group b3- skf bearings
DESCRIPTION
Group B3- SKF BearingsTRANSCRIPT
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Group Assignment SKF Bearing Series: Restructuring the Before and After market
Situation Analysis
SKF, the worlds largest bearing company, has envisioned a need for restructuring to improve profitability and return on
assets. The companys long term goal is to change strategic orientation from the production line to the market.
Limitations: 1. Production already rationalized & fully automated 2. Cannot pull back on R&D expenditure
Proposed Solution: Split the company into 3 areas:
1. Bearing Industries 2. Bearing Services 3. Specialty Bearings
Market Analysis
Aftermarket: The true cash-cow of SKF
The aftermarket can be divided into
1. Industrial Aftermarket (66% SKF aftermarket sales in Skr)
2. Vehicle Aftermarket (34% SKF aftermarket sales in Skr)
Recommendations for Industrial Aftermarket
At the Org level: 1. Enforce culture shift 2.Modify financial outlook 3. Build strong Marketing workforce
27%
32%
27%
14%
By Target Segment
Aftermarket-Automotive
OEM -Automotive
60% 20%
5% 15%
By Geography
Europe
North America
Sweden
Others
Product
Focus on production of speciality bearings for steel & paper mills, mines, railways and other industries
Knowledge management: On-site training & support
Price
Increase budget for marketing and charge significant premium to balance these costs
Charge nominal rates for support. Good handling and use of product will increase its life & premium is justified
Place
Marketing no more a cost center - build strong marketing workforce
Increase sales force and provide autonomy to handle factory and plant personnel
Incentivise distributors to "push" for SKF products
Promotion
Engage sales force in direct promotion model
Increase visibility among factory personnel, mechanics and engineers