Bosch Group: Marketing Strategy and Macro Environment Impact

This report provides a comprehensive analysis of Bosch Group's business operations and marketing strategies, focusing on the impact of the macro-environment. It begins with an introduction to Bosch, highlighting its global presence and key business segments, including auto parts and home appliances. The report then delves into a PESTEL analysis, examining the political, economic, social, technological, environmental, and legal factors influencing Bosch's operations across various countries. Furthermore, it utilizes Porter's Five Forces model to assess the competitive landscape, including bargaining power of buyers and suppliers, competitive rivalry, and the threat of new entrants and substitutes. The report also explores the marketing mix, encompassing product, price, place, and promotion strategies. Finally, the report identifies and assesses opportunities for growth within Bosch's macro-environment, offering insights for strategic development and sustainable competitive advantage. The report concludes with a clear articulation of the links to marketing theory, offering a well-structured analysis of Bosch's market position and future prospects.

Running Head: Bosch Group
Bosch Group
Report
AUGUST 14, 2019

Bosch Group 1
Introduction
Robert Bosch GmbH or Bosch is a German company. Bosch is known for its
manufacturing of auto parts and home appliances (Bosch, 2019). Bosch Group provides auto
electrical and accessories for car and motor vehicles and deals in home appliances products like
sound speakers, washing machines etc. Bosch is a German multinational company that operates
its business through 130 locations in more than 60 countries in the world. The company has more
than 410,000 associates globally and its EBIT (Earnings before Interest and Tax) was more than
5.5 billion Euros in 2018 (Bosch, 2019). Although the company is one of the brand names in the
automobile industry, it is known for its international business that includes manufacturing of auto
parts and diesel or gasoline fuel injection system that is used in cars. The company operates its
business globally, but the company has to face many challenges in other countries or from its
external environment. This report analyzes various external environmental factors that affect the
business operation of Bosch. Apart from this, the report also analyzes the macro-environment
opportunities for the company and suggest two key ideas to take advantage of the available
growth opportunities in the macro-environment.
Macro Environment of Bosch Group
There are various marketing and strategic tools that help a company to analyse the
external environmental factors. Some of the key tools are Porter’s Five Force Model, PESTEL
and Marketing mix. These strategic tools help the business organization to analyse the various
external factors and the impact of these factors on the business organization.
PESTEL Analysis of Bosch Group
The PESTEL Analysis tool is given by Francis Aguilar who was the professor at Harvard
University. The PESTEL analysis includes analysis of five major macro factors which are
Political, Economic, Social, Technological, Environmental and Legal. These factors not only
affect the Bosch Group, rather these factors affect the entire industry as well.
Political: The political factor directly affects the profitability and business practices of
the company. Bosch is operating its business operation more than 60 countries, so it is essential
for the company to analyse the stability in politics in all these countries (Bosch, 2019). The
company manufactures auto components in many European and Asian countries where
corruption in politics is a major challenge for the company. For example, the major impact that

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the company faced from Brexit fallout. The political support in Asian countries like China and
India is also crucial for the company because these are the large automobile market of Bosch
Group (Liao, Chen, Hu, Chung, & Liu, 2017).
Economic: The company has strong financial earnings because its net income was 4.1
billion Euro in 2018. The total revenue of the company was 78.5 billion Euros in 2018 (Bosch,
2019). The total of assets of the company as 3.87 billion Euro. The strong financial status of the
company helps the company to focus on research and development which further helps the
company to launch a new innovative product for car manufacturing companies (Stankovic,
2018). Apart from this, the shareholder support is also crucial for the company because the high
capital returns on the company's share help the company to collect more fund. However, strong
economic support is possible for the company because of its high sales volume in the domestic
and European market. The company have also opportunities in the Asian market such as China
and India where the population is very large, and people want to buy more luxury items such as
cars. These are the major opportunities market for Bosch Group where the company can invest
money to maximize its profits (Festing, 2017).
Social: Social factors include those people, community and society in which company
operates its business. The company cares the values, norms, culture, and belief of its people and
customers. Social factors not only influence the operational function of Bosch rather it also
affects its marketing plan because it operates its business more than 60 countries. The company
considers the demographics of population such as age, gender, income, etc. for its market
segmentation and make its strategy according the requirement and needs of the society. The
company launched its products according to the income and needs of its customer (Mehta &
Rajan, 2017).
Technological: The company spend more than 7 billion Euros on R&D. This is the 9.5%
of its total revenue in 2016. The company is known for many global collaborations with top
automobile companies of the world. The investment of the company in various fields of
innovation and R&D helps the company to establish itself as a top company in the world. Apart
from this, the Bosch Group also focuses on electromobility and designed batteries for the cars
(Van den Bosch & Van Prooijen, 2012). The company invest more than 400 million in producing
electromobility and manufacturing of batteries. It can be said that Bosch mainly focuses on the

