ST 007-11 Lohr, 2011-10-27

Five times Local — Or How Rexroth Ensures Global Success

Dr. Karl Tragl

Dr. Karl Tragl

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

A company can achieve sustainable global success only by engaging in the local market — globalization certainly does not mean that every market is the same. In fact, globalization requires globally active companies such as Rexroth to be willing and able to adapt to local market conditions. "This requirement can essentially be divided into five points. We call them the 5Locals," says Dr. Karl Tragl, Chairman of the Executive Board of Bosch Rexroth AG.

Local Purchasing — Viewing Growth Markets as Procurement Markets

Potential business partners all over the world value the fact that overseas companies that are active in their region stimulate value-adding activities in the area. As a result of this aspect of Local Purchasing, growth regions should be viewed not only as sales markets, but also as procurement markets. It is therefore absolutely essential for overseas companies operating in these markets to buy locally and build up a network of suppliers.

Local Production — Getting to Know Market Requirements

This point is as fundamentally important as Local Purchasing and concerns the manufacture of the company's products in the relevant market. This also contributes to value-adding activities in the country. "However, local production also enables us to learn about the requirements of the specific market more quickly and thoroughly. In doing so we share our customers' requirements and fulfill them using solutions adapted to the region," says Tragl.

Local Engineering — Optimum Adaptation through Development in the Region

Of course, the product families developed centrally by Rexroth are finely scalable to cover a wide variety of requirements in terms of function and performance. However, time and again a problem will crop up that is unknown in established markets. In Tragl's opinion, this is key: "So that we can offer our customers in new markets the best solution, we are reinforcing our international development capacity with Local Engineering."

Local Commissioning — Commissioning in a Familiar Environment

When developing products adapted for local markets in the region itself, different challenges will also be encountered during commissioning than in the domestic market compared to market leaders. "With Local Commissioning, we are therefore counting on fast, professional, locally coordinated commissioning teams that are familiar with environment," explains Tragl. These teams are not only experienced in local conditions, special technical features and machine functions, but also understand the basic expectations of customers in the region.

Local Management — Prospects as Motivation

Rexroth has had a presence in Asia and South America for over 30 years, for example. The company employed local managers to fill almost all of the management positions in these regions. "Local Management is a key element of our global success," emphasizes Dr. Karl Tragl. "This includes consistent and credible personnel development, which demonstrates prospects to local associates."

Consistent implementation of the 5Locals is required in order to be able to successfully benefit from the globalization of value-adding activities. "This approach contributes to the growth of our company. It is also a prerequisite to safeguarding jobs in Germany," explains Tragl. In 2002, Rexroth employed around 15,000 associates in Germany. With unchanged sales, this figure has today reached 18,000.

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