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Project Report: MICO-BOSCH
SUBMITTED TO: Prof. V. Sekhar SUBMITTED BY:
PALLAVI JAIN (08PG109) PRATEEK AGARWAL (08PG250) RICHA MEHROTRA (08PG186) SUNDEEP SEHGAL (08PG199) TUSHAR PAGAR (08PG208)
DATE: 10TH November 2009
CONTENTS S. NO. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. TOPIC
LTD. PRODUCTS GROWTH OF THE COMPANY COMPETITORS AND CLIENTS SUSTAINABLE COMPETITIVE ADVANTAGE CORE COMPETENCIES PRICING STRATEGY DISTRIBUTION & SELLING PROCESS PROMOTIONAL STRATEGIES PEOPLE AND PROCESSES SWOT ANALYSIS CONCLUSION
PAGE NO. INTRODUCTION TO MICO - BOSCH 4 7 9 10 11 13 14 16 18 21 30 32
ACKNOWLEDGEMENT We would like to thank Mr. Sreeharsha for providing us an insight into the functioning and role of the marketing in business marketing in his organisation. We are also thankful to Mr. Rohit Gupta for providing additional inputs that went a long way for completion of our project. We would also extend our thanks to Prof. V. Sekhar for providing us an opportunity to carry out this project which is so much of relevance to the real world industry today.
INTRODUCTION TO MICO - BOSCH LTD.
Bosch Limited (formerly Motor Industries Company Ltd.) is the flagship of Bosch in India headquartered in Bangalore. Incorporated in 12th November of the year 1951, Bosch Limited has grown over the years to become India's largest auto component manufacturer, and one of the largest in the world. It is also the second largest Indo-German Company in India. The Business divisions of the company is classified as Diesel systems, Gasoline systems, Starters and Generators, Electrical Drives, Automotive Accessories, Test Equipment, Auto Electricals, Car multimedia, Power Tools, Packaging Machines, Special Purpose machines and Security Systems. The company's manufacturing sites are located in Bangalore, Nashik, Jaipur and Naganathapura.
The Company was shifted to Bangalore on 16th November 1953 premature Bosch was in Chennai. A letter of intent for diversification into auto electricals was received in the year 1985 and approval for the import of capital goods was also obtained. Added a number of new machines both at the Bangalore and Nasik factories during 1987 under the modernisation programme. Also a fourth generation on-line computer facility was installed at the Bangalore factory. The Company was awarded the status of Trading House in the year 1988. The unit added A `Cold Start' facility enabling testing of engine at temperature as low as -20oc. The Centre was appointed as a Bosch Global Development Centre with the global responsibility for design and development of small single cylinder pumps for the entire Bosch Group. Bosch's centre had already developed a new type of single-cylinder pump for vehicular and stationary applications. During the year 1991 technical collaboration agreements were entered for the manufacture of fine horning machines and super finishing machines. In 1992, The Company introduced certain new items such as halogen bulbs, ignition cells, horns, voltage regulators, cluth plates and clutch cover assemblies for the automobile sector. A technical collaboration agreement was made with Witzig and Frank Turnatic GmbH for the mechanical machining systems. Another one agreement was entered with Robert Bosch GmbH, West Germany for the manufacture of bag form fill and sealing machines and also Bosch awarded the ISO 9001 certification by the Technischer Ueberwachungs-Verein, Germany. During the period 1994, two companies became the subsidiary of the Bosch Ltd, namely Motor Industries Software Services Ltd (MISSL) and Motor Industries Trading Ltd
(MITL). The Memorandum of Understanding with the Government of Rajasthan was signed in 1996 to set up Jaipur plant.
The three plants of the Company at Bangalore, Nashik and Naganathapura awarded the QS 9000 certificate by TUV, Essen during 1997. The company has entered into car servicing business in the year 2002, launched India's first Bosch Car Services Workshop (BCSW) in Delhi. The Industrial Equipment Division of the company has developed endurance-testing equipment for Timken and has launched new range of products in the same year consisted incar multimedia systems, the San Fransisco CD-70, in-car MP3 player and velocity range of amplifiers, speakers and sub-woofers. In 2003, the Spark Plug manufacturing activity of the company at Naganathapura works has been discontinued. Bosch Security Systems launched Network Video Solutions, a Video Solutions and Video Surveillance system that allows remote monitoring over IP (Internet Protocol) networks. Bosch rolls out new surveillance system during the year 2004. In 2005 the company moved in production of key products to MICO plants in India and also launched 30 millionth PF pump as a footprint. Bosch had Dun & Bradstreet - American Express Corporate Award 2006 in recognition of size and growth among the top 500 companies of India.
