VOLVO GROUP PRESENTATION
Parent Company: Geely
Type: Publicly traded
Founded in 1927
Headquarters: Gothenburg, Sweden
Area served: Worldwide, 120 countries
Network: 2400 dealers: 1500 in Europe and 400 in the USA
Manufacturing Plant: Goteborg (Sweden) & Ghent (Belgium)
Chairman: Carl-Henric Svanberg
CEO: Olof Persson
Number of employees (2011): 98, 162 / 20,000 (2008) Many based in Sweden
Competitors: Volkswagen’s Audi, General Motor’s Saab, Toyota’s Lexus,
Target Group: Young business executive with a comfortable income and a taste
Modern Scandinavian design
= Where they differentiate
= Qualifiers (Essential for
any competitors in the
premium market segment
“Create the safest, most exciting car experience for modern families”.
• Create shareholder value by optimizing the cost of capital in the Volvo Group.
• Limit the impact, but also take advantage, of macroeconomic developments
under stipulated risk mandates.
• Provide the Volvo Group companies with treasury and cash management
“To be the world’s most desired and successful premium car brand”
To be a world-class provider of treasury services, valued as the natural and
integrated business partner to the Volvo Group companies.Volvo also aims at
being the World Leader in sustainable transports solutions.
• creating value for customers in selected segments
• pioneering products and services for the transport and infrastructure
• driving quality, safety and environmental care (Values)
• working with energy, passion and respect for the individual.
WANTED POSITION 2020
• The most profitable in our industry
• Customers’ closest business partners
• Captured profitable growth opportunities
• Proven innovators of energy-efficient transport solutions
= Global team of high performing people
Quality as a core value
“Focus on the customers' needs”
Quality is an expression of our goal to offer reliable products and services. In all
aspects of our operations, from product development and production, to delivery
and customer support, the focus shall be on customers' needs and expectations.
“Our goal is to exceed their expectations”
With a customer focus based on everyone's commitment and participation,
combined with a process culture, our aim is to be number one in customer
satisfaction. This is based on a culture in which all employees are responsive and
aware of what must be accomplished to be the best business partner.
Safety as a core value
“Safety is part of our soul”
Safety has been our guiding star since 1927. The Volvo founders stated that
“Safety is and must be the basic principle in all design work”.
”Our vision: Zero accidents” We have worked diligently for more than
80 years to develop increasingly better protection for people in the case
of an accident.
Our Accident Research Teams have given us good insight into the causes of
accidents and injuries — and what can be done to prevent them. Our products
are built to minimize the consequences of accidents. In recent years we have
also launched intelligent safety systems with the potential to prevent accidents
from happening in the first place.
Our ultimate goal is zero accidents with Volvo Group products. This vision of
zero accidents guides our product development. We are committed to work hard
to prevent accidents, but we are also aware of the fact that most accidents
involve factors that are out of our control. Therefore, the Volvo Group cooperates
with users, authorities, scientists and other actors in society who want to create
a safer world.
Safety innovations: A series of pioneering safety innovations has made
Volvo a world leader in automotive safety over the years. It is our firm
ambition to maintain this position.
The new Volvo FH series: “The world’s safest Volvo.”
The new cab is Volvo’s strongest so far. And the world’s toughest crash tests
show that drivers have a good chance of survival in an 50 mph crash with a
Environmental care as a core value
We all depend on transports
Smoothly functioning transportation is one of the cornerstones of modern
society. The distribution of daily supplies to people in cities, the trade between
companies and the personal mobility are all examples of how dependent we are
Core value Environmental care is a Volvo Group core value. Already in the
mission statement, we state: " we use our expertise to create transport-related
hard and soft products of superior quality, safety and environmental care".
Volvo has a responsibility
As one of the world's biggest manufacturers of heavy commercial vehicles, Volvo
bears a clear responsibility for reducing the environmental impact of its
products. However, a long history of proactive environmental programs has also
provided us with an opportunity of strengthening both our own and our
customers' competitiveness, while contributing to positive societal development.
Taking the lead to reduce climate impact
The Volvo Group is the first heavy duty vehicle manufacturer to develop seven
different demonstration trucks that can all be driven without any emissions of
climate-impacting carbon dioxide.
