Business of the Bosch Company - Case Study Example

Bosch situation analysis Table of Contents Introduction 3 Macroeconomic environment 3 PEST analysis of UK 3 Microeconomic Environment 5 Competition 5 Channels 5 Products 6 Target audience 6 USP 7 References 8 Introduction Bosch is one of the largest companies in the automotive parts manufacturing industry. Bosch group was founded by Robert Bosch in 1886 in Stuttgart, Germany. Today’s Bosch started its journey as "Workshop for Precision Mechanics and Electrical Engineering" (Bosch, n.d.). Since its birth the company has been focusing on innovations and social commitments. Today various businesses of Bosch include automotive parts, system supply, Industry services engineering, consumer goods, safety engineering and packaging technology. There are almost 280 subsidiary companies in Bosch group. In 2008 group’s sales revenue was almost 45,127 million euro which is little lower than that was in 2007. This decline in sales might be the result of global financial turmoil. Almost 50% of company’s total sales come from automotive parts sales. Sustainable profit growth is the top most priority of Bosch group’s activity (To Web File, n.d.). This paper analyses the macro and micro environment of the company. Macro environment analysis involves PEST analysis of the UK, one of major countries where Bosch group is operating. PEST analysis includes analysis of political, economical, social and technological environment. On the other hand microeconomic environment analysis involves analysis of competition, channels, product, target audience and USP of Bosch. Macroeconomic environment PEST analysis of UK PEST analysis refers to the analysis of Political scenario, Economical, Social and Technological environment of a particular country. Organisations can have clear understanding regarding the external environment of the organisation by the help of PEST analysis. Political scenario: UK government is constitutional monarchy type. There are large numbers of political parties in the country. Some of them worth mentioning like Democratic Unionist Party, Labour Party, Liberal Democrats etc. Apart from these political parties there are many political pressure groups which greatly influence country’s political scenario. Few of them are Campaign for Nuclear Disarmament, National Farmers Union, Confederation of British Industry etc. Prime Minister Gordon Brown is the chief of the government. He is also the head of Labour party. In UK prime minister is responsible for appointing the cabinet. Economical state: UK economy is one of leading financial centre and trading power in the global economy. It is one of the very few trillion dollar economies not only in Europe but in the whole world. Over the past few decades public ownership is significantly reduced in UK. UK produces most of its food requirements. The country is very much agriculture intensive. There are large reserves of natural gas, coal and oil in UK. In 2008 UK’s Gross Domestic Product was approximately 2.67 trillion. In this 2.67 trillion almost 4% was the contribution of energy sector. Recent global financial turmoil has badly affected the country’s economy and it has been found that till February 2009 almost 1.97 million people lost their job and country’s GDP reduced to $1.8 trillion (BBC NEWS-a, 2009). Currently UK economy is trying hard to recover from global financial meltdown. Central bank rate which was 4.63% at the end of 2008, is now almost 1%. Social condition: As of July 2009 total population of the country is approximately 61,113,205. Most of the population (approximately 90%) of the country lives in urban area. There are several ethnic groups in the country. Almost 83.6% of population in the country is English, 8.6% is Scottish and 1.8% is Indian. According to census of 2001 UK’s 71.6% people are Christian and 2.7% are Muslim. Main language in the country is English. 16.7 percent of total population of UK falls in the age group of 0-14 years. Whereas age of 67.1 percent of population falls in the range of 15 to 64. Almost all the people in the country are officially literate (99%). Technological sectors: Technology is heavily used by the individuals and corporate in UK. Technologically the country is becoming more advanced over the passage of time. This advancement is further driven by the privatisation which is occurring at a high rate (Central Intelligence Agency, n.d.). Microeconomic Environment Competition Bosch group operates in a highly competitive environment. Group’s major competitors include Delphi Corporation, Siemens Automotive AG. Continental AG., DENSO Corporation etc. Automotive parts manufacturing industry is basically a complex industry as the demand is dependent on the sales of new cars. But new car sale is dependent on various factors starting from interest rate to car brand. Small automotive parts companies can easily compete as they focus on lower number of products, but company like Bosch who deals with wide range of products, has facing complex challenges in the competitive environment. Each and every player tries to differentiate itself from its competitors. Channels Bosch has strong distribution channel with the help of which company gain competitive advantage. Recently Bosch has acquired 68.70% share of Aleo Solar. According to the president of Bosch solar energy, Holger von Hebel, this increase in stake would strengthen company’s distribution channel (Hughes, E. 04 November 2009). Products Bosch group along its large number of subsidiary companies offer a wide range of products. The company deals with various automotive parts, consumer goods, home appliances, safety solutions. Bosch deals with building technology and consumer goods with thermotechnology, power tools. The company caters to the household market with its joint venture with Siemens in BSH (Bosch and Siemens Hausgeräte). Bosch has classified its products and services into three major parts, automotive, at home and industry & trade (Bosch, n.d.). As far as automotive is concerned Bosch manufacture automobile parts, offers car service garage, innovates testing technology for garages. There are almost 14000 car service garages of Bosch all over the world. As far as ‘at home’ products are concerned Bosch produces various power tools, garden tools, home appliances, hot water and heating solution. On the other hand various industrial and trade products of Bosch include communication centres, security systems, power tools especially for professionals, photovoltaics and packaging technology. Various security systems offered by Bosch include Video surveillance systems, intelligent video analysis, Intrusion alarm systems, Fire alarm systems, Access control systems, Fire alarm systems, Conference systems, Management systems etc. (Bosch, n.d.). Target audience Target audience of Bosch varies with its different products and services. The company target both individuals and industrial customers. Individual customers are targeted mainly for its ‘at home’ products. Bosch car service is targeted to the car owners and drivers. Bosch target both car manufacturers and car owners for its automotive parts. Different car service garages are targeted for its innovative testing technology. Power tools are targeted to both individuals who are DIY enthusiasts and to professionals like craft man. Various security systems offered by the company are targeted to both individuals and industrial customers. USP USP stands for unique selling proposition. Unique selling proposition differentiates a company from its competitors. Different company has different USP. Being such a large and old company like Bosch also has USP. Bosch’s USP is innovation. Over the years the company has gained its competitive advantage based on its innovative capacity. In the past Bosch invented anti lock breaking system, electronic stability program, traction control systems etc. References Bosch, No Date, Company History, [online] Available at: http://www.bosch.com/content/language2/html/2859.htm [Accessed on December 15, 2009] Bosch, No Date, Our product portfolio includes, Security Systems, [online] Available at: http://www.bosch.com/content/language2/html/3309.htm [Accessed on December 15, 2009] Bosch, No Date, Products and services, [online] Available at: http://www.bosch.com/content/language2/html/3283.htm [Accessed on December 15, 2009] Central Intelligence Agency. No date. The World Fact Book. [Online]. Available at: https://www.cia.gov/library/publications/the-world-factbook/geos/uk.html [Accessed on December 15, 2009] Hughes, E. 04 November 2009, Bosch acquires majority stake in aleo solar; six board members walk, PV Tech, [online] Available at: http://www.pv-tech.org/news/_a/bosch_aquires_majority_stake_in_aleo_solar_as_six_board_members_walk/ [Accessed on December 15, 2009] To Web File, No Date, BOSCH Logo and Trademark, [online] Available at: http://www.2wf.org/b-logos/bosch.html [Accessed on December 15, 2009] Read More