Multiple Forces in Component Localisation in China

Successful localisation of component sourcing is of key concern to the manufacturing subsidiaries of MNCs. However, a range of factors both internal and external to the firm can act as forces for or against successful component localisation. Based on a study of 27 UK-invested MNC subsidiaries in China -- the world's most important emerging market -- this paper explores the forces acting for and against component localisation and identifies the implications for sourcing strategy and supply chain management. Analysis of our data gives rise to an analytical framework that can help guide firms in sourcing strategy generation and implementation.