The Deployment of Business Excellence based on the European EFQM model has been a focused area for the company in 2006. Several initiatives was started to ensure that these concepts percolate down in the organisation and become a part of the work culture. Bosch opened its first manufacturing facility for high-pressure common-rail pumps in 2006 in India. Since August 2007, the company has been manufacturing common rail injectors locally. In 2007 Bosch made as many as 100,000 common-rail systems in India. The CII National World skills, 2007- `Best Company Award was came to the company's hand. The Brand consolidation for Bosch in India was made in January of the year 2008, India's largest auto component supplier; Motor Industries Company Limited (MICO) has been renamed as Bosch Limited. The Registrar of Companies, Government of India also approved the new name of the company on 18th January 2008. As on February 2008 under expansion activities in India Bosch and Igarashi Motors India established joint venture Development, manufacture, and sale of automotive components for growing Indian automotive market. The company planned to invest Rs 850 crores by 2010, Apart from the expansion of common rail diesel production,
this money will also be invest in the manufacturing of gasoline systems components from 2008. Moreover, it is planned to start local ABS production at the end of 2008, and the production of electronic control units in 2009. As a leading technology and services company, take advantage of global opportunities for strong and meaningful development. The company's ambition is to enhance the quality of life with solutions that are both innovative and beneficial. Bosch focuses on core competencies in automotive and industrial technologies, as well as in products and services for professional and private use. The diversity of company's culture is a source of additional strength, that's company lives day by day.
BOSCH GROUP 1. Automotive (MICO) 2. Industrial Products 3. Consumer Goods
Product in Automotive domain
Braking systems Brake pads
Clutch plates and Cover assemblies
GROWTH OF THE COMPANY
As per the data collected from the Capitaline Databases, we found that the company is doing really well in the Indian markets. We can see that the sales has grown from rupees 2977.48 crore in December 2005 to 4601.82 crore rupees in December 2008. Also the profit before interest and tax has grown from 542.57 crore in 2005 to 865.31 crore rupees in 2008. When come to Profit after Tax, we see that the company has grown from 343.07 in Dec 2005 to 633.87 crore rupees in Dec 2008. The company has shown tremendous improvement in terms of sales and PAT in the period between Dec 2005-Dec 2006. Then the company showed a consistent growth from Dec 2006 to Dec 2008.
5000 4601.82 4500 4000 3500 3000 3781.16 4325.27
NET SALES PBIT PAT
2000 1500 1000 500 0 Jan-05 Jan-06 Jan-07 Jan-08 542.57 343.07 804.72 547.99 859.72 609.21 865.31 633.87
Fig 1. GROWTH RATE OF BOSCH IN TERMS OF SALES PBIT AND PAT(in Rs. Crore)
COMPETITORS Some of the major competitors of MICO are:
1) DELPHI: Delphi is a leading global supplier for the automotive, computing, communications, energy, and consumer accessories markets. It is headquartered in Troy, Mich. Delphi has more than 100,000 employees in 32 countries and more than 100,000 employees in 32 countries. 2) DENSO: DENSO is a leading supplier of advanced automotive technology, systems and components for all the world's major automakers, operates in 32 countries and regions with approximately 120,000 employees. Global consolidated sales totalled US$32.0 billion for fiscal year ended March 31, 2009. 3) SIEMENS: It has a wide presence across the country, its operations include 17 manufacturing plants and an extensive network of Sales and Service offices. It is also part of a vast global network of 475,000 people, operating in over 190 countries, which serves to enhance our standing.
