATEGIC NETWORK SITUATION?
6.2 – WHAT FACTORS INFLUENCE THE CONSTRUCTION OF A SUPPLIER
STRUCTURE IN A WORLD BASED ON NETWORKS?
6.3 FULFILLING OUR PURPOSE
6.4 FURTHER INTEREST OF STUDY
7 BIBLIOGRAPHY
8 APPENDIX
Author: Backman, Jenny, Modorato-Rosta, Charlotte
Source: Linkoping University
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