eThesis - School of Business electronic theses

China has been an attractive purchasing destination for many years mainly due to the cost factors, but recently there seems to be a trend for Western companies to seek alternative solutions from other emerging markets. It is thus relevant to examine what kind of changes have taken place in the buyer-supplier relationships with the Chinese partners and what kind of roles does the intermediary play. The aim of this study is to analyse the development of buyer-supplier relationships between Western companies and Chinese suppliers and the contemporary role of intermediary.

This is a qualitative study and case study research is used as the main research strategy. The primary data was collected by conducting semi-structured interviews. Five companies (three intermediaries, one Chinese supplier, and one Finnish buyer) were interviewed for the purpose of the study. In addition to face-to-face and Skype interviews, additional questions were sent by emails to some of the interviewees after the interviews. Company websites, social media sites and company documentation were used as the secondary data to triangulate the research results.

The findings of the study indicate that long-term view, personal relations and mutual benefit are important factors in building and maintaining successful business relationships. Lack of control, inconsistency of supply and the "silence issue" appear to be the biggest challenges in the interactions. The relationships between the intermediaries and the Chinese suppliers tend to become more inter-personal over time which helps to decrease the cultural distance. Intermediation as a strategy does not seem to be limited to the initial stage of purchasing and intermediary has been evolving into a more significant role in the supply chain. The quality level in China today has increased greatly and it is not uncommon for Western companies to source critical products from China. Various efforts from the Chinese suppliers and Western companies have been made in order to create more efficient knowledge transfer systems.