Introduction : Topic and Bosch Environment Analysis & Potters 5 Force theory SWOT of Bosch & Their Core Competencies Value chain & Corporate & Business Level Strategy. Future budget Recent Trends impacting Bosch Alternative Strategy Conclusion

    

Product for use in industry and business, rather than by people for their own use Batteries Hinges Refrigerants Bearings

    

Germany : 1886 Technology-based corporation World's largest supplier of automobile components Vision : Creating value sharing values In fiscal 2010, Bosch generated regional sales of $8.8 billion, an increase of 27 percent to the prior year (2009: $7.3 billion)


   

Core activities
Automotive technology Industrial technology Consumer goods and building Engineering and IT Services

Sales by Business Sector

Consumer Goods and Building Technology 27% Automotive Technology 59% Industrial Technology 14%

Consumer Goods and Building Technology , 63792

Other , 9260

Industrial Technology, 43415

Automotive Technology, 167040

POLITICAL

The automobile industry has been delicensed There are no restraints on import of components Promote foreign direct investment (FDI) in the industry.

ECONOMIC

Fastest growing sectors in the Indian economy. India has become a net importer of auto components

SOCIAL

Companies researching in developing parts to use energy efficiently and reduce carbon emissions Companies are getting ISO 14001 certification

TECHNOLOGICAL

The auto components industry is a very technology-intensive industry The organized sector has increased focus on quality

POTENTIAL ENTRANTS
De-licensing Moderate

SUPPLIERS
Raw material cost Low Bargaining power

BUYERS
OEM market is very competitive Very high

SUBSTITUTES
Organised component players Threat is very low

INDUSTRY RIVALS
Competition is moderate Market structure is fragmented

SWOT ANALYSIS

Strength
Hierarchical, Centralized leadership structure Authoritarian leadership style Facilitates control over activities conducted worldwide

Competiveness ,Responsibilities, Decision making are clearly defined Enables it to provide innovative products

Can enter new markets and react to external environment quickly Size and huge presence in today globalised world

Strength Contd.
Biggest automotive supplier

Present in Broad range of sectors such as electronics, household appliances, security systems Enables it to minimize it risks of a decreasing market in one sector

Operational level: Streamlined inventory and redesign computers Reduces complexity of minimizing risks Building strategic networks with main suppliers Organized assembly line

Weakness
Hierarchal structure origined from Germany Practiced in all countries it is involved Sometimes creates personnel conflict

Additional cost is incurred due to high level of bureaucracy and formalization

Hierarchy type structure results in lack of motivation, negativeness, lack of feedback

Weakness Contd..
Rising production costs due change in prices of raw materials

Can loose its fast paced growth due to lack of resellers and delivery firms Direct selling methods

Opportunities
The Indian Automotive Sector is expected to grow 13% per annum to reach around $150 billion from $130 billion by 2016 Demand growth 14% CAGR makes it one of the fast growing markets

All cost have seen in reduced except for oil and power. Reduction in prices of raw materials have improved margins

Relaxation of norms in the small scale sector in the future will help in speeding about growth in this sector

Opportunities Contd
Huge labour force 4 lacs graduates every year there is tremendous potential Skilled labour cost is amongst the lowest in the world

Linked to the automobile sector Factors such increased public spending, low interest rates, general increase in per capita income points to high growth in automobile sector Fresh fund infusion has improved productivity

Export possibilities to neighboring countries

Threats
Lower margins Highly competitive , increased competition will result in reduced in reduced prices and increased costs Burden will fall on ancillary manufactures

Consolidation A manufacturer will want to source from fewer sources in the future to consolidate their business

Trade agreements The trade agreements signed by India with ASEAN countries means foreign manufactures will pay lower duties than Indian counterparts

Core Competencies
Technological competency

Quality

Alternative energy

Bosch

High Market value

Service

VRIN Analysis Of Strategic Capabilities

Valuable: High quality Cleaner and economical Rare: Innovative products Most manufactures are in tier 3 and tier4 Bosch is in tier 1

