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Robert Bosch Engineering, India (RBEI) – An Innovative Frugal Engineering

CASE STUDY, STRATEGIC MANAGEMENT
'Prin. L.N. Welingkar Institute of Management Development and Research', 16 pages

Case Preview

Robert Bosch Engineering, India (RBEI) – An Innovative Frugal Engineering

 

In January 2014, Arun Kumar Bhat V. S. (Bhat), the General Manager of the Engineering Emerging Market Projects (EME) department at Robert Bosch Engineering and Business Solutions Limited (RBEI), was preparing for his quarterly regional review meeting with the RBEI management. These regional review meetings were an important tool for keeping managers focused on achieving the aggressive productivity targets. The purpose of this review meeting was to discuss each department’s yearly targets and the respective plans to achieve them. As Bhat was confident of his department’s capabilities, he had set EME’s 2014 annual engineering productivity targets1 10 % higher than the previous year’s target (Exhibit I). The idea was to improve engineering productivity and thereby deliver more projects at the same cost.

Exhibit I: RBEI/EME 2014 Targets
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RBEI, one of Bosch group’s six subsidiaries in India, was established in 1998 in Bangalore, India. Since 2004, the EME Department at RBEI had been tasked with  designing and engineering mechatronic2 automotive products tailored specifically to meet the needs of emerging economies. EME operations were integrated with two other Bosch entities — Robert Bosch Automotive Limited (RBAI), which manufactured its engineered products and Robert Bosch India Limited (RBIN), in charge of regional coordination and external sales of EME’s products. The revenue generated by EME mechatronic automotive products were maintained in RBIN’s accounts (Exhibit II)........................

Exhibit II: Organizational Connect between the Three Divisions of Robert Bosch — RBIN, RBAI and RBEI
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1 Engineering productivity targets were set with respect to number of projects in hand. For example, if EME completed 100 projects in 2013 in 1,000 man-hours, it wanted to improve its engineering productivity by 10 % in 2014, i.e., execute 100 projects in 900 manhours.
2 Mechatronic automotive product design included a combination of mechanical, electrical and electronic control aided by embedded software and control algorithms

Teaching Note Preview

Robert Bosch Engineering, India (RBEI) – An Innovative Frugal Engineering

 

Synopsis

The case is about Engineering Emerging Market Projects Department (RBEI/EME hereafter referred as EME) of Robert Bosch Engineering and Business Solutions Limited India (RBEI), India. RBEI was one among the six Robert Bosch GmbH- Germany, subsidiaries in India. They had set up operations in Bangalore, India in 1998 as a captive centre of the parent company. For over a decade, RBEI played the role of an extended workbench for the various software and engineering services/requirements of the worldwide Bosch units. Since, 2004 the EME department at RBEI had been tasked with designing and engineering  mechatronic1automotive products tailored specifically to meet the needs of emerging economies. The EME operations were integrated with two other Bosch entities - Robert Bosch Automotive Limited (RBAI) for manufacturing of their engineered products and Robert Bosch India Limited (RBIN) for regional coordination and control and external sales of their products. EME currently had only engineering targets and the revenues generated by EME mechatronic products were retained in RBIN accounts.

Arun Kumar Bhat VS, had taken over as the General Manager of EME in 2010. EME had contributed well to the growth of RBEI and RBIN in the last decade. An important dimension of this success had been their dedication to the process of innovative frugal engineering. Their ability to drive out the unnecessary costs, and engineer robust and quality products to fit the unique demands of the emerging economies was significant to the needs of the entire automotive value chain. Bhat had realized that the ‘low lying fruit’ of frugal engineering had been successfully harvested. To maintain a commitment to driving down costs, there was a need for new external and internal market based solutions. The organizational structures at Bosch India made exploiting the results of their innovative frugal engineering on a global level quite challenging. The question was whether RBEI management was ready for such steps.

