Introduction

The Volvo Group[1] is one of the world’s leading manufacturers of trucks, buses, construction equipment and marine and industrial engines. The Group also provides complete solutions for financing and service. The Volvo Group employs about 115,000 people, has production facilities in 18 countries and sells its products in more than 190 markets. Actual Volvo Group’s positions have been moved forward by acquisitions in primarily Asia and expansion of the distribution and service networks in for instance Eastern Europe and South America. By selling products under different brands (The Volvo Penta, The Volvo, Renault Trucks, SDLG, UD Trucks, Mack, Eicher, Prevost and Nova Bus), the Volvo Group can penetrate many different customer and market segments in mature markets as well as growth markets.

The information above shows that the Volvo Group is a company that plays a major role in the market of trucks, buses and other various types of equipment. I chose to analyze this particular company strategy for several reasons. First of all, it works on an international scale. Secondly, it has a very strong position in its market segment. Last but not least, it has a great potential for future growth.

The main purpose of the analysis below is a compilation of the strategic profile of the Volvo Group concern. This profile contains information on the current state of the company, its market position, evaluation of the internal and external factors of its work as well as the strategic vision of its future development and growth. Volvo Group concern plans to become the world leader in sustainable transport solutions[2]. This concern strive for the realization of this goal through its: creating[3] value for customers in selected segments; pioneering products and services for the transport and infrastructure industries; driving quality, safety and environmental care and working with energy, passion and respect for the individual.

The main topic of the strategic analysis will be: 1. Evaluation of the capability of Volvo Group to implement their ambitious plans, 2. Interpretation of weak and strong sides of their strategy, 3. the question whether the current conditions in the industrial market will allow the concern to achieve their desired results. Analysis of the mentioned above problems is based on the annual reports of the Volvo Group and on the academic theoretical sources.

 

                                         2.Vision and Mission

As it is stated in the Sustainability Report 2013, “The Volvo Group has a clear and compelling vision for the future: to become the world leader in sustainable transport solutions. We have always been a progressive company and we have put humans and their needs first since our earliest days.” [4]

For the Volvo Group, sustainable transport solutions improve economic and environmental performance in both the short- and long term, while considering the social impact at all times. Volvo Group achieves sustainable transport solutions by delivering against all three sustainability dimensions: Environmental: energy-efficient transport solutions with very low emissions of carbon dioxide, particulate matter, nitrogen oxides and noise Economic: the right product or service in order to contribute to high productivity in the transport system Social: safe and secure transport systems for people and goods.  

The Volvo Group[5] views its corporate culture as a unique asset, since it is difficult for competitors to copy. To the core values of Volvo are: quality, safety and environmental care. These values form the Volvo Group’s common base and are important components of Volvo Group’s corporate culture. The corporate core values are an important part of Volvo Group’s commitment to corporate social responsibility.

By the year 2020, the Volvo Group concern sees its market position in the industry just like that: Volvo Group is among the most profitable in its industry; Its customers’ closest business partners; It captured profitable growth opportunities; Volvo Group is innovators of energy-efficient transport and infrastructure solutions; Volvo Group is global team of high performing people.        

After 15[6] years of active acquisition strategy and streamlining to commercial vehicles, the Volvo Group has entered a newphase, with a focus on driving organic growth and improving profitability. In the strategy for 2013 – 2015, Volvo Group has identified five focus areas: secure number 1 or 2 in profitability; strengthen customer business partnership; capture profitable growth opportunities; innovate energy-efficient transport and infrastructure solutions; build high performing global teams.

Volvo has set a larger strategic goal – to become one of the leaders in the field of trucks, buses and construction equipment by the year 2020. Achieving this goal seems feasible, however, Volvo must constantly analyze strategies of their competitors and invest large amount of money to make sure there is an efficient and environmentally friendly production base, which will allow to offer a quality product at a reasonable price as well as high sales profitability. In general, we can say that the strategy implemented by Volvo is feasible, but its implementation needs proper mobilization of all company resources.

[1] (Presentation.volvogroup.com, 2014)

[2] (THE VOLVO GROUP, SUSTAINABILITY REPORT 2013, 2014) p.9

[3] The same source p.11

[4] (VOLVO GROUP, THE VOLVO GROUP ANNUAL REPORT 2013, 2014) p.9 

[5] The same source p.11

[6] The same source p.16-17

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