Global product development strategy at Bosch: Selecting a development site for the new low-cost ABS platform SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of Global product development strategy at Bosch: Selecting a development site for the new low-cost ABS platform
The case is set in February 2008. Stefan Tammler, head of the chassis systems control division (CC) of Robert Bosch GmbH (Bosch), has to make a decision about the location for the development of the new anti-lock braking system (ABS) for the low-price vehicle (LPV) segment. The case begins with a short introduction outlining the situation. It gives a detailed background on Bosch, especially the chassis systems control division. The main part of the case focuses on the global product development strategy, highlighting especially the two development sites in Suzhou, China, and Yokohama, Japan. Furthermore, the Chinese car market is described in detail, with special emphasis on the LPV segment.
Swot Analysis of "Global product development strategy at Bosch: Selecting a development site for the new low-cost ABS platform" written by Martin Kupp includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Bosch Lpv facing as an external strategic factors. Some of the topics covered in Global product development strategy at Bosch: Selecting a development site for the new low-cost ABS platform case study are - Strategic Management Strategies, Strategy and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Global product development strategy at Bosch: Selecting a development site for the new low-cost ABS platform casestudy better are - – increasing transportation and logistics costs, supply chains are disrupted by pandemic , cloud computing is disrupting traditional business models, competitive advantages are harder to sustain because of technology dispersion, geopolitical disruptions, technology disruption, increasing household debt because of falling income levels,
increasing commodity prices, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Global product development strategy at Bosch: Selecting a development site for the new low-cost ABS platform
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Global product development strategy at Bosch: Selecting a development site for the new low-cost ABS platform case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Bosch Lpv, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Bosch Lpv operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Global product development strategy at Bosch: Selecting a development site for the new low-cost ABS platform can be done for the following purposes –
1. Strategic planning using facts provided in Global product development strategy at Bosch: Selecting a development site for the new low-cost ABS platform case study
2. Improving business portfolio management of Bosch Lpv
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Bosch Lpv
Strengths Global product development strategy at Bosch: Selecting a development site for the new low-cost ABS platform | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Bosch Lpv in Global product development strategy at Bosch: Selecting a development site for the new low-cost ABS platform Harvard Business Review case study are -
Sustainable margins compare to other players in Strategy & Execution industry
– Global product development strategy at Bosch: Selecting a development site for the new low-cost ABS platform firm has clearly differentiated products in the market place. This has enabled Bosch Lpv to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Bosch Lpv to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Bosch Lpv in the sector have low bargaining power. Global product development strategy at Bosch: Selecting a development site for the new low-cost ABS platform has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Bosch Lpv to manage not only supply disruptions but also source products at highly competitive prices.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Bosch Lpv digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Bosch Lpv has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Organizational Resilience of Bosch Lpv
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Bosch Lpv does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High brand equity
– Bosch Lpv has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Bosch Lpv to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– Bosch Lpv is one of the most innovative firm in sector. Manager in Global product development strategy at Bosch: Selecting a development site for the new low-cost ABS platform Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Training and development
– Bosch Lpv has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Global product development strategy at Bosch: Selecting a development site for the new low-cost ABS platform Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Operational resilience
– The operational resilience strategy in the Global product development strategy at Bosch: Selecting a development site for the new low-cost ABS platform Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Ability to lead change in Strategy & Execution field
– Bosch Lpv is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Bosch Lpv in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Learning organization
- Bosch Lpv is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Bosch Lpv is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Global product development strategy at Bosch: Selecting a development site for the new low-cost ABS platform Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Effective Research and Development (R&D)
– Bosch Lpv has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Global product development strategy at Bosch: Selecting a development site for the new low-cost ABS platform - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Analytics focus
– Bosch Lpv is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Martin Kupp can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Weaknesses Global product development strategy at Bosch: Selecting a development site for the new low-cost ABS platform | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Global product development strategy at Bosch: Selecting a development site for the new low-cost ABS platform are -
Need for greater diversity
– Bosch Lpv has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Global product development strategy at Bosch: Selecting a development site for the new low-cost ABS platform, in the dynamic environment Bosch Lpv has struggled to respond to the nimble upstart competition. Bosch Lpv has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to strategic competitive environment developments
– As Global product development strategy at Bosch: Selecting a development site for the new low-cost ABS platform HBR case study mentions - Bosch Lpv takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Skills based hiring
– The stress on hiring functional specialists at Bosch Lpv has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Global product development strategy at Bosch: Selecting a development site for the new low-cost ABS platform HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Bosch Lpv has relatively successful track record of launching new products.
