Bosch Market description for expansion in Germany for Start Stop Push button product

1. International Management
BOSCH : START STOP
STARTER
EXPERIMENTAL EXERCISE : 2
Geo Joseph

2. Bosch : Target Germany as
expansion
 As providers of Start Stop Starters this presentation covers
the first outlook towards market research of the target
Country : Germany
 This is done through analysis of –
1. Political
2. Economical
3. Social
4. Legal
5. Demographic
6. Environmental
7. Technological
8. Market Landscape
9. Customers and Competitors

3. Political
 Germany is a federal republic. The lawmakers at
the national level are the Bundestag, elected
every four years by popular vote and the
Bundesrat , which consists of 69 representatives
of the 16 states
 Thereby holds 3 level government
 Federal – States –Local (All taking care of
health, education, power, business tax)

4. Economical
 Germany holds 40 of the fortune 500 companies, with
 GDP (purchasing power parity):
 $3.123 trillion (2012 est.) country comparison to the
world: 6

 GDP (official exchange rate):
 $3.367 trillion (2012 est.)

 GDP - per capita (PPP):
 $39,100 (2012 est.) country comparison to the world: 29

 GDP - composition by sector:
 agriculture: 0.8%
 industry: 28.1%
 services: 71.1%
The economic
analysis
revealed the
raise in the
buying
potential
The growing
services sector

5. Environmental:
 Environmental effects of carbon capture and storage (CCS)
implementation strategies on a national level. The results
identify the future role of lignite and hard coal in German
power production.
 Current Issues :
 Emissions from coal-burning utilities and industries contribute to
air pollution; acid rain, resulting from sulphur dioxide
emissions, is damaging forests; government working to meet EU
commitment to identify nature preservation areas in line with the
EU's Flora, Fauna, and Habitat directive
 Europe’s largest and world’s 6th largest carbon emitter
 After signing Kyoto protocol
 • 22% reduction in carbon emissions
 • 39% of wind energy of worlds requirement
 • Committed to use renewable energy source in future

6. Technological
German companies represent 15.6% of research
advanced goods worldwide, ranking 2nd in the world
(following US)
 The Federal Government provides funding
through annual grants or endowment capital
 In 2010 the Federal Ministry of Economics and
Technology created a budget of 2.3 billion euros for
technology research and development


7. Pollution Regulations :
 The monitoring of air quality in Germany is
regulated by the Federal Emission Control Act
(BImSchG).
The Europe-wide limit values for particulate matter
(PM10) that have been in force since 2005 under
the Federal Emission Control Act.
 Limit Values :
 The PM10 annual mean value must not exceed 40
µg/m³.
 The PM10 daily mean value must not exceed 50

8. Legal : Civil Law
 More powers at state level, whereas federal police intervene only at national &
international level.
 • THE ADMINISTRATION OF JUSTICE IS DIVIDED INTO FIVE BRANCHES:
 - Ordinary,
 - Labor,
 - Administrative,
 - Social and
 - Financial courts.
 This legal stability attracts foreign companies and is to the benefit of investments and
entrepreneurial activity in germany
 Taxes :
 Value added tax: 19%
 Value added tax for food: 7%
 Corporate tax: 15%

9. Global Economic
Exports:
$1.492 trillion (2012 est.)
The German economy - the fifth largest economy in the world in PPP terms and Europe's
largest - is a leading exporter of machinery, vehicles, chemicals, and household
equipment and benefits from a highly skilled labor force.
•Trade : Imports $966.9 billion (3rd highest in the world)
Machinery, vehicles, chemicals, foodstuffs, textiles, metals
(Import Partners: Netherlands 12.71%, France 8.3%, Belgium 7.19%, China 6.89%, Italy
5.88%, UK 4.76%, Austria 4.55%, US 4.25%, Switzerland 4.07% )

10. Start Stop system used by various
car makers
Citroën
BMW
Mercedes
Toyota
Renault
Mazda
Honda
Fiat Group
Volvo
Mahindra & Mahindra
Tata Motors
Opel
Ford
Kia
Hyundai
Volkswagen

11. Competitors
 DENSO
 Delphi Automotive Systems, LLC
 Visteon Corporation
 Molins PLC
 Valeo
 INA (Schaeffler Technologies)

12. Markets
 The automotive industry is the largest industry
sector in Germany.
 Statistics of 2011 : Car sales with a turnover of
EUR 351 billion – around 20 percent of total
German industry revenue
 German passenger car and light commercial vehicle
manufacturers recorded foreign market- generated
revenue of EUR 194 billion for the year 2011. domestic
market generated revenue of EUR 80 billion was
created.

13. Markets Contd….
 German automobile manufacturers produced
more than 12.9 million vehicles in 2011 –
equivalent to 17 percent of worldwide
production.
 Germany is the European car production
leader: some 5.9 million passenger cars
(and more than 439,000 trucks and buses)
were manufactured in German plants in 2011

14. Part 2 Exercise : Bosch
SWOT analysis

15. Denso
 Net sales totaled 3,580.9 billion yen (US$38.1 billion), a 13.5
percent increase from the previous year. Japan
 Europe accounted for just 14 percent of its revenue
 Product claims to improve fuel economy by 4-8% compared to
conventional starters from the previous year.
 DENSO operates in 36 countries with 130,000 employees
 9.4 percent of consolidated sales in R&D activities.
 Recent Price fixing scheme allegation effects the Brand Image

16. Valeo
 Valeo revenue 10.9 bn, 68000 employees, Paris
 Europe accounts to 50 plus percent of its revenue
Year Bosch Denso Valeo
2009 38714 24559 7499
2010 47259 23262 9632
2011 51494 24472 10868
Sales Revenue :

17. Bosch
 Revenue of 52.3 Bn with 303000 employees
 Bosch has more than 350 subsidiaries across over 60
countries and its products are sold in around 150
countries
 Germany alone accounts to 23 percent share of its
revenue
 7.3 investment in RnD with a great base in patent
generation

18. SWOT
Strengths
• Most wide presence with global
partners across the globe
• Strong hold in the German market
with strong brand identity
• Home based thereby deep know how
of market and culture
Weakness
• Loosing customer due to new
intervention in market with
comparable products by other
providers
• More diversion to other sector might
distract their focus
• Labour expensive as compared to
others
Opportunity
• Global Partners and suppliers
• Still large market within Europe
Threats
• Growing penetration by mainstream
competitors with stronger innovative
strength (Denso, Valeo both with high
RnD strategy)
• Growth of Global car sales in
Germany that are partners with
competitors

19. Action implemented
Strengths
• Grow the identity with more partnership
plans among other automotive
manufacturers
• Stronger Labour force and economies
of scale help them
Weakness
• Stronger Customer oriented
programmes
• Expanding solutions with integration of
existing products there by increasing
offerings
• Strong and skilled labour with regular
development programmes give better
and reliable product
Opportunity
• Can ensure their growth within
Germany by local expansion
• Can be more cost effective due to
several favouring factors
Threats
• The local support and German culture
of national belonging
• Relations with global car manufacturers
in Germany and local presence can be
cost effective as compared to other
competitors