MICO Bosch has a large client base all over the world. Some of them are as follows:
MAHINDRA AND MAHINDRA
GENERAL MOTORS CHEVROLET
SUSTAINABLE COMPETITIVE ADVANTAGE
1) SUSTAINABLE MOBILITY AT MICO BOSCH- OVERVIEW Individual mobility is increasing worldwide, particularly in Asia and Eastern Europe. This is because greater individual mobility means more pollutants and CO 2 emissions, greater consumption of resources, and more accidents. That’s why MICO Bosch is striving to achieve a form of sustainable mobility which is low in pollutants and independent of fossil fuels. Working in tandem with its customers, it is researching the potential for powering vehicles by combining an internal-combustion engine with an electric motor or by using an electric motor on its own. The path adopted by MICO Bosch is:
Engineers are unlocking the energy-saving potential of the internal-combustion engine. With smart technology along the full length of the drive train and with hybrid solutions, it helps the car and the internal-combustion engine become increasingly clean and efficient.
It is adapting the internal-combustion engine to work with alternative fuels produced either synthetically or from renewable raw materials.
It has found niche segments for electric drives that use a fuel cell as an energy converter to replace the internal combustion engine.
MICO Bosch is working on the next phase of technical developments to meet the stricter emission limits soon to be introduced in Europe, the U.S., and the emerging markets in Asia.
2) COMBINING TECHNOLOGIES So far, the necessity to cut fuel consumption and CO2emissions has led to increased demand for MICO’s injection systems in particular. Customers are now turning their attention to other technologies, including thermal and vehicle electrical system management, more efficient alternators, and the start/stop system.
These components can each help improve the energy efficiency of vehicles by several percentage points
3) INCREASING SAFETY The ELECTRONIC STABILITY PROGRAM launched by Bosch in 1995 plays a key role in improving road safety. ESP also forms a fundamental basis for new functions currently being developed by our engineers. One example is the Combined Active and Passive Safety (CAPS) system, which aims to further improve accident prevention
1) High Market share: With a market share of almost 95%, it has a virtual monopoly in the Diesel Fuel Injection Equipment.
2) Technological superiority and strong support from parent Bosch: Strong parental support in terms of technology transfer coupled with high degree of localisation has been a key success factor. MICO has successfully followed the policy of localising global knowledge.
3) Global R&D hub: MICO Application Centre (MAC) has been established in India for R&D purposes. It has emerged as a key global R&D competency centre catering to the entire Bosch Group. It is the first of its kind in India and Bosch Group’s first outside Europe.
4) Alternative Energy: MICO Bosch is moving towards energies such as electricity while also improving existing power train technologies, including diesel systems, gasoline direct injection and hybrids to reduce the energy from conventional resources. It has also taken up bio diesel and CNG technologies to address energy challenges. 5) Service: In India 50 per cent of Bosch’s current business is accounted for by the diesel segment. Bosch positions itself as a one-stop shop for sales and service and to make available the entire range of products to those who come for service. Bosch is expanding the product range in this business by bringing some of its global technology products into India. It is also planning to manufacture some of these products in India. A CORE COMPETENCY CENTRE has been created in the country to manufacture these equipments in the MICO production complex.
6) Quality: MICO Bosch has ISO Certified Quality Management System. Certified Locations are MICO, Incorporated; MICO Europe ltd. and MICO Mexico. 7) Large Contact Base: MICO has a large supplier and customer base and maintains a long term relationship with them.
The industrial market understands various aspects of the pricing since pricing is the most critical part of industrial marketing strategy. Different strategies such as market segmentation strategy, product strategy, and promotion strategy are related to pricing strategy. In order to achieve the dual objective such as to meet the company objective and satisfy the market needs, the industrial marketer has to integrate the various strategies.
Pricing is the critical marketing mix which actually produces the revenue. Pricing objectives play important role while deciding on pricing. MICO-BOSCH is the market leader in the automotive component manufacturing especially in sparkplug and CRDI (Common Rail Diesel Injection) System. It has 80% market share in sparkplug business India and 75% business in CRDI. It has different pricing objectives for different products.
The pricing of MICO- BOSCH is aligned with its corporate strategy. The parent company BOSCH keeps aside 92% profit of its business for the charity. So BOSCH is not the profit seeking organisation.
Pricing Objectives of MICO-BOSCH:
1) Product- Quality Leadership: Though the company is the market leader in Indian business, the quality is the central aspect of its business. By providing highest quality of technical product and efficiency with market acceptable prices it aims to establish itself as a product quality leader in the market. 2) Avoidance of government’s intervention into the business: India is not the capitalistic country. MICO-BOSCH is the market leader with quality products so it might seek higher prices (i.e. prices more than competitive prices). To avoid predatory pricing by any OEM, government may intervene in the pricing strategy and may force company to rethink its policy. To avoid this possible threat, company has competitive pricing for all its components.