A VIEW ON VOLVO CARS SALES
By Market 2009
Sales 2010 (2009)
By Model 2010
Prices from Sales
Most interesting Market:
China: 36% sales increase
Belgium: 35% sales increase
Russia: 54% Sales Increase
Others: 14% Sales increase
XC60: Price is not a factor of choice
Sophistication for the discerning driver
Enhance your XC60 with Inscription, Volvo's collection of exclusive interior and
exterior details offering the best in Scandinavian design and craftsmanship.
Designed to thrill
The XC60 R-Design sport chassis is made to get your pulse racing. But before you
even turn the ignition the sporty seats, pedals and steering wheel will put a smile
on your face. This is a car for the love of the road.
Crossing the line
The XC60 takes a new approach to design – combining the high waistline of the
XC range and the sporty contour of the coupes. It’s the physical manifestation of
an idea that encompasses active life and a love of style.
Watching out for you
In slow moving traffic City Safety pays attention – even when you don’t. By
constantly monitoring the traffic ahead for slowed or stopped vehicles it applies
the brakes to help avoid a collision.
Innovations for the love of driving
Sporty driving or cruising? With three settings for different driving styles and
surfaces you get the most out of both curvy mountain roads and long motorways.
It’s technology for the pure love of driving.
INTERNAL MICRO ANALYSIS
Established brand Trust
Product under different brand
High safety standards
Highly involved in Research
Offer high quality Customization
Interactive brand (with customers)
Excellent service (SAV)
Identity crisis/ confusion
High Price /economy state
Strict and definite position
Market expansion BRIC Countries
Long term impact environment (awareness)
Competition big international
Price of oil, fluctuation
Interest rate (separate payment
no Loans from banks)
New technologies available
Fuel concern (decrease consumer cost)
Weaknesses to strengths&Threat to
Urbanization/ demographic changes
Climate change / environmentally friendly,
Strategic use of resources (Potential shortage)
Increase cars numbers and accident rate = Security
and safety, technology systems
Government tax initiative (eco-friendly prices
Industry Challenges: Adaptation Strategy
In today’s economy, the car industry faces some challenges and difficulties that
will need to be overcome by Volvo if the company wants to survive in the long
Use the impact of Globalization at our advantage (negative and positive)
Increasing regulation on (environmental taxes and government initiative)
Growing environmental issue (Offering alternative to limit negative
impact on the environment)
Rising fuel prices (Offering other energy alternatives. Ex: electricity)
Rising commodity prices (Offering and using cheaper alternatives)
Increasing accident rate (Marketing strength to “shock” people and use it
as a tool of persuasion)
MCKINSEY 7S MODEL
1) Strategy- In order to maintain and build competitive advantage over the
competition Volvo plans to once again become the industry leader in safety, the
brand that gives the company first car with a safety cage, the first car with front
and rear crumple zones, the first to offer safety-door-locks, and the first to offer
SIPS-Side impact protection System.
At the same time company focuses on maintaining energy efficiency and healthrelated technology through alternative fuel types and reduced emissions, so that
Volvo will keep placing its emphasis on creating a safer world in relation to
environment and driving.
The company lays the foundation for developing Volvo group into the world’s
leading provider of sustainable transport solutions.
2)Structure- The Volvo Group’s business activities are organized into six
business areas: Group Trucks, Construction Equipment, Buses, Volvo Penta,
Governmental Sales and Volvo Financial Services. Concentrating only on the car
sector we see that the company has it headquarters in Sweden but branches in
several countries. The main office manage the global strategy of the group but
the day to day decisions are made locally by directors and managers.
3)Systems- On the daily basis staff members involve in activities such as
creating business plans, following up on the businesses, setting targets etc. Daily
activities vary according to the departments, for example financial department
works on finding the ways to fund business in the markets. This includes
working with external banks and export trading agencies. Much of the time is
spent on decision making for financing Volvo Group customers in company’s
4) Shared Values- Quality, safety and environmental care are the values that
form the Volvo Group’s common base and are important components of the
company’s corporate culture. The values have a long tradition and permeate in
the organization, its products and the way of working. The company goal is to
maintain a leading position in these areas. The Volvo Group views its corporate
culture as a unique asset, since it is difficult for competitors to copy.