Expected Learning Outcomes

  • • The external market dynamics and the internal challenges/implications faced by an established captive division of a multinational enterprise (MNE) for continued success, depicted in the case by mapping EME Department, RBEI
  • • The concept of frugal engineering, its importance/need in emerging economies and the growing significance of these emerging economies as a market in themselves
  • • Examine how organizational structures facilitate or impede a MNEs ability to export product developments that originate in emerging markets into more developed nations
  • • Explore how emerging market subsidiaries, such as those in India, can be a rich source of unique research and development for their MNE network
  • • The importance of location economies when MNEs are developing emerging markets
  • • Gain insight into the changing nature of the automobile industry as it becomes increasingly interwoven with the electronics industry and explore the merging and shifting boundaries of industry

 

Case Positioning and Setting

This case can be used at the Undergraduate, Graduate and Executive Education level courses that have a focus on Emerging Market Innovation and Corporate Venturing by MNEs operating in emerging markets.

Suggested Readings

  • • David Court and Laxman Narasimhan, “Capturing the world’s emerging middle class”, The McKinsey Quarterly, July 2010
  • • Kaushik Mukerjee, “Frugal Innovation: The Key to Penetrating Emerging Markets”, Ivey Business Journal, Reprint9B12TD05, July/August 2012
  • • Kirsten Bound and Ian Thorton, “Our Frugal Future: Lessons from India’s Innovation System”, Nesta, July 2012
  • • Vikas Sehgal, et al., “The Importance of Frugal Engineering”, Strategy+Business, http://www.strategy-business.com/article/10201, May 2010

 

Mandatory Viewing

  • • “Robert Bosch Engineering, India (RBEI): Innovative Frugal Engineering: Personal interview transcripts from conversations with Arun Bhat vs at RBEI/EME”
  • • Secondary data found in industry reports, academic papers, news corporation websites, and business or organization websites

 

Assignment Questions

  • I. What do you understand by ‘Frugal Engineering’? What is unique to the customer needs in emerging economies? What issues should a MNE manage well for success in emerging economies?
  • II. How is the process of innovative frugal engineering managed along the automotive value chain at RBEI/EME?
  • III. How was the market prospect of the automotive industry in India as well as globally? What were their implications for the various value chain players in the industry?
  • IV. ....................

 

Teaching Plan

The teaching plan Exhibit (TN)-I is based on a 90-minute session. The assignment questions are intended to guide the students through the important issues.........

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Abstract


The case study details the situation faced by Emerging Market Projects Department of Robert Bosch Engineering and Business Solutions India (RBEI), India in January 2014. RBEI, one of the Bosch group's subsidiaries in India, was established in 1998 at Bangalore, India. In 2004, RBEI had been tasked with designing and engineering mechatronic automotive products tailored specifically to meet the needs of emerging economies. Operations were integrated with two other Bosch entities, one which manufactured its engineered products and another unit which was in charge of regional coordination and external sales of the product.

An important dimension of this success was their dedication to the process of innovative frugal engineering. Their ability to drive out the unnecessary costs and engineer robust and quality products to fit the unique demands of the emerging economies was significant to the needs of the entire automotive value chain. RBEI, had realised that the 'low lying fruit' of frugal engineering had been successfully harvested. To further maintain a commitment to driving down costs, there was a need for new external and internal market based solutions. The question was whether RBEI management was ready for such steps.

The case study allows one to appreciate the concept of frugal engineering, its importance/need in emerging economies and the growing significance of these emerging economies as a market in themselves. Understanding key functionality and developing one platform for BRIC countries for volume/scale for many small OEMs. Competencies required for end-to-end development (software, hardware and mechanical), validation and manufacturing was key.



Pedagogical Objectives

  • To understand the external market dynamics and the internal challenges/implications faced by an established captive division of a multinational enterprise (MNE) for continued success, depicted in the case by mapping EME Department, RBEI
  • To comprehend the concept of frugal engineering, its importance/need in emerging economies and the growing significance of these emerging economies as a market in themselves
  • To gain insight into the changing nature of the automobile industry as it becomes increasingly interwoven with the electronics industry and explore the merging and shifting boundaries of industry

Case Positioning and Setting

This case can be used at the Undergraduate, Graduate and Executive Education level courses that have a focus on Emerging Market Innovation and Corporate Venturing by MNEs operating in emerging markets.




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- Abstract
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- Teaching Note (**ONLY for Academicians)
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