Abstract:
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The cost pressure in developed countries has stimulated many companies to shift their
supplier base towards low cost countries. Under this background, the Machinery Export
Division (MED) in Elof Hansson (EH) is also heading for a new strategy, which may imply
the re‐branding of the products sourced from China under a brand owned by EH, so as to
increase the business and strengthen its position in global markets.
The purposes of this thesis are to identify the added value EH can provide in this new
strategy, discover the viewpoints from different actors in EH’s business work regarding the
new strategy and investigate the possible consequences and requirements of EH MED
when implementing the new strategy.
The conclusion indicates that, the primary added values EH can provide are financing,
shipping and market knowledge. Regarding the reflections on the new branding strategy,
the authors discovered that EH is quite positive to re‐brand the products under EH’s brand
while the Chinese suppliers are eager to promote their own brands but also expressed
their willingness to create a new brand jointly owned by EH. Surprisingly, the customers
involved in this study are not so concerned about this new branding strategy.
When it comes to the possible consequences, it can be observed that Brand Effect is found
to have some influence in the decision making process among different actors but not the
dominant element, however. Country of Origin Effect is also proved to play a role in some
markets, but not so strong and can be moderated by some other factors such as a
competitive price and a prestigious brand name. Concerning the requirements, the
authors are convinced that the consensus and strategic cooperation with the Chinese
suppliers are essential for EH’s future success when implementing the new strategy since
they are all aiming for long term and close relationships with business partners, on the
basis of mutual trust and common goals.
Finally, the authors come up with some recommendations for EH MED, such as setting up
local offices in China to take care of the quality control and other activities required in the
new branding strategy, making investments on R&D to enhance the suppliers’ product
development capability, establishing service centres in target markets to guarantee
customer satisfaction, etc. In a nutshell, the authors suggest that EH MED should enhance
its communication with all the actors in its business network, try to fulfil their expectations
on the new strategy and achieve a win‐win situation in the future. |