Kinakontakt – flytt eller expansion? : Så utvecklar östgötska teknikföretag sina relationer med Kina
Abstract (Summary)Because of the media coverage it is probably clear to all that companies in Sweden are affected by the astonishing growth currently at hand in China as well as the development in China is affected by actions taken by Swedish companies. To get a more complete understanding of this development the Swedish engineering association has asked us to investigate the relations between Swedish engineering companies and China. The purpose is to examine to what extent and why these relations exist and how they affect the companies. The study has been limited to study only companies in Östergötland. In the study it is shown that the investigated companies do have business relations with China, importing is more important than exporting and quite a few companies have more advanced business engagements in China.– Why do these companies have contacts with China? This study shows two basic reasons behind these contacts. The first is a pressure on prices and the second is proximity to customers. The companies that are in China to lower their prices have to a large extent outsourced production to Chinese companies or have switched from western to Chinese suppliers. This is an action that is feasible even for small companies without previous international experience. On the other hand, companies that are in China to achieve proximity to their clients tend to set up production plants in China as many of their customers have already done so. To do this requires far more resources than outsourcing and many companies experience limitations in their management capacity. We also see that the companies’ motives often change over time.– How do these contacts affect the Swedish companies? Many of the companies who have outsourced parts of their production tend to be more focused on services, which does enable them to perform more advanced processes and saves them from becoming extinct due to increased price competition. In the long run however, they risk losing necessary competence and capacity as they lower their investments and their key personnel retire.Companies that are in China in order to sell in China are affected positively in Sweden as well. It is often necessary to expand business in Sweden in order to manage what is done in China and the presence in many markets make the companies’ orders less volatile.To achieve the results of this investigation we started by studying existing literature and conducting a series of interviews with people with relevant knowledge regarding the subject. Based on this information we conducted a survey that was statistically analyzed. These results where afterwards completed with case studies of several of the investigated companies. The investigation was finalized with a visit at some of the Swedish companies’ production plants in China in order for us to verify our conclusions.
Source Type:Master's Thesis
Date of Publication:12/11/2006