Quality is an expression of the company’s goal to offer reliable products and
services. In all aspects of the operations, from product development and
production, to delivery and customer support, the focus shall be on customers'
needs and expectations.
With a customer focus based on everyone's commitment and participation,
combined with a process culture, Volvo’s aim is to be number one in customer
satisfaction. This is based on a culture in which all employees are responsive and
aware of what must be accomplished to be the best business partner.
5) Style- "We are empowered. Every colleague participates in setting goals and in
meeting commitments. Every individual contributes by working together with
others towards common business goals." (www.volvogroup.com) the style of
leadership adopted within the Volvo Company is- participative leadership. Every
employee is free and encouraged to bring his/her ideas, innovation, and
creativity to the work in order to reach certain goals; since all the members are
empowered to participate in decision-making and bring profit to the
organization. Empowerment enables all employees to contribute to their fullest
potential irrespective of gender, nationality, ethnic origin, sexual orientation or
age. Human Resources Manager Maxine Knowles commented “This year we
scored highest in terms of how people felt about the company and its’ leadership
with extremely positive responses. This is testimony to the values and ethics of
the Volvo Group, which filter down within the organisation and the work we do
to make our employees feel valued and engaged.”
6)Staff- Every employee at Volvo organization is part of a team. As a team
member, work is more and more characterized by actively taking part in the
company's development, change and future. In order to create a working
environment that supports this, company is manly working with employees of
energy, passion, and respect for the individual.
7)Skills – the employees of the Volvo Company are the people educated in the
spheres like mathematics, science and technology. They build competitive
organization by having the employees of creative, leadership, multicultural skills
who have an experience and different perspectives.
INTERNAL MACRO ANALYSIS
PORTER’S 5 FORCES
Supplier Power – The power of suppliers is low, especially after the company
has been acquired by the Chinese firm Geely. Thus, by entering the Chinese
market, Volvo will have the opportunity for collaborating with Chinese suppliers
that will most probably offer lower prices than the European ones. Therefore, it
is Volvo that dictates terms rather than their suppliers.
Buyer power – Considering the fact that Volvo is operating in over 120
countries and dealing with a huge number of buyers, we can conclude that the
buyer power is pretty high. Even though Volvo is offering innovative, safety
enhancements and more environmental friendly products, the substitutes
offered by competitors are large. As a result, the buyers have a lot of options to
choose from and definitely have a power over Volvo.
Competitive Rivalry – The rivalry in the automobile industry is very high. Volvo
has various strong rivals, such as Audi, Saab, Lexus, Mercedes-Benz, and BMW
(mostly cars offering similar features and quality for more or less the same
price.) Volvo’s positioning statement that they are offering the safest cars in the
market is threatened because there are other companies offering high safety
standards as well, such as Renault. Therefore, Volvo is not immune on rivalry
pressure anymore, in fact it is more influenced than ever.
Threat of Substitution – The threat of substitution is always present in this
industry. Especially in big cities people tend to switch to other transportation
options and avoid using cars. However, this is not a serious threat for Volvo
because their target market are rather family people whose need of having a car
is higher. Furthermore, if referring to the US, it is notable that mainly country
people are keen on buying Volvo, which means their options of substitutes are
less. Therefore, the threat of substitution (such as public transport) is certainly
not excluded, but yet we can say that it is not very high for Volvo because their
target market are mainly people with a higher need for a big, safe car.
Threat of New Entries – Entering the automobile market is certainly very
complicated with extremely high costs. It requires expertise, it is time consuming
and it is expensive. Furthermore, it is very risky because it was proven over the
years that consumers tend to trust more to the companies with more tradition
and experience in the car manufacturing (Mercedes-Benz for instance.) In this
sense, the threat of new entries is not a serious problem for Volvo. They are
affected by the already existent competitors rather than from the upcoming.
Their long presence in the marker gives them a certain advantage over the
newcomers (when having such) so this is not a big threat for them.
Growing environmental concerns are forcing governments around the
world to introduce harsher regulations for the automotive industry.
These include strict regulations on carbon emissions, increased taxes for
cars with higher carbon dioxide emissions, rise in insurance prices and
new safety regulations. Volvo's main markets (US and Europe) are
affected by the above the strongest.
Government foreign policies are important to the industry. There are
extreme tax policies adopted by developing countries for local automotive
Low - emission cars benefit from tax incentives, such as free road tax,
lower insurance prices, free parking and so on.
