In 2007, the worldwide restructuring of the Bosch Group developed various challenges for its India’s division of Starter Motor and Generator (SMG). The case traces the circumstance faced by the division as a result of this restructuring. The other divisions of Bosch Limited had been cross-subsidizing SMG since its inception as SMG itself had not marked any revenue for 22 years and always accommodated as part of the company’s operations in India. After the restructuring, SMG became a portion of the global product division.
The local management had to devise such strategies that could prevent the implementation of the pathetic decision of shutting down this division. They were needed to incorporate the strategic and operational reforms to ensure the survival of the division as now it had no incentives to bear the continuation of the loss. This case explains the reactive approach pursued by the management to develop the division and its bottom line. It also discusses the strategic decision for the implementation of a new business model that results for the company’s structure that was utilized by it.
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