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electrification of vehicles and company invest too much money in this sector. Bosch believes to
produce highly innovative automobile equipment such as artificial intelligence in a self-drive or
automatic car, automated and connected mobility and industry 4.0 which deals with smart
automation etc. Company has a large number of technological collaborations with world most
innovative automobile companies. Apart from this Bosch has a strategic partnership with SAP,
IBM, and General Electric over the last 2 years. These companies will help Bosch to focus on
innovation related to IoT (Internet of Things).
Environmental: Like other global companies, Bosch Group is also known for its CSR
initiatives. The company invest a high proportion of its profit on CSR activities. The company
also focuses on innovation and the latest technology engines and automobile parts that help to
reduce the carbon emission. The company also focuses on producing electronic parts and items
that is helpful in pollution control. The company also focuses on using renewable energy
resources as much as possible in its business operation (Tsai, Hu, & Lu, 2015.
Legal: There are different rules and regulation in every country related to emission
control. The company is facing issues related to restructuring the compliance system which is
related with this emission control issue. The company need to update this emission compliance
framework in compliance with local government rules and regulations, where company operates
its business. In 2015, the company was involved in emission scandal that was related to
manipulation of diesel engine control units. The scandal related to tweaked emission data of the
company led to investigation on the company in USA and EU countries. These scandals directly
affect the financial status of the company because the board of the company has provisioned
more than 1.1 billion for such type of risks (Kumar, Luthra, Khandelwal, Mehta, Chaudhary, &
Bhatia, 2018).
Competitive Advantage
To analyse the competitive advantage of the company, the porter’s five force model plays
an important role to evaluate different competitive forces that affect the company and its
business operations. Porter’s five force model helps to analyse different competitive factors that
are crucial to gain a competitive advantage over the competitors.

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Porter’s Five Force Model of Bosch Group
The porter's five force model has five factors that influence the business operation. These
forces are as follow:
1. Bargaining Power of Buyers: Barging power of buyers depends on customer service,
product prices, and availability of retailers in the market. This help the company to
accomplish its business objectives as well. The strong bargaining power of buyers make
the business industry more competitive and it also affects the profitability of the
organization. Bosch is a global company and its products are of superior quality. While
the low bargaining power of buyers leads to more profitability and less competition in the
market. However, the buyer power of Bosch customer is low in comparison to other
players in the market. The customer of the company also dispersed in various countries,
so they can affect the business with very less bargaining power. However, the high cost
of Bosch products is a major issue for the company (Buchmann & Savchenko, 2017).
2. Bargaining Power of Suppliers: The supplier of the company concentrated into a
specific region of the world such as Europe and USA market and concentration of
suppliers is higher than their buyers. There are large number of suppliers in this industry,
so the bargaining power of supplier is also low. For Bosch, switching supplier cost is
very low because large number of suppliers are ready to deliver raw material at low cost,
bargaining power of supplier would not affect the business practice of Bosch. Bosch is a
price-sensitive company and has strong command over its market and suppliers.
Therefore, it can be said that the bargaining power of supplier will not affect the Bosch
Group (Dasgupta & Ghatge, 2015).
3. Competitive Rivalry: In many countries, Bosch is facing strong competition from LG
and Samsung. While in Asian market, the Chinese and Indian companies are also giving
strong competition to the Bosch Group. The major challenge for the company is that the
competitors provide quality products at low cost especially in China and India, which are
the larger markets in the Asian countries. Therefore, it can be said that Bosch is facing
strong competition is Africana and Asian market where it has huge opportunities to
expand its market share (Fredriksson, Roth, Tagliapietra, & Veugelers, 2018).
4. Threat of new entrants: The company faces strong competition in the home appliances
segments. There are large numbers of new players that are waiting to enter in the home

