Growth Strategies Case Study

Case Title:

Bharat Forge : Catalyst in Global Auto Forging Industry

Abstract:
India-based Bharat Forge Limited (BFL) was globally the second largest auto forging company after ThyssenKrupp of Germany. BFL was the flagship company of Pune- based Kalyani Group with interests in steel, steel-based products, forgings and automotive components. The company made a humble beginning in 1961 with a small plant in Pune. Over the years, the company became the second largest auto forging company, globally the second largest engine component manufacturer. It owned the largest single-location forging plant in Asia and globally the largest plant for manufacturing axles. Along with manufacturing forging items and components for automobiles and commercial vehicles, the company was also a global leader in producing components for railways, earth moving equipments, hydrocarbons, sugar, steel, coal, ship building, oil and gas, refinery and general engineering equipments. Globally, BFL was known for its operational excellence, technical supremacy and cutting edge know-how. The cutting edge technology and manufacturing excellence helped the company to become the preferred supplier of global automotive companies. It had an enviable buyers list from global automotive companies, like General Motor, DaimlerChrysler, Volvo, Mitsubishi Corporation, Toyota Motor Corporation and Hyundai Motors. It also had tie-ups, joint venture and technology sharing with leading auto component manufacturers and original equipment manufacturers like Meritor, Carpenter Technology Corporation, Rockwell International and Delphi Corporation. As a part of the growth strategy, the company opted for both green-field expansion and brown-field expansion. BFL made a few significant acquisitions globally to mark its presence. Among the list of the acquisitions, Carl Dan Peddinghaus, CDP Aluminiumtechnik and Imatra Kilsta AB were the most significant ones.

This case study discusses in detail about the expansion strategy of Bharat Forge Limited; how the company became the global leader in auto forging industry, management philosophy of the company, expansion strategy adopted by the company to become the global leader, business model of the company and glimpses of the domestic and global auto component industry. This case further offers a scope for discussion about the trends and strategy of the industry, strategy adopted by the company to become the market leader and how it leveraged its advantages to mitigate the pitfalls and limitations of the strategy.

Pedagogical Objectives:

• To discuss how Bharat Forge established itself as the second largest global forging company
• To understand the global structure of the auto component industry with the emergence of Tiers in the value chain
• To discuss how BFL started as a small supplier of mechanical equipments in 1961, transformed itself into the second largest global forging company in just four decades
• To assess how the company planned to change its business model by foraying into non-auto component sector as it had been highly depended on the automotive sector.

Keywords : Bharat Forge Limited (BFL); Original equipment manufacturer (OEM); Auto forging; Auto component; Tier 1 supplier; ACMA (Automotive Components Manufacturers Association); Delphi Corporation; Crankshafts; Single die forgings; Dana Kirkstall; CDP Peddinghaus; DaimlerChrysler; Growth Strategies Case Study; General Motors; Mitsubishi Corporation; Greenfield expansion

Contents: 
Bharat Forge Limited
Competitiveness of Indian Auto Component Industry
BFL: In Search of Operational Excellence
BFL: Diversifying in new segments
BFL: From Pune to Peddinghaus
Domestic and global clients of BFL
Auto Component Industry Structure (Turnover)