Products dominated business model
– Even though Bosch Lpv has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Global product development strategy at Bosch: Selecting a development site for the new low-cost ABS platform should strive to include more intangible value offerings along with its core products and services.
No frontier risks strategy
– After analyzing the HBR case study Global product development strategy at Bosch: Selecting a development site for the new low-cost ABS platform, it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Lack of clear differentiation of Bosch Lpv products
– To increase the profitability and margins on the products, Bosch Lpv needs to provide more differentiated products than what it is currently offering in the marketplace.
Interest costs
– Compare to the competition, Bosch Lpv has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Low market penetration in new markets
– Outside its home market of Bosch Lpv, firm in the HBR case study Global product development strategy at Bosch: Selecting a development site for the new low-cost ABS platform needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Bosch Lpv supply chain. Even after few cautionary changes mentioned in the HBR case study - Global product development strategy at Bosch: Selecting a development site for the new low-cost ABS platform, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Bosch Lpv vulnerable to further global disruptions in South East Asia.
Opportunities Global product development strategy at Bosch: Selecting a development site for the new low-cost ABS platform | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Global product development strategy at Bosch: Selecting a development site for the new low-cost ABS platform are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Bosch Lpv can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Bosch Lpv is facing challenges because of the dominance of functional experts in the organization. Global product development strategy at Bosch: Selecting a development site for the new low-cost ABS platform case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Loyalty marketing
– Bosch Lpv has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Buying journey improvements
– Bosch Lpv can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Global product development strategy at Bosch: Selecting a development site for the new low-cost ABS platform suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Bosch Lpv to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Using analytics as competitive advantage
– Bosch Lpv has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Global product development strategy at Bosch: Selecting a development site for the new low-cost ABS platform - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Bosch Lpv to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Learning at scale
– Online learning technologies has now opened space for Bosch Lpv to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Bosch Lpv can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Bosch Lpv can use these opportunities to build new business models that can help the communities that Bosch Lpv operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Bosch Lpv to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Bosch Lpv to hire the very best people irrespective of their geographical location.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Bosch Lpv can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Bosch Lpv can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Better consumer reach
– The expansion of the 5G network will help Bosch Lpv to increase its market reach. Bosch Lpv will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Bosch Lpv in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Threats Global product development strategy at Bosch: Selecting a development site for the new low-cost ABS platform External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Global product development strategy at Bosch: Selecting a development site for the new low-cost ABS platform are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Global product development strategy at Bosch: Selecting a development site for the new low-cost ABS platform, Bosch Lpv may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Increasing wage structure of Bosch Lpv
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Bosch Lpv.
Stagnating economy with rate increase
– Bosch Lpv can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Environmental challenges
– Bosch Lpv needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Bosch Lpv can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Technology acceleration in Forth Industrial Revolution
– Bosch Lpv has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Bosch Lpv needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Consumer confidence and its impact on Bosch Lpv demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Bosch Lpv with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Bosch Lpv needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Bosch Lpv business can come under increasing regulations regarding data privacy, data security, etc.
High dependence on third party suppliers
– Bosch Lpv high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Bosch Lpv can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Global product development strategy at Bosch: Selecting a development site for the new low-cost ABS platform .
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Bosch Lpv will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Weighted SWOT Analysis of Global product development strategy at Bosch: Selecting a development site for the new low-cost ABS platform Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Global product development strategy at Bosch: Selecting a development site for the new low-cost ABS platform needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Global product development strategy at Bosch: Selecting a development site for the new low-cost ABS platform is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Global product development strategy at Bosch: Selecting a development site for the new low-cost ABS platform is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Global product development strategy at Bosch: Selecting a development site for the new low-cost ABS platform is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Bosch Lpv needs to make to build a sustainable competitive advantage.
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