BRIC economies are gaining substantial power against of those of the
2008 economic recession has hit the automotive industry immensely.
Many companies field bankruptcy and many auto brands have
Fuel prices are on the rise.
Commodity prices are on the rise.
China is on the rise to become world's largest economy. Other BRIC
economies are also experiencing high growth rates.
As the recession is over, we can expect world-wide economic recovery.
However the uncertainty remains high.
Flat growth rates in developed markets, but good prospects in emerging
markets such as Asia.
Socio - cultural
Declining birth rates are seen within Europe and USA.
Smaller families and childless couples are becoming more and more
"Many cars on the road today are used by singe occupants, commuting to
work" ('Volvo Case Study, n.d.)
People are becoming more conscious of their environmental impact and
they are becoming more eco- friendly.
More eco friendly technologies are introduced at an increasing rate.
Shared technologies can provide substantial benefits.
Focus is placed on improving energy efficiency and health- related
Availability of new materials and recycled materials for production can
provide many possibilities.
Self- driving vehicles are on the way as such technologies are being
developed by major corporations.
Volvo is connected with the idea of big boxes on wheels. According to the data
the average Volvo owner is middle aged with 2 and a half kids and a dog. In order
for Volvo to increase its market share, they should be aware of the changes in
customer desires. Volvo has produced through the years big estate cars with big
engines and safe cars. They tend to go more for the functionality rather than the
style. The customer's needs have changed, and Volvo has to adopt if they want to
be successful. Volvo has been successful in US, because the customers like big
cars, which they relate with success. “Big car, big success”. In the last decade
customers have started to use smaller cars due to different factors:
Fuel costs: With the increase in fuel cost, it has become more expensive to drive
a big car, and as a result customer tend to buy smaller cars, which have more fuel
Economic Crises: Also the economic crises in the last 5 years has decreases the
buying power of customers. Big cars are usually more expensive than smaller
cars, and since the resources are limited for the customers, they want to spend
less for a car, and smaller cars are cheaper.
Environment awareness: Customer now care more about the environment, and
smaller cars produce less CO2 emission than big cars. Customers tend to buy
more eco friendly cars, like Toyota.
Smaller families: In the western countries families have become smaller, due to
the decline in the birth rate, and the need for bigger cars has decreased.
Government incentives: Governments are implementing policies that penalize
the use of big cars due to the environmental issues, and at the same time the
governments are providing incentives to the customers to buy smaller and more
eco friendly cars.
The Volvo Car Corporation is one of the car industry’s strong brands. The
company is committed to :
Support Business Areas and maximize Customer satisfactionthrough
superior product performance and excellent service
Offering customers the best value in selected segments
Sound portfolio structure/renewing of the groups product portfolio
Supporting safety of the community and the protection of environment
Stability in earnings over a business cycle
Developing the talents of its people through employee empowerment,
working with energy and respect for the individual
Profitability in all business segments
Opportunity in Asia (growing economy)
Increase in environmental concern (new products)
Social changes especially in Asia, less kids (new products)
Flat growth/ recession in Western countries (Market dev)
Rising prices of petrol (new energy needed)
Tax inventive for ecological car purchase
Promote safety through road car accident concern
Objectives for the Differentiation strategy
Introduce new products: Due to the changes in the customers demand,
VOLVO has to introduce new products, in order to satisfy the
expectations of the customers and increase their market share.
New markets: In the last decade there have been a lot of changes in some
countries. The BRICS countries have had a high economic development
and as a result the disposable income has increased. This is a good
opportunity for VOLVO to increase its number of customers, which would
result in a higher market share.
Innovation: VOLVO is known for its innovation strategy, but as the
consumers’ expectation are getting greater and the competitive in this
sector is very high, Volvo has to constantly improve. VOLVO has to use its
competitive advantage, like SAFETY or ENVIRONEMENT but should also
develop it further and further. They have to offer unique product that the
competition will need some time to catch up on.
PORTER’S GENERIC STRATEGY
Providing high quality service (as it is a strength)
Highly engaged in innovation (not priced focus)
Safety innovation and research
Ecological / environmental system and product dev
Target a broad market
Narrow markets are highly competitive especially luxurious one
Safety as well as ecology is a universal concern and should be available for a
wide consumer group.
