Bosch Revs Up Its Security Engine
The Bosch Group has its motor running and is heading out onto the electronic security highway. Long and widely established as an automotive technology leader, the $34 billion (euro) German company’s acquisitions of Detection Systems Inc./Radionics Inc. and, more recently, Philips Communication, Security & Imaging (CSI) have kicked its quest to become a global security power into overdrive.
In Detection Systems (DS), Bosch gained a manufacturer that has been producing innovative access control, fire, CCTV, intrusion and integrated systems components and peripheral devices for the commercial and residential security markets for more than 30 years. DS’ recent moves to expand globally, including the 1996 purchase of Radionics, made the company very attractive to Bosch, which acquired it in 2001.
In Philips CSI, which operates in 35 countries and employs 1,300 people, Bosch gained a stronger foothold in the rapidly growing video surveillance systems and components market. In addition, the purchase is expected to open up additional avenues for Bosch to pitch its wares.
To coalesce it all and bolster its market position, the company has united DS/Radionics and Philips CSI under Bosch Security Systems, a division of Robert Bosch GmbH. Backed by more than a century of experience, a major commitment to research and development (R&D), and a truly worldwide presence, Bosch has joined the ranks of GE, Tyco, Honeywell and Siemens as the industry’s manufacturing giants.
However, Bosch has its work cut out to make its brand name as identifiable with security in America as it is in other parts of the world. The crux of that challenging task falls squarely on the shoulders of Bosch Security Systems President/CEO Peter Ribinski, an electrical engineer who began his career with the firm back in 1980 as a member of Bosch’s Communications Division.
To unravel what Bosch Security Systems has in store for the industry, how it intends to execute its strategy, and what it all means to existing and potential customers, SSI visited the company’s Fairport, N.Y., headquarters for an exclusive interview with Ribinski.
Among many things, the German chief executive—who professes admiration for the sound, consistent business philosophies of franchising behemoths McDonald’s and Starbucks—stresses his total commitment to making Bosch Security Systems “the easy-to-deal-with supplier.”
Bosch Security Systems: A Global Power Is Born
Security Sales & Integration: Let’s cut right to the chase; what was the thinking behind bringing Detection Systems and Radionics under the umbrella of Bosch Security Systems?
Peter Ribinski: Detection Systems and Radionics have always been strong brands; very well recognized and highly valued, but only in the United States. The mission of Bosch Security Systems is to become a global leader in the security industry. However, having the Bosch brand in Germany and the Detection Systems and Radionics brands in the States, along with some other smaller brands in other countries, is confusing to our international customers.Fortunately, we are starting from an advantageous position because the existing profile of Bosch Security Systems in the European market matches very well with the image Detection Systems and Radionics have in the U.S. market. Bosch already possesses the global brand awareness.Recent studies around the world have confirmed that the Bosch brand is known everywhere and that people associate quality, reliability, innovation and financial strength with that brand. So, it became a logical step for us to go forward with our own brand.
SSI: Was this Bosch’s strategy all along, or was it something that developed over time?
PR: It developed over time. We reviewed our strategy and the whole integration process at the beginning of this year. We discussed our original goals, how far we had come, what we did right and the lessons learned from those things that didn’t work out as expected.
SSI: Will the names of those product lines cease existing as we know them and be supplanted by the Bosch Security Systems name?
PR: Going forward, we will have a dual-brand approach. We will have Bosch Security products as well as Detection Systems products. Both will be high quality and clearly differentiated lines of products.
We have offerings in all product areas – intrusion, fire, access control, CCTV, alarm management, communication, bus systems; you’ll find a full catalog in each category for both brands. The full catalog will be a combination of products already familiar to the U.S. and global markets, allowing existing products from the Bosch line to be available to the U.S. market, and vice versa.
So the answer is yes, the Radionics product name will go away over time. It will remain on the market at least through all of 2003, but it is our goal to complete the migration into the Bosch family name shortly thereafter.
SSI: What is the marketing strategy going forward with dealers and integrators, and are you also going after end users?
PR: We will not change our current marketing strategy, which means we are selling to dealers and integrators only. We are not selling to end users.
Our general go-to-market strategy remains unchanged: sell through distribution, dealers and integrators. However, while certain Bosch-branded products and components that are interchangeable with other components on conventional interfaces will be available through distribution, Bosch systems will not be widely available. These systems will only be sold through the Bosch Certified Security Dealer Network.
SSI: So, really, the bottom line is that things are staying the same, but being enhanced in many ways.
PR: That’s exactly right. Enhanced by technology and enhanced by new services. I can’t say it enough, we want to become the easy-to-deal-with company.
Market Entry Facilitated by Detection Systems Acquisition
SSI: Let’s step back a little in time. What attracted Bosch to Detection Systems and vice versa?
PR: Bosch was and is a leading supplier in the security industry, but was limited to the German market and a few other European countries. One of Bosch’s weaker points was that, in certain areas, we were dependent on third-party suppliers. This made it difficult to fulfill our strategy of becoming a leading international supplier.
With Detection Systems and Radionics, we found competence in technology. We found great brand reputation and awareness, especially in the U.S. We also found an international footprint that DS had started about six years earlier, with the build-up of subsidiaries in 14 countries.
The acquisition was a perfect fit, with complementary technology skills and a widespread, international sales effort. That was the main attraction.
SSI: I have heard that Bosch reinvests about 8 percent of its revenue into R&D each year. I imagine the prospect of having that level of product development as a resource was quite intriguing to Detection Systems, which has already had a history of innovation.
PR: You’re absolutely right. That was an important element in creating enthusiasm from the get-go. We have combined the technological competence of DS and Radionics with all the Bosch competencies. Engineers from both companies have found plenty of interesting work to do since the deal first took place.
Culture Collision Fosters Friendly Competition
SSI: How smooth has the transition been in bringing Detection Systems into the fold, particularly considering the language and cultural differences?
PR: At the time of closing, we assembled teams from both companies. We had an American team join us in Germany, with more than 30 people sitting together in a workshop f
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