ST 010-11 Lohr, 2011-12-13

Growth Through Change

Dr. Karl Tragl

Dr. Karl Tragl

Dr. Karl Tragl, Chairman of the Executive Board of Bosch Rexroth AG

The year 2011 was characterized by its fast pace. It has become clear that companies are facing a more rapid pace of change than ever. We must adapt to new market conditions quicker and more frequently than ever before, and our ability to change—strategically, organizationally and technologically—is what determines our success.

In the rapidly growing markets of Asia and South America, we are experiencing accelerated technological changes. Instead of high-end European solutions, customers are focusing on what are known as "just enough" concepts, which provide an application-oriented range of functions with high productivity and manufacturing precision. Bosch Rexroth develops these "just enough" solutions on-site. They are based on global product platforms and allow us to tap into new regional market segments.

The significant amount of pressure for machinery and equipment manufacturers to change is something I have also noticed in meetings with customers. Economic cycles have become shorter and more extreme. The volatility of the markets is presenting the industry with new challenges. One consequence is that machinery manufacturers must make their overall engineering process shorter and shorter, from the initial idea to final delivery. Furthermore, the megatrend toward achieving higher energy efficiency and conserving natural resources is becoming increasingly dynamic throughout the world. Our response to this development is the Rexroth for Energy Efficiency (4EE) universal system for all drive and control technologies.

The greatest opportunities for growth over the coming years are sure to be in the BRIC countries. Machinery manufacturers can take advantage of these opportunities only if they develop regionally adapted products and solutions at these locations. In order to keep within costs, they must implement the 5 Locals in these regions: That means using local resources to build up purchasing, development, production, commissioning and management in the region. Companies that globalize their value chains in this way achieve markedly higher growth in the long term. They transform from German manufacturers to multinational companies that have all their central functions in Germany, and then finally to global companies with regional production, development and service capacities that are located close to the market. This globalization of value-adding activities means that machinery and plant design will grow over the next few years. Such growth safeguards existing jobs and creates additional jobs in Germany.

The accelerated pace of change means that corporate culture will also have serious challenges to face. At Bosch Rexroth, our guiding principle is to be a company that feels at home in every country. Our corporate identity and shared values must therefore break away from individual sites. It is important to live the basic principles on a global scale and to allow for regional distinctions to a certain extent. The corporate culture of Bosch Rexroth, which has been built up over more than 200 years, is strong enough to withstand this process of globalization, and it will determine the actions of associates in Germany, Europe, the Americas and Asia over the long term.

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