Non Substitutable High technology Highly efficient

Costly to imitate Years of R&D Huge investment

Infrastructure

Centralized cost control

Human Resource Management

Intensive training centers, stable job, encourage employees to look for newer ways Heavy investment in R&D, focus on quality and cleaner products, learning and experience

Technology

Procurement
Inbound Logistics Best quality products from many suppliers

Amplified purchasing in low cost locations

Primary Activities

Operations Focus on BPS (lean manufacturi ng concept)

Outbound Logistics Direct supply to customers

Marketing & Sales Marketing of new products

Service Efficient customer service

 

Innovation, Independence & Integrity. Aim Be the world market leaders & major player in all the companys business sectors. To achieve this goal by strong marketing of new products & further investment in R & D to innovate continuously. Key Role - Efficient sales and customer service.

Business Divisions
Automotive aftermarket

Strategy / Characteristics
Guarantee the highest-possible level of service and quality for the customers in 132 countries round the world, round-the-clock. Offer customers advanced technology, quality and excellent services. The continual improvement of driving security and comfort supports. Contribute to making vehicles cleaner and economical. Manufacture modern gasoline-engine systems that contribute to making vehicles more dynamic, cleaner and more economical. Top class technology, high quality products and services. Top class technology, high quality products and services. Work continuously to make driving more cost-effective, easier, and safer, despite increasing complexity. Build to help engine achieve the power and performance it was designed to deliver.

Chassis System Brakes

Diesel Systems Gasoline Systems

Car Multimedia

Spark Plugs and Glow plugs

  

Innovation Leadership Cost Leadership Balance between innovation leadership & cost leadership is the Bosch Production System (BPS)=Lean manufacturing.

Due to R&D technical advances  Anti-lock braking systems  Electronic Stability Control  High-pressure diesel injection  Parking assist systems

Due to Global Vision-developed opportunities across the world.

Boschs approach to globalisation :  Early entry  Long-term vision, &  Patience and Stamina to invest in innovation well in advance of market rewards.

Bosch applies its two-pronged business strategy at a global level in the following ways
   

Identify and respond to megatrends in the different parts of the world . Think Global, but do not forget local requirements . Pursuing a right site strategy for globalisation. Strategically align purchasing on a global basis .

     

Period of transition The worlds passenger car fleet will double by 2035 Passenger safety Stricter emission norms Sustaining growth Increasing share in after market

    

Expand aggressively to tap opportunities Develop green technology products Continue cost leadership Focus on exports Focus on low-cost automobiles

     

Focus on distribution network Improve supplier relationship Service Level Improvement Customer Interaction Enhancement Growing Inorganically Acquire Small Players

Strategy Expand Aggressively to tap opportunities Innovate, Increase R&D spending Develop green technology products Lead on costs Benefit from states tax-holiday scheme Derive cost benefits through workforce Leverage IT to lower costs Focus on exports Focus on distribution network Focus on low-cost automobiles Acquire smaller players

Reasons Market is very large and diverse - O But any no of players can be absorbed to accommodate buyers needs - T Brand Image as leader in innovation - S Well developed R&D centres - S Future trends ask for greener solutions - O Tighter compliance norms - O Majority of business through OEMs - O Pressure due to Union Budget - T Uttarakhand, Gujarat, Pune fast emerging as an auto hub with leading companies deciding to set up units there - O Investments about US$ 640 million in Uttarakhand - O Educated, skilled and English speaking workforce - S Seen as a authoritative company, needs to improve on its perception - W Increased significance of knowledge management - O Highest margins - O Locational advantage - O Distribution not well developed inspite of having manufacturing locations W Auto manufacturers investing heavily in low-cost automobiles - O Indian auto component industry highly fragmented (23% by unorganised player) - O

  

News Article : http://online.wsj.com/article/SB1000142405274870390980457 5122832895561158.html?mod=WSJ_latestheadlines http://www.boschindia.com http://www.bosch.com Budget : http://www.domainb.com/economy/budget/union_budget_2010/sectors/20100227 _automobile.html

Presented By: 04- Russel Dsouza 09- Debasis Karmokar 12- Jenita Nazareth 19- Aleta Rodrigues 22- Anup Gandhi 39- Jaki Sayyad