In order to pull off this differentiation strategy it is important to have these
following characteristics already in place in the company.
As Volvo has the following characteristics, the differentiation strategy is
achievable and could permit the company to grow.
• Good research, development and innovation.
• The ability to deliver high-quality products or services.
• Effective sales and marketing, so that the market understands the benefits
offered by the differentiated offerings (achieved through Volvo marketing
Effective segmentation requirements: Following a MASH analysis
Through secondary sources made by local statistics center, the
World Bank or other independent organization, we are able to measure all of our
data. For example, to measure how important is safety and ecology to a society,
we will find out how many household recycle, uses solar energy power, eat
organic food… Through sample, questionnaire and research, the data collected
are easily measurable.
The segment we decided to work on has fairly high degree of
accessibility. The information about this segment can easily be accessed and
through our marketing strategy we are able to serve that particular segment
Our segment is fairly large within our operating market. We are
targeting a quite broad audience and is sufficient enough for Volvo to be
profitable and serve in this particular market.
We have tried to come up with a segmentation that serves
segment members as being as much as possible internally homogenous.
Nevertheless as we are not going for a mass marketing strategy, we do not
emphasis on homogeneity through our campaigns.
Better understand and identify our consumer’s need
In order to create:
Strong brand name
Greater market share
Cross selling solutions
Pre family / Family
Household / employees
C2 to B class
Mostly Urban people
Mainstreamer / Explorer
Busy life / active lifestyle
Looking at the “sagacity lifestyle model”, we decided to target pre-family and
family. This lifetime segmentation corresponds to the values Volvo embrace
and the car developed by the company is exactly what people like that will
Household as well as workers is also our target group. Volvo focuses on
groups belonging to (upper) Middle class, lower middle class and skilled
Volvo is not a big enough brand to wider their audience as much as they
want. By concentrating on urban people, we give the best shot for people in
town to realize about the pollution. Our values and main product
characteristics support our segmentation all the way. We want the
mainstreamer to buy our model because they are the one that could best
represent the company. They are conformist, conventional and want to be
part of the mass. We would also like to attract the explorer. They are
energetic, have autonomy and like challenges. Volvo group like challenges as
well and nothing is impossible for us.
Green political parties /socialism
Risk yes, but with safety
Club and social community
Like to participate
Team sports / Team work
Adventurous but with a need for comfort and safety.
Taster and evaluator
Advantages of the psychographic segmentation:
Psychographic segmentation gives a much better insight into the consumer as a
person, which enable the brand to identify and underline the needs and motives
of the consumers.
It delivers a much better understanding of the consumer, which in turn creates
more valid and responsive segments and will enable the company to plan
marketing programs accordingly. Furthermore Volvo has the tool needed to
achieve this segmentation: skilled researchers.
The information collected will help us not only to develop our product
accordingly but also to communicate and plan our strategies accordingly. We will
use this knowledge to create competitive advantage in every sector of the
Because Volvo is operating in different market and the targeted audiences in
these markets are not similar, are not looking for the same characteristics and
perceive cars differently, Volvo has to go for a differentiated marketing strategy:
Differentiated Marketing Strategy
Because we plan to go into different markets, more especially in BRIC countries
and the audience will not be the same our strategies have to be different.
Volvo has an effective and high skilled team, therefore they have the potential to
do it for the European Market, however for BRIC countries they can always
contract private marketing companies, which are expert on the local
Volvo does not offer the same products in China as they do in Europe, for the
only reason because the consumer’s need and desire are not the same. As a result
our marketing mix campaigns will have to adapt to the people we are dealing
with. Even though Volvo’s segmenting strategy is to catch a relatively broad
audience, concerned with the environment etc, these people are not the same in
China and in Europe.
To conclude, Volvo will engage with a differentiated marketing strategy to make
it more appealing and personal for the specific audience, while targeting a very
broad audience. By doing several different campaigns we are ready to rake the
risk to make it confusing for the consumer, however as it is in different market,
this risk is very low.
Product perception from the consumer point of view
By quality / Values: Some firms will position products based on relative
high quality, or based on the claim that they represent significant value.
By choosing a quality/ value product positioning, we want to show our
customers that their money is worth it. By matching a high quality car with
environmental as well as safety values we emphasis on our target audience’s
needs and desires.
