Svenska Kullagerfabriken Harvard Case Solution & Analysis

Svenska Kullagerfabriken


The company Svenska Kullagerfabriken (SKF Group) was founded in 1907. The main business of the company is to supply bearings, lubrications, seals, lubrication systems, mechatronics products maintenance and power transmission products. The company is the largest bearing manufacturing company that has a workforce of 44,000 employees. The company is present in 70 countries around the world with 100 manufacturing sites. The SKF Group currently consists of approximately 150 companies including the seal manufacturer Chicago Rawhide. Since the foundation of the company, it has been operating with its headquarters in Gothenburg. SKF Group is a leading international supplier of various products, services and solutions within rolling bearings, mechatronics, seals and the lubrication systems. These services include technical support, condition monitoring, and maintenance service. The technical development, marketing and quality have been the main focus of SKF Group since the beginning (Hart, C., 1998, 100).

The SKF Group has been quite keen and interested to put in their efforts in research and development that have resulted in various innovations by the company; which has formed bases for new standards, solutions and products in the bearing world. The group has been offering services that are focused on optimal management of assets throughout life cycle. Its basic upkeep administration aptitude has collected over numerous years and is systematically united in the SKF Asset Administration Support Device (AMST) system. As a worldwide information designing organization, SKF technology is utilized all through the world within differing provisions, from vitality wind ranches, seaward oil rigs, flying machine flight control systems, steel and paper plants, high velocity trains to clothes washers and a large number of bikes, trucks and autos. By joining together SKF's experience with their clients', the group can convey leap forward performance utilizing items and administrations from over SKF's primary zones of center specialized competence (Belair, 2007, 10).

Question 01: Identify the Product and Market for SKF Group and Summarize Its Business Types

Product for SKF

The lists of products offered by SKF Group are Bearings and Units, Seals Lubrication Systems, Mechatronics and Services.

Market for SKF

The bearing market is widely seen as the worldwide sales of rolling bearings, roller bearing assemblies of different designs, comprising balls, and it also includes the mounted bearing units. Therefore, SKF estimates that the overall global bearing market size will increase in 2013 with the volumes becoming relatively unchanged every year and will remain between SEK 300 and 330 billion. The automotive original parts in the bearing markets include the two and four wheelers, which account for more than 30% of the overall industry. The modern unique supplies bearing markets represented nearly 40% of world request and included: producers of light along with substantial mechanical machines and gear, aviation, off highway and track vehicles. Deals through distributors (modern conveyance and the free vehicle post-retail) kept up around 30% of world bearing interest, of which around 30% is identified with the vehicle administration market and around 70% is identified to the mechanical business (Hofstede, 2005, 60).

However, Asia’s share of the world bearing industry has been slightly unchanged and has accounted for more than 50% compared with less than 30% ten years ago. Whereas, China’s share of the total world bearing market has slightly slided down to exact 25%. However, Japan’s share of the overall world bearing market accounts for less than 15% of the overall bearing industry (Turnbull, 2006, 90). Similarly, other Asian markets with sizeable production of bearing products accounts for almost 10% of the industry. Countries included in this data are Thailand, India, Malaysia and the Republic of Korea (Hutt, 2005, 20). Chinese bearing market, which has been the largest emerging or the growing market that is a portion of the major international bearing companies accounts for almost one third of the market while the remaining two third of the market consists of a host of local and regional manufacturers. Among the largest suppliers, Luoyang (LYC), Zhejian tianma (TMB), Wafangdina (ZWZ), C & U and the Wanxiang Qianchao. Whereas, the bearing market of India has a market share of less than five percent (Hart, C., 1998, 100).

The players in the overall market include international manufacturers along with some local manufacturers that are ABC, NEI, TATA and the NRB. The bearing market of the Europe includes around 25% of the world market share with Germany possessing more than 10% share of the overall industry. Americans in the industry have a market share of around 20% in the industry with Mexico and Canada more than 80% of the European market (Warren, 2002, 30). In South America, Brazil manufactures the majority of the bearing industry goods with 60% of the regional demand. SKF Group has been the leader in the bearing industry with other major competitors that include: the Timken, NSK, JTEKT, Schaeffler and the NSK. SKF Group assesses that the top 6 world bearing producers represent about 60% of the worldwide rolling bearing business sector.....................................

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