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 - – talent flight as more people leaving formal jobs, digital marketing is dominated by two big players Facebook and Google, geopolitical disruptions, wage bills are increasing, technology disruption, there is backlash against globalization, increasing inequality as vast percentage of new income is going to the top 1%,
increasing government debt because of Covid-19 spendings, competitive advantages are harder to sustain because of technology dispersion, 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 -
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.
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.
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.
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.
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.
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.
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.
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.
Cross disciplinary teams
– Horizontal connected teams at the Bosch Lpv are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
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.
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.
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.
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 -
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.
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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Bosch Lpv is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Global product development strategy at Bosch: Selecting a development site for the new low-cost ABS platform can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
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.
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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Global product development strategy at Bosch: Selecting a development site for the new low-cost ABS platform, it seems that the employees of Bosch Lpv don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
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.
Capital Spending Reduction
– Even during the low interest decade, Bosch Lpv has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Increasing silos among functional specialists
– The organizational structure of Bosch Lpv is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Bosch Lpv needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Bosch Lpv to focus more on services rather than just following the product 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.
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 -
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.
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.
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.
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.
Building a culture of innovation
– managers at Bosch Lpv can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Strategy & Execution segment.
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.
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.
Developing new processes and practices
– Bosch Lpv can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
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.
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.
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.
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.
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 -
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.
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.
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.
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.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Bosch Lpv can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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 .
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Bosch Lpv in the Strategy & Execution sector and impact the bottomline of the organization.
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.
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.
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.
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.
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.
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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