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SFK BEARING SERIES: MARKET ORIENTATION THROUGH SERVICES: RESTRUCTURING THE BEFORE AND AFTER MARKET

SKF is a leading technology provider in the world since 1907. They had practical experience in over 40 industries in all technological platforms SKF bearings and bearing units, seals, mechatronics, services and lubrication systems.

In 1987 the things were not easy for SFK. They had to take a decision related to improve the profits and the assets of the company. Mauritz Sahlin an important executive of the company was the pioneer of this necessary idea of restructuring the company. He knows that the impact could be radical and the transition is not going to be easy for SFK.

The production was fully automated which is an advantage for the company but they didn´t have space for savings and expenditures. For another hand the company could not lay off workers because this can cause costly work stoppages. With these issues the convenient and a long term solution could be change the strategy starting with the production until market process. The new plan consists in split the company into three new areas. This decision is not easy for this reason they were ready for take risks and fight with the negative reviews.

For analyze the case is necessary start with the roots. In 1905 an engineer wanted to improve the products that in this moment were not of enough quality. Then he was looking for satisfied the necessities of the market and two years later the company set up to produce. They start making essential bearing for many industries and over six decades SFK was the leader of the market.

In the 60´s the company was centralized, the administrative location was in Goteborg and the other locations were only for manufacture (the machines were made for themselves which is a plus that improve performance and better techniques) that means that the target was restricted and without exportations. However SFK was prominent due to mass production based in quality and competitive prices.

When SFK realizes that the bearings had a five years life, they found the necessity of research and develop new products. The manufacturing location received and applied this issue They used to overdesign the product to make sure about necessities and specifications.

In the 70´s the Japanese companies entered the European market invading the SFK target. For this reason the company had to do changes to survive as cut costs, start to explore new markets (export) and apply the Japanese model which means that each plant is responsible for attend each specific market.

In the 80´s the drop of the oil affected the demand and therefore the pressure was there pulling the effective production, manufacture investment looking to survive to the economic situation and the competence. By that time SFK had 20% of the market share. They were so close to the Japanese competitors with 10% of the market share of the

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