Study On Purchasing Strategy Of Jinhu Tire Company

In recent years, with the rapid economic growth of China and the development of themanufacturing industry, sales of the automobile industry in China increases quickly. Theexpanding market demand makes automobile manufacturing companies continue to expandtheir production capacity, which leads to the sharp rise of output in tire production enterprises.Coming into the2012, the signs of slowdown appear in the economic growth rate of China.The public opinion shows prominently that the automotive industry is in the risk ofovercapacity. The auto industry sales were influenced to a certain extent, which result in theincreasingly market competition among tire production enterprises.In the fierce market competition, effective cost control strategies can enable enterprises tooccupy a favorable position in the contest with the same industry opponents. As tiremanufacturing enterprises, the purchase of rubber which is used in the production has animportant impact on production cost control. Procurement activities as a very importantorganizational function of business activities, the study on its cost and strategy for theenterprise has an extremely important significance.In this paper, it starts from the reality of Jinhu Tire Company, discussing and analyzing themarket environment, cost analysis, and procurement strategies of the rubber procurement. Inthe aspects of market analysis, this paper introduces the market situation of major exporters ofnatural rubber, the circumstance of rubber imports and exports and the domestic marketdevelopment in China. In the cost analysis section, the paper focuses on the analysis andstudy of key factors that affect the price of natural rubber and synthetic rubber. Through theanalysis of the factors that impact on prices, and with elaboration of international procurementtrends, it worked out the fundamental strategy for rubber procurement. At the same time, italso highlights a key factor of procurement activities, the strategies and methods of logisticscost management. This paper aims at enabling enterprises to understand and improve theprocurement cost control and procurement strategy formulation through the above analysisand research and providing reference to the study on business strategy for enterprises.