1) Volume Based Pricing: MICO – BOSCH keeps volume based pricing for large volume components like sparkplug. For higher volume products, the price per unit of component is decreased. This is achieved through economies of scale in technology. It has a high operating leverage which makes volumes, the key driver to its profitability. Also it is OEM of all auto components so it can sustain vibrancy in the market.
2) Administered Pricing: Pricing of products like pumps is based on administered pricing. The infrastructure cost is evaluated on the basis of total machines used, shop floor area used. This evaluation of pricing is called as floor pricing. A mark-up price is added to this floor price. But it is generally avoided to ask for ceiling price.
3) Market Skimming: Market skimming is done for its SPM (Special Purpose Machines). These machines are customised product of MICO-BOSCH. Every client has different technical specification for SPMs. These machines are made from high end technology. They are not produced on large volume basis. So SPM are quoted with higher prices.
General Practices Followed for Pricing:
1) Different Prices for different customers: The price per unit of component varies from customer to customer for same product. It depends upon the volume of business, relationship with customer etc.
2) Negotiation: Prices are negotiated for all products. It starts from the highest levels and brought down to the acceptable prices to both the parties. Value and technological advancements are core aspects during negotiations.
The distribution of company’s products is classified broadly in two types, direct selling and the other is through distribution channels.
In direct selling, products are shipped directly to the customers of the company at Ex- factory cost.
The MICO- BOSCH has pan India presence for distribution of its products to serve its entire client base through its distribution channel. It has divided entire country into four geographical locations. They are northern region, southern region, eastern region and western region. Each region has sales offices and Sales houses.
Northern region: Sales Office- Chandigarh, Panchkula, Lucknow Sales House- New Delhi
Southern Region: Sales Office- Bangalore, Secundarabad, Ernakulam Sales House- Chennai
Eastern Region: Sales Office- Guwahati, Patana, Cuttack Sales House- Kolkata
Western Region: Sales Office- Ahmedabad, Indore, Jaipur Sales House- Mumbai.
The Dealer network is segmented into:
Authorised distribution: These institutes have company’s products and they sell the products with license from the company.
Authorised Workshop: These are the small workshops where defective products are taken back and made functional again or replaced if required. These are helpful for reverse logistics. Stockist: Stockists of the OEM (customers of MICO-BOSCH) are distributed products of the company. Authorised Sales Outlet: Company sales its small components like sparkplugs directly to the end user through its more than 2500 retail outlets across India. THE SELLING PROCESS Order taking (e-tendering) Order Processing Kick off strategy - Planners of manufacturing unit interact - Warehouse - Distribution
The special ownership structure of the BOSCH Group guarantees financial independence and entrepreneurial freedom. The structure also enables the group to undertake significant up front investments for the future and does justice to its social responsibilities in a manner reflecting the spirit and will of its founder. 92% of the shares in Robert Bosch GmbH are held by the charitable foundation Robert Bosch sifting. The slogan “Invented for Life” is part of its long tradition, through which it communicates the Group’s core competencies and vision that includes technological leadership, modernity, dynamics, and quality and customer orientation. The company has its roots in Germany, but has also always had a strong international orientation. In the areas in which they do business, hardly any other companies have such a broad global presence. Their global production and development sites work together as a very closely-knit network. This network and the company’s global experience has put them in an excellent position to exploit opportunities in current and future growth regions of the world. 1. On Track Program. Students are encouraged to take up Industry based Project works and Industry based internships at Mico - Bosch. Industrial Visits are arranged for students. Training programmes and workshops are arranged for students in emerging fields like CAD/CAM/CAE and Advanced Materials. 2. SIAM Convention. Every year, Bosch actively participates in SIAM convention (Society of Indian Automobile Manufacturers) which is the apex industry association representing all vehicle and vehicular engine manufacturers in India. SIAM, is an advocacy group for the automobile industry on economic, technology and public policy areas. It got into discussions involving the following issues during the convention in August 2009 – o “Revival – The Current Progress in Reviving The Global Automotive Industry & Positioning The Indian Automotive Industry in The Future” o “Restructuring - Build A Viable Industry Model: Challenges Facing The Commercial Vehicle Industry” o “Sustainability – Role of Collaborative Working” o “Sustainable Mobility - Connecting India: Making a Paradigm Shift” o “Leadership in The Two Wheeler Industry”
