Analyse growth objectives through economies of scale, market power, market share, brand recognition, profitability, finance and the risks of expansion.
Extract A What we do at Bosch Bosch is a German engineering and technology business that has over 420,000 employees worldwide. Its aim is to develop products that are 'Invented for life' to improve the quality of living for its customers.
Bosch has a wide product portfolio. Its consumer goods division manufactures household goods such as refrigerators, dishwashers, coffee makers, vacuum cleaners and garden tools.
Bosch's mobility division supplies parts and services to the automotive market. This earns Bosch the majority of its revenue. It is a market leader in the supply of car parts and software systems and has numerous manufacturing and engineering factories located around the world. Bosch is increasing its investment in the design of parts and software systems for electric cars and electric bikes, which are growing markets.
Bosch has announced that €950m will be invested in an engineering and manufacturing factory in Suzhou, China. The factory will create new jobs to make parts for electric cars.
Extract B Bosch has exceeded its sales forecasts despite many challenges over the last few years such as the global health crisis, supply chain problems and increasing costs of raw materials.
Selected financial data for Bosch 2021 and 2022
Extract C Investment in innovation Bosch states that 'one of its biggest strengths is its employees with their expertise, ideas, creativity and commitment.'The basis of the future growth of the business is its innovation. In 2022 it employed 76,000 employees worldwide in research and development (R\&D) and spent €6bn developing new products.
Extract D Ownership of Bosch Unlike many large businesses, Bosch has remained a private limited company rather than converting to a public limited company. It has a unique form of ownership. Ownership is shared between the Bosch family and a charitable foundation that does not have voting rights in the business. Most of the profits are either invested back into the business to build for future growth or donated to charitable causes.
Bosch announced that €950m will be invested in an engineering and manufacturing factory in Suzhou, China.
Discuss if this expansion programme is likely to result in internal economies of scale for Bosch.