Robert Bosch Engineering, India (RBEI) – An Innovative Frugal Engineering
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.
- • 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
- • “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
- 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. ....................
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.........