s also initiate research and development collaborations with suppliers and now ask them to manage sub-suppliers. We argue that the German automotive supplier industry is representative on a global scale and the findings in the paper show that only a small percentage of the players focuses on cost leadership. Instead, most companies follow a strategy of having high quality and innovative products. But, very big companies can apply a hybrid approach and use both, cost leadership and differentiation strategies (Lay & Wallmeier, 1999). Roland Berger and Lazard point out that automotive companies exercise a lot of price pressure on suppliers which forces them to engage in aggressive pricing strategies in order to survive (Roland Berger/Lazard, 2010). Due to the previously discussed details about Bosch's size we can infer that the company belongs to the differentiation strategy group.

According to a study conducted by Roland Berger the size of the global automotive supply market is expected to increase from €406 billion in 2010 to €684 billion in 2025. This results in a compounded annual growth rate (CAGR) of 3.3%. Both, powertrain parts and exterior supply components continue to account for the largest share in sales (Bernhart, Hoffmann, Kalmbach, & Kleimann, 2011, p. 36f). Hence, it could be argued that Bosch should invest more in its research activities related to these two areas.

After a sharp decline in revenue during the crisis which results in around 350 bankruptcies, sales in the automotive supplier industry now reach the pre-crisis level. In general, the market is highly fragmented and the earnings before interest and tax (EBIT) margin is around 6% (Roland Berger/Lazard, 2010). The competitive situation for process-focused segments is nicely illustrated by the following figure.

Figure : Market share distribution per segment (top 5 players and the