3. Trade Exhibitions. Bosch has continuously displayed its capabilities in various renowned trade exhibitions around the globe. It has been participating in Auto Expo at Pragati Maidan, New Delhi, Tokyo Motor Show, IAA, IMTX and many more. Auto Expo is organised jointly by Automotive Component Manufacturers Association of India (ACMA), Confederation of Indian Industry (CII) and Society of Indian Automobile Manufacturers (SIAM) and is a biennial event. The following are the visitor profiles at such exhibitions: • Overseas buyer delegations • International Business visitors • Dealers Delegations • Government Officials • Senior Executives of PSUs • CEOs/Decision Makers • Ministerial Departments • Managers/Department /Division Heads • Engineers / Technicians • Diplomats / Embassies / Missions in India • State Transport Authorities • Research Institutes / Educational Institutions • Publication Houses • Delegations from Technical Institutions • Auto Enthusiasts • Socialites • General Visitors 4. Customized Websites. Bosch operates in various fields of component manufacturing. It has broadly categorized its products and divisions and each is having a different portal for easy understandability. 5. Automobile and industrial magazines. Mico Bosch regularly advertises its products and work-culture in magazines like Autocar, Motor Trend, Top Gear, Overdrive, Auto India etc. These magazines are published on a regular schedule, containing a variety of articles on new vehicles, car interiors and technological advancements in automobiles.
OPPORTUNITIES Bosch After-Market Service Identifying a huge opportunity in this segment, Bosch is planning to expand its presence in the automotive independent after-market business. The company is targeting a turnover of Rs. 1,000 crores in the after-market and service equipment business by 2010 against the current Rs. 700 crores.
PEOPLE AND PROCESSES
The Marketing department at Bosch is headed by the sales and automotive after market division and sales original equipment. Sales and Automotive After Market has the following departments. Marketing and Advertising (SMA) Customer Business Development. (CBD) Sales Planning and Distribution (SPD) Sales Export (SXP) Corporate Advertising and Publicity (CAP) Sales Services (SEE) Sales House Administration (SSA)
National Sales Manager
Regional Manager North
Regional Manager East
Regional Manager West
Regional Manager South
Territory Executives (Specific area Objectives)
Territory Executives (Specific area Objectives)
Territory Executives (Specific area Objectives)
Territory Executives (Specific area Objectives)
Functions of the departments
Product Management. Advertising and sales promotion. Packaging Marketing services and market research.
Warehouse activities Orders fulfillment and insuring collection Business with government departments Procurement of trade goods
Sales, promotion activities in foreign countries. Orders planning and export dispatch Technical support and service training Export statistics
Customer Service Investigation in Field companies Actualization of studies.
Development programs for Mico-Bosch means continuous competence development for all associates. The company ensures career advancement for associates showing potential for tasks involving greater responsibilities. They support job rotation to avoid functional silos and also support transfers within the Bosch group. It has various development programs like the Robert Bosch Kolleg/Carnegie Bosch Institute – Platform for international exchange of experience and transfer of academic expertise for managers and executives. They also have various instruments related to associate development like Leadership Development, Specialist Education and Development program,
seminars and executive training for managers for their professional advancement e.g. seminars aligned to Robert Bosch competency model, etc.
This project was undertaken to make the MICO facility SAP-enabled country-wide.
MISSION Achieve business advantage by aligning MICO's business processes with standardized best practices of Bosch through an integrated, scalable solution responsive to dynamic business needs.
