Purchasing Behavior and Buying: Valeo

Topics: Supply chain management, Supply chain, Marketing Pages: 11 (3217 words) Published: February 15, 2011
Purchasing behavior and buying | Valeo
Table of contents

1. Introduction
2. Problemdefinition and researchquestion
3. Theory description
4. Recommendations and statements
4.1 Student 1
4.2 Student 2
4.3 Student 3
4.4 Student 4
5. Group recommendations
6. References

1.Introduction to the situation or problem

This assignment treats the topics of industrial purchasing and buying behavior, and we will present the company Valeo – automobile component supplier – as a case example to apply the knowledge gained during the Business Marketing course. For this assignment we will focus on the filter product line, which is part of the Climate Control Division of Valeo Group (VCC). First we will explain the general profile of the company in chapter 1.2 and in chapter 1.3 we will explain the Climate Control Division. 1.2Company profile: Valeo

Valeo is a French automobile component manufacturer founded in 1923. Their headquarters are located in Paris, France. Valeo has about 51.200 employees spread out over the world. The company is split into 3 domains and 11 product families managing 121 production sites, 61 Research & Development centers and 10 distribution platforms in 27 countries. The Valeo Group is divided into 3 main domains and 11 product families: 1.Driving Assistance:

oInterior Controls (VIC);
oLighting Systems (VLS);
oWiper Systems (VWS);
2.Powertrain Efficiency:
oEngine Management Systems (VEMS);
oElectrical Systems (VES);
oEngine Cooling (VEC);
oCompressors (VC);
oTransmissions (VT);
3.Comfort Enhancement:
oSecurity Systems (VSS);
oClimate Control (VCC);
oElectronics & Connective Systems (VECS)
Valeo customers are BMW, Daimler, Fiat, Ford, General Motors, Honda, Opel, Porsche, PSA Peugeot Citroën, Renault/Nissan-Allianz, Toyota, Volkswagen Group. Valeo’s main competitors are Bosch, Delphi, Denso, TRW Automotive and Visteon. 1.3Valeo Climate Control (VCC) Division

Climate Control (VCC) is one of Valeo’s product families in the comfort enhancement domain. VCC develops ventilation and air conditioning (HVAC) and “intelligent” heating systems for automobiles. The goal is to enhance drivers’ comfort in all possible circumstances with limited use of energy. VCC is operating 16 plants, 4 research centers and 6 development centers in 14 countries. In 2008, VCC made 1.349 million Euros in sales. VCC turnover in 2006 was 1.600 million Euros, 15% of the total turnover of Valeo Group. The biggest competitors of VCC are Freudenberg, MannHummel, Sogefi, Malhe, Hesla and Autres.

2.Problem description and research question

For our case we will concentrate on one product among the air quality products, the combined filter. This filter is composed of a media which collect particles and the charcoal layer. This particle filter provides a protection against polluting gases and odors. Valeo is outsourcing the raw material (string of polymer fibers) to make the media, and is able to make the charcoal laye internally.

Problem description: Actually VCC is sourcing the material to manufacture the car filter, buying it from an outside supplier. There are not many raw material suppliers that have the ability and technology to manufacture high quality strings of polymer fiber (the raw material to manufacture the filter). Moreover there is only one main supplier worldwide of the raw material. In today’s competitive environment, filter manufacturers are facing the same challenges as any other business : they have to compete against low-cost competition from developing countries like China. Raw materials prices have increased therefore the cost of filters has also increased. To prevent the price from increasing, VCC is focusing all efforts in purchasing high volumes of raw materials. It is important that Valeo starts looking for new raw material suppliers in order to broaden their options in the supply chain to improve the competitiveness between them and...

References: Moller.K., Industrial Buying Behavior of Production Materials: A Conceptual Model and Analysis. Working Paper, Helsinki School of Economics Publications, Series B-54, Helsinki. 1981
Dwyer, Robert F., and Tanner, John F., Jr., (2009), “Business Marketing: Connecting Strategy, Relationships, and Learning”, Fourth Edition, McGraw-Hill Irwin, Burr Ridge, IL., USA. ISBN 007-126343-6
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