By user: This positioning approach highlights the user (the ideal or
representative target consumer) and suggests that the product is the ideal
solution for that type of person and may even contribute to their social
We also want to create a personalized identity of the brand. By focusing on
our targeted user and their values as well as their beliefs, we set ourselves as
the best option and solution. Using different marketing strategy, we will set
the perfect environment, representing the ideal consumer with our product.
We want our consumers to be able to identify themselves as ethical,
environmental friendly and responsible drivers. The brand contributes to
their self-identity as well as the achievement of their beliefs.
Because every company in any industry uses advertising to promote their
product we decided to come up with this following advertising strategy.
Mobile Apps – Volvo has their own mobile apps and they are divided in
three categories: Product Apps, Owner’s App, Campaign App.
Videos – They have commercials on Television (mainly channels for
automobiles) but not only. The video commercials can also be found on
Billboards -are being used as a way of advertising almost in every
country where they are selling their products.
Volvo Spirit Magazine –Spirit magazine is Volvo Construction
Equipement’s company magazine, full of Volvo news and business
updates. It is intended for every Volvo enthusiast.
Volvo Driver Magazine– magazine for Volvo members, which contains
information about Club meetings and events, technical information and
advice, topics of general interest, all the latest Volvo news, and articles by
Members, and a Sales & Wants section.It is being distributed once a year,
only to Volvo members.
Many other magazines – Volvo is advertising in variety of different
magazines, especially in the ones specialized for automobiles, such as Top
Gear, AutoCar, AutoExpress and so on.
For our PR strategy we have decided to get into media through:
• A press release on our website
• A press conference
= On our press release and the conference we will emphasize our new ecological
and safety direction and will also announce our plans for moving into the new
developing markets. Further, we will organize and sponsor events about
ecology. There we will introduce our research and innovation towards more
Interactive Website: Since the consumers are very connected with the internet,
this is a good opportunity for VOLVO to create a direct channel with the
customers. With an interactive website, VOLVO will provide a service, where
possible customers will have the possibility to make question and receive
answers in real time. This service will help the customers to create a better idea
about the products that VOLVO supplies.
Target Online Ads: Social networks and internet have become very popular in
the last years. This trend can be used by VOLVO to advertise its products as
much as possible. Being in a constant contact with the VOLVO ads, will make the
consumers more aware of the products that VOLVO produces.
Catalogue Distribution: The printed media is also a good marketing tool that
VOLVO might use. They can give free catalogues to possible consumers, so that
they can become more familiar with the products. Consumers can see all the
products and they can get detailed information on the products they are looking
In order to maximize sales, Volvo Company considers the car warranty that will
cover for any mechanical or electrical repairs needed on the car or parts of it.
Tactical promotion warranty’s strategies can be adopted by manufacturers to
maximize sales in peak trading periods, for example seasonal offers or new
product launches. At the same time, company should consider offering new
extended packages, which will last longer and covers fixing more damages than
other car manufacturing companies do.
As Volvo has a skilled and highly effective staff service, we want to take
advantage of this characteristic. The in store experience of Volvo should be
perfect. Our sales teams have been train to engage the customers and persuade
them that Volvo is the safest and most environmentally friendly car they can get
on the market. Personal selling is our way to create a relationship with our
customers. We want to install trust and loyalty. By providing them with
valuable information and by showing them that we care, they will more likely
come back in the future. We understand that buying a car is an investment and
for that very reason we engage with the customer through a personal as well as
We will not engage through telemarketing or telephone marketing sales strategy
as we want Volvo to be seen still seen as a “luxurious” with a responsible and
respectable concerns of our customers.
In summary, Volvo has a high skilled staff and high quality service and because
they are selling expensive products with very high specific values, the company
= Install trust with customers, which will lea to loyalty
= Provide valuable information
= Persuasion and very effective sales methods
EMEA Marketing Blog URL: http://emeamarketing.co.uk/wordpress/what-isemea-marketing
Gray, J. Hayes, K. (n.d) “Application of Brand Management Techniques to
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VOLVO Given Case Study
Volvo Group: http://www.volvogroup.com/group/global/engb/Pages/group_home.aspx
Willan, Mo. Marketing Strategy Lectures