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

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  1. 1. International ManagementBOSCH : START STOPSTARTEREXPERIMENTAL EXERCISE : 2Geo Joseph
  2. 2. Bosch : Target Germany asexpansion As providers of Start Stop Starters this presentation coversthe first outlook towards market research of the targetCountry : Germany This is done through analysis of –1. Political2. Economical3. Social4. Legal5. Demographic6. Environmental7. Technological8. Market Landscape9. Customers and Competitors
  3. 3. Political Germany is a federal republic. The lawmakers atthe national level are the Bundestag, electedevery four years by popular vote and theBundesrat , which consists of 69 representativesof the 16 states Thereby holds 3 level government Federal – States –Local (All taking care ofhealth, education, power, business tax)
  4. 4. Economical Germany holds 40 of the fortune 500 companies, with GDP (purchasing power parity): $3.123 trillion (2012 est.) country comparison to theworld: 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 economicanalysisrevealed theraise in thebuyingpotentialThe growingservices sector
  5. 5. Environmental: Environmental effects of carbon capture and storage (CCS)implementation strategies on a national level. The resultsidentify the future role of lignite and hard coal in Germanpower production. Current Issues : Emissions from coal-burning utilities and industries contribute toair pollution; acid rain, resulting from sulphur dioxideemissions, is damaging forests; government working to meet EUcommitment to identify nature preservation areas in line with theEUs 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. 6. TechnologicalGerman companies represent 15.6% of researchadvanced goods worldwide, ranking 2nd in the world(following US) The Federal Government provides fundingthrough annual grants or endowment capital In 2010 the Federal Ministry of Economics andTechnology created a budget of 2.3 billion euros fortechnology research and development
  7. 7. Pollution Regulations : The monitoring of air quality in Germany isregulated by the Federal Emission Control Act(BImSchG).The Europe-wide limit values for particulate matter(PM10) that have been in force since 2005 underthe Federal Emission Control Act. Limit Values : The PM10 annual mean value must not exceed 40µg/m³. The PM10 daily mean value must not exceed 50
  8. 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 andentrepreneurial activity in germany Taxes : Value added tax: 19% Value added tax for food: 7% Corporate tax: 15%
  9. 9. Global EconomicExports:$1.492 trillion (2012 est.)The German economy - the fifth largest economy in the world in PPP terms and Europeslargest - is a leading exporter of machinery, vehicles, chemicals, and householdequipment 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%, Italy5.88%, UK 4.76%, Austria 4.55%, US 4.25%, Switzerland 4.07% )
  10. 10. Start Stop system used by variouscar makersCitroënBMWMercedesToyotaRenaultMazdaHondaFiat GroupVolvoMahindra & MahindraTata MotorsOpelFordKiaHyundaiVolkswagen
  11. 11. Competitors DENSO Delphi Automotive Systems, LLC Visteon Corporation Molins PLC Valeo INA (Schaeffler Technologies)
  12. 12. Markets The automotive industry is the largest industrysector in Germany. Statistics of 2011 : Car sales with a turnover ofEUR 351 billion – around 20 percent of totalGerman industry revenue German passenger car and light commercial vehiclemanufacturers recorded foreign market- generatedrevenue of EUR 194 billion for the year 2011. domesticmarket generated revenue of EUR 80 billion wascreated.
  13. 13. Markets Contd…. German automobile manufacturers producedmore than 12.9 million vehicles in 2011 –equivalent to 17 percent of worldwideproduction. Germany is the European car productionleader: some 5.9 million passenger cars(and more than 439,000 trucks and buses)were manufactured in German plants in 2011
  14. 14. Part 2 Exercise : BoschSWOT analysis
  15. 15. Denso Net sales totaled 3,580.9 billion yen (US$38.1 billion), a 13.5percent 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 toconventional 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. 16. Valeo Valeo revenue 10.9 bn, 68000 employees, Paris Europe accounts to 50 plus percent of its revenueYear Bosch Denso Valeo2009 38714 24559 74992010 47259 23262 96322011 51494 24472 10868Sales Revenue :
  17. 17. Bosch Revenue of 52.3 Bn with 303000 employees Bosch has more than 350 subsidiaries across over 60countries and its products are sold in around 150countries Germany alone accounts to 23 percent share of itsrevenue 7.3 investment in RnD with a great base in patentgeneration
  18. 18. SWOTStrengths• Most wide presence with globalpartners across the globe• Strong hold in the German marketwith strong brand identity• Home based thereby deep know howof market and cultureWeakness• Loosing customer due to newintervention in market withcomparable products by otherproviders• More diversion to other sector mightdistract their focus• Labour expensive as compared toothersOpportunity• Global Partners and suppliers• Still large market within EuropeThreats• Growing penetration by mainstreamcompetitors with stronger innovativestrength (Denso, Valeo both with highRnD strategy)• Growth of Global car sales inGermany that are partners withcompetitors
  19. 19. Action implementedStrengths• Grow the identity with more partnershipplans among other automotivemanufacturers• Stronger Labour force and economiesof scale help themWeakness• Stronger Customer orientedprogrammes• Expanding solutions with integration ofexisting products there by increasingofferings• Strong and skilled labour with regulardevelopment programmes give betterand reliable productOpportunity• Can ensure their growth withinGermany by local expansion• Can be more cost effective due toseveral favouring factorsThreats• The local support and German cultureof national belonging• Relations with global car manufacturersin Germany and local presence can becost effective as compared to othercompetitors