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appliances and automobile manufacturing sector. The influence of new automobile
companies is also crucial to influence the business strategy of Bosch. Although, Bosch
has strong command in European and German market, but the company is facing strong
challenges in Middle East and Asian countries (Forrant, Levenstein, & Wooding, 2017).
5. Threat of Substitutes: Substitutes for the Bosch is generally affecting its home
appliances segments. For example, if consumer washing their own cloths or give it to the
washer man, then it affects the demand of Bosch Washing machine. Apart form this,
people who are loving to watch movies on mobile phones rather than TV than it affects
the demand of television sets. Although the company has very low threat of substitutes.
However, if the company maintains good relationship with its customer and customer has
loyalty for the company then consumer of the company will not move to any other
competitors.
Marketing Mix of Bosch Group
The marketing mix includes 4Ps. These 4Ps are Product, Price, Place, and Promotion. The
marketing mix of Bosch can be divided in these four key points which are crucial in any business
organization.
1. Product: The Bosch Group deals in many product lines such as home appliances
products like sound speakers, Washing machines, TV etc. Apart from this the company
also manufactures diesel system, power tools, electric drives, test equipment, security
systems, packaging machines etc. (Ozturk, Joiner, & Cavusgil, 2015).
2. Price: This part of the marketing mix generates revenues for the company and it is one of
the important parts of the marketing mix. The price of Bosch group products is generally
too high. The company charges premium prices for its products. Even the automobile
parts and accessories of the company is assembled in the branded luxury cars (Castells,
Salvador, & Bosch, 2010).
3. Place: The company generally operates its business in urban areas where the upper
income class people are living. The company target the shopping malls, retail shopping
centers, and also opens its showroom in some large cities of the country. Although the
company has large showrooms in USA and other European countries. Apart from this, it
can also focus on expanding its market in developing countries as well (Jha, Bose, &
Ngai, 2016).

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4. Promotion: The company spends huge amount on its products and it is useless if the
company not advertise its products among people. However, the company needs to spend
heavy advertising through mass media, print media, electronic media, and social media.
Bosch should aware people about its marketing strategy to the people.
STP of Bosch Group
STP shows the marketing strategies of the company and how the company positioned itself
among its customers. The three major factors in STP are segmentation, Targeting, and
Positioning.
1. Segmentation: The Bosch needs to segment the customer based on their needs and
requirements. For example, in the Barbados market, it can target the middle-income class
of people who can afford the products of Bosch (Wang & He, 2015). As the products of
the company are too expensive, the company needs to develop new products for middle-
income class of people. The company needs to divide its market according to the rural
and unban areas and then need to place the product accordingly (De Stefano, Montes-
Sancho, & Busch, 2016).
2. Targeting: The company generally targets upper income group of people in USA and in
other companies where it operates it business. Although, it home appliances products are
too costly for middle income and lower income group of people. The Bosch also targets
the new automobile companies for its automobile manufacturing products rather than
focusing on few brand names. Bank can also tie up with local banks to promote its
products among the people (Attias & Mira-Bonnardel, 2017).
3. Positioning: Since the company operates its business in diversified products, the
company has different customer groups including retail customers and B2B customers.
To target its customers, the company can target the 20-45 years old age people for its
home appliances products. Apart from this, the company can target some major brands in
automobile sector for its automobile products.
Opportunities for Growth in Macro Environment
As the company has strong customer base and it operates its business number of countries, it
needs to focus on these two opportunities that accelerate the growth of the company:

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1. Bosch is one of the popular brands, but its products are too costly for people. Despite
being increasing competition in the automobile sector and home appliance the company
still charges a premium price for its product. The other companies like LG and Samsung
are continuously increasing their market size with quality products and low pricing
strategy. Bosch needs to review its pricing strategy and should lower its prices for home
appliances products. However, the company can charge high prices for automobile
accessories and motor parts. The company has huge opportunities some of the developing
countries in Asian like China and India, where the population is too high (Xu, Blankson,
& Prybutok, 2017). The market size of these countries is also greater than the German
and other European countries. Therefore, if the company will focus on proving quality
products on low prices, it can target a huge number of customers in the Asian market.
However, the competition in the automobile segment and home appliances products is
too high in all over the world, Bosch should review its marketing plan according to the
need and requirement of customers.
2. Bosch is a worldwide supplier of home appliances and automotive components, so it has
strong influence on various competitive factors such as suppliers, customers, competitors,
new entrants etc. However, to face the increasing competition in the market Bosch needs
to focus on mass advertising campaign. The technology is changing in automobile
industry (Zhang, Yang, & Chen, 2017). The car manufacturing company is now heading
towards the electronic and self-drive cars. In such scenario, the Bosch needs to focus on
new product development like electronic engines and AI-based automobile systems rather
than old technology systems. For this, the company needs to invest a huge amount on
R&D and should focus on developing innovative products. Although there are large
numbers of competitors of Bosch are working on developing the electronic-based
automobile system and AI-based system like Tesla, BMW, etc. The company needs to
advertise its product in various countries where it wants to spread its business.

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