Global product development strategy at Bosch: Selecting a development site for the new low-cost ABS platform SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

Case Study SWOT Analysis Solution

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.

Authors :: Martin Kupp

Topics :: Strategy & Execution

Tags :: Strategy, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis

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 - – geopolitical disruptions, digital marketing is dominated by two big players Facebook and Google, increasing energy prices, increasing government debt because of Covid-19 spendings, central banks are concerned over increasing inflation, technology disruption, there is backlash against globalization, increasing commodity prices, increasing transportation and logistics costs, etc

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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.

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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

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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 -

Ability to recruit top talent

– Bosch Lpv is one of the leading recruiters in the industry. Managers in the Global product development strategy at Bosch: Selecting a development site for the new low-cost ABS platform are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.

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.

Highly skilled collaborators

– Bosch Lpv has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Global product development strategy at Bosch: Selecting a development site for the new low-cost ABS platform HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.

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.

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.

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.

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.

Strong track record of project management

– Bosch Lpv is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

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.

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.

High switching costs

– The high switching costs that Bosch Lpv has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.

Superior customer experience

– The customer experience strategy of Bosch Lpv in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

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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 -

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.

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 bargaining power of channel partners

– Because of the regulatory requirements, Martin Kupp suggests that, Bosch Lpv is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.

Compensation and incentives

– The revenue per employee as mentioned in the HBR case study Global product development strategy at Bosch: Selecting a development site for the new low-cost ABS platform, is just above the industry average. Bosch Lpv needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.

Slow decision making process

– As mentioned earlier in the report, Bosch Lpv has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Bosch Lpv even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.

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.

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.

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.

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.

High operating costs

– Compare to the competitors, firm in the HBR case study Global product development strategy at Bosch: Selecting a development site for the new low-cost ABS platform has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Bosch Lpv 's lucrative customers.

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.

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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 -

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Bosch Lpv can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

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.

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.

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.

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.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Bosch Lpv can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Global product development strategy at Bosch: Selecting a development site for the new low-cost ABS platform, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

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.

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.

Manufacturing automation

– Bosch Lpv can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.

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.

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.

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.

Leveraging digital technologies

– Bosch Lpv can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.

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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 -

Technology disruption because of hacks, piracy etc

– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.

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.

Shortening product life cycle

– it is one of the major threat that Bosch Lpv is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

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.

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.

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 .

Capital market disruption

– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Bosch Lpv.

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.

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.

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.

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.

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.

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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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