ENTERPRISE RESOURCE PLANNING AT MICO
CHANGES DUE TO SAP
Purchase order formats. Control the purchasing of products. The Purchase Order Form helps the customer in identifying the purchase details and requested delivery date, delivery details for the items purchased, billing and supplier information, quantity and unit price of each item, total price of the purchase. Material with Supplier (MWS) reconciliation procedure- it helps in inventory management. It is a process to measure the efficiency of use of material. eg:-Process scrap and End bit scrap accounting. Packing material numbers will be changed to Bosch numbers. WEB Electronic Data Interchange (EDI). It is applicable only for direct material area. Web EDI is a cost-effective solution that allows the company to interact with its suppliers in the regions without the worrying of implementing a complex EDI infrastructure. In its simplest form, webEDI enables the company to receive, turn around, create and manage electronic documents using just a web browser. This service seamlessly transforms data into EDI format and transmits it to the trading partner.
This is a summary of the employee benefits available at MICO, Inc.
MEDICAL & DENTAL INSURANCE No premium participation for regular full-time employees. The cost to cover eligible family members is $150.00 a month. Effective on the first day of the calendar month following 30 days of employment.
VISION REIMBURSEMENT A $400 allotment per family, per year, for glasses, contacts, and examination. Paid at 80%. Effective on the first day of the calendar month following 30 days of employment. LIFE INSURANCE MICO provides regular full-time employees with a life insurance policy equal to the employees’ annual salary (not to exceed $50,000). Effective on the first day of the calendar month following 30 days of employment. SUPPLEMENTAL LIFE & AD & D Optional additional life insurance is offered to the employee, spouse and dependent children. Premiums are paid by the employee. Effective on the first day of the calendar month following 30 days of employment. PROFIT SHARING PROGRAM After 24 months of continuous employment at MICO, employees are fully vested and eligible to participate in the MICO Profit Sharing Plan. This benefit is 100% funded by MICO and based on company profitability. 401K Voluntary employee retirement program which provides the employees with the opportunity to invest in their future retirement by using “pre-tax dollars”. All new employees are enrolled automatically at a 2% employee contribution UNLESS THE EMPLOYEE CHOOSES NOT TO PARTICIPATE. Effective on the first day of the calendar month following 30 days of employment. VACATION Vacation time is on an accrual system in which your initial accrual is 3.67 hours per pay period. The accrual rate equals two weeks of paid vacation per year and increases with longevity of service
SICK Sick time is on an accrual system in which you can earn up to five sick days a year or forty hours. Sick time can be used for you or a dependent. EDUCATIONAL ASSISTANCE MICO supports and recognizes the value of continuous learning. Upon manager approval, MICO will reimburse employees for books and tuition up to 100% with proof of course completion and a passing grade of a “C” or higher. This benefit normally requires a reimbursement agreement should the employee voluntarily terminate their employment within 2-3 years of receiving the Educational Assistance. Effective on the first day of the calendar month following 30 days of employment. DIRECT DEPOSIT MICO will electronically deposit (bi-weekly) your payroll earnings into your checking or savings account of your choice. MICO CREDIT UNION As a MICO employee, you and your immediate family members are eligible to join the MICO Credit Union. The MICO Credit Union offers low interest loans and savings accounts. EMPLOYEE ASSISTANCE PROGRAM (EAP) The MICO Employee Assistance program is available to all employees and anyone residing in their household. The EAP is a confidential and free service offered to those who are having problems and need assistance finding the resources they need. NURSE/WELLNESS LINE MICO provides access to a free / confidential nurse line 24 hours a day 7 days a week. The nurse line is available to all MICO employees and individuals residing or visiting the employees’ home. The nurse line is staffed with professional registered nurses.
SHORT TERM DISABILITY MICO provides all regular full-time employees with a no premium short-term disability policy. The short-term disability will pay 60% of your gross earnings up to 26 weeks for nonwork related illness or injury LONG TERM DISABILITY In the event that you become disabled, MICO offers voluntary long-term disability benefits. Premiums are based on two factors; the employees annual salary and employees age. Premiums are paid by the employee.
RESEARCH AND DEVELOPMENT
MICO has a strong focus on R&D, and spends about 2-3 per cent of its turnover in this area. The company is responsible for developing certain products like Single Cylinder Pumps, Multi-Cylinder Pumps and mechanical Distributor Pumps for the entire Bosch group globally.
Besides the R&D expenditure incurred by Bosch, the company spends a significant part of its revenue in developing new products for domestic and international markets. With Bosch, MICO has developed excellent R&D and manufacturing capabilities, which has helped build a strong customer base and establish market leadership through the high quality of its technology and products. “MICO Application Centre (MAC) has been established in India for R&D purposes. It has emerged as a key global R&D competency centre catering to the entire Bosch Group. It is the first of its kind in India and Bosch Group’s first outside Europe.” MICO is a global development centre for Bosch, and carries out the following activities: • Design & development of new products, from concept to manufacturing • Manufacture and testing of proto samples
• Reliability testing • Product quality improvements and rationalisation • Technical co-ordination with other manufacturing locations, in respect of quality and warranty It also offers solutions to vehicle and engine manufacturers in the application of Electronic Diesel Control and Petrol Injection Systems. It has the global responsibility of developing certain products like single cylinder pumps, multi-cylinder pumps and mechanical distributor pumps for the entire Bosch group. The R&D centre is located in Bangalore and is managed by 200 engineers and 40 support staff. The company invested nearly US$ 8 million in R&D, constituting about 2.3 per cent of total turnover during the year 2001. Facilities in R&D
Engine Test Cells for emission, performance and endurance High Precision Calibration Test Benches Injector Testing Reliability and Metallurgical Testing Computer Aided Design
Developments in the Application Centre As a step towards meeting customer needs with the change in the emission scenario, a fullfledged application test facility, for electronic diesel control, petrol injection, spark plug and auto electrical products, is housed in the new Application Centre. Set up primarily to cater to the requirements of the Indian auto manufacturers, this new setup is a perfect test bed for manufacturers looking to upgrade their products with great attention to detail. Facilities include –
Engine Testing dynamometer
Chassis Dynamometer (vehicle testing) High-precision calibration test benches Spark plug testing Starter motor testing Alternator testing Vibration testing Glow plug testing Climatic testing Instrumentation lab
MICO Bosch follows a department based reward system where targets are set department wise and if the department is able to achieve the set targets then they are rewarded bonus or something. For example, if production department is able to produce more parts than the target in lesser time they are rewarded. Similarly, for other departments like research department, quality control department.
Established brand image around the world over the centuries. High Customer satisfaction. Continuous improvement of products and quality. Streamlined procedures for every function of the company. The company’s Corporate social responsibility has helped to develop its brand and the market. Employee development is given utmost importance. Employees are given great importance, this has resulted in less employee turnover, this has helped to curtail hiring and training costs. Less dependency on external funds. Cost reduction strategy is good. Leadership through innovation. Employee’s contribution towards work is noticeable. World class infrastructure facility. Continuous improvement of products. Wide portfolio of loyal customers. Bosch is cash rich, so dependency for external funds is minimal.
Marketing of products is given less importance. Adaptability towards change is low. Unionized work environment. Concentration is given to create monopoly opportunities in the market. Performance appraisal of the employees is not satisfactory. Haven’t diversified into other lines of business.
Continuous innovation of products. Produce innovative products The Indian automotive segment is growing in excess of 40% annually and is being flushed with a whole new range of cars and bikes. This gives a lot of opportunity to auto ancillary companies like Bosch to be tied up with these car manufacturers for original equipment (O.E) supply and after sales service.
Launch of TATA Nano – Bosch has an opportunity with the launch of the TATA Nano car as Bosch is the supplier of the engine and the braking system of the car. If the car is a hit in the market it would help Bosch to develop and to improve similar type products.
Bosch can foray into other line of business as it has a good brand image. It can produce eco friendly to replace existing products as the market for eco friendly products are growing and the economic forums have cited the need for these products.
Threats Increase of competition. Brand image being diluted. Too many substitute products available in the market. Growing bargaining power of suppliers and customers. Traditional method of working of the business.
MICO Bosch today dominates the Fuel injection equipment and Spark plugs market in India, and is almost synonymous with these products. The company enjoys a relative monopoly in most of its products. This can be attributed mainly to its continuous innovation and competitive pricing strategies used. MICO has the advantage of having Bosch as its parent, which provides it with support in terms of technology transfer coupled with high degree of localisation. MICO has successfully followed the policy of localising global knowledge. The company’s continuous success can also be attributed to its ability to continuously innovate due to its strong R&D. Thus, it has been able to provide products that incorporate the latest technology and meet the requirements of its global and domestic customers in terms of performance, safety and emission control. MICO is capitalising well on its core competencies and will continue to do so thereby further strengthening its position in the growing auto component industry.
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