volvo ppt 1

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B2B Case Study

Volvo’s entry in India with The ‘State Corporation Of India’

By Brotin Ganguly 12

Ekta Bawa 16 Manish Kumar Barui

18 Shubhadeep Mitra

Sridev Saha Avinab Banerjee

Company Logowww.themegallery.com

Contents

Right Strategy for Volvo to enter the Indian Market.

SWOT Analysis for a typical B2B.

What went wrong with the Indian Auto LCV manufacturers.

Is tailoring needed to enter the B2B market.

Criticalities of a B2B market in globality.

Conclusion

• State transport corporation

• Royal Cruisers- Public private

corporation

Business 2 business marketing

Buyers

• Tata’s

• Volvo

• Ashok Leylande

Sellers

PPP Model- Public private participationSharing money in State Transport Corporation.

PEST Analysis

POLITICAL

ECONOMIC

SOCIAL

TECHNOLOGY

• Government of India gave Rs 50000 crores for development of urban cities• BJP came up with National Quadritrangle• PPP Model

• Dropping mainline products- passenger car market- overcrowded in India• Huge investment: Volvo-1 crore, Tata bus- 40 lakh• Volvo generates positive cash flow, huge employment

• Increase in consumption.• Urbanization.• Increase in per capita income – affordability• Most population depending upon public transport system

• Dashboard of Volvo heavily computerized• Volvo drivers are trained- 3.3 lakh to train at Bangalore, certification required


Right strategy to enter the Indian market.


Right strategy for Volvo to enter the Indian market.

Companies expanding sales activities in emerging markets need access to deeper knowledge of local customers, support networks, distribution and advertising.

In many cases, companies choose joint ventures

with experienced players in a local market, For

example, after manufacturing and selling in

India for 10 years, Volvo formed a joint

venture with Eicher Motors, a local

commercial vehicle manufacturer India to sell

heavy vehicles and leverage its network of over

200 service centers across the country. Volvo

plans to use Eicher’s sales and service

infrastructure and manufacturing prowess to

increase its sales from 5,000 vehicles to

100,000 by 2015. With $225 million invested

so far, Volvo plans to gain a 15% market share

of heavy commercial vehicle.


Right strategy for Volvo to enter the Indian market.

As they build complete product lines and develop new products, companies require a significant level of control over strategic business activities. For example, Sweden’s Volvo group, the world’s second largest truck manufacturer, owns a subsidiary in India that builds trucks to sell in India, Myanmar, Indonesia, Vietnam and China. Volvo India has also established a product development center in Bangalore, India that employs over 200 people.

VOLVO’S STRATEGY

VOLVO trucks were differentiated on the basis of

Niche market of inter city travel

‘CLEAR DIFFERENTIATION OVER EXISTING PLAYERS’

1) Productivity

2)Transport Economy

3)Customer Education

Synopsis

Huge investments- Volvo- 1 croreRoyal Cruisers charge Rs 20 in Kolkata

MarketEmerging Economy

Industrial Selling

Commercial Aspect

Large Commercial

Vehicles.

India&

China

After Sales Service

comes up. 15 years

minimum guarantee

STC, PPP – ROT?.

Segmentation

Ansoff Matrix for Volvo- New emerging market India

Market penetration

Market development

Diversification

Product development

Existing products New Products

New

mark

ets

Exis

ting m

ark

ets

Emerging market: BRIC countries


Porters 5 Forces for VOLVO.

LOWHigh comfort level- Luxury segment is brand conscious and willing to pay a premium for great experience, service quality and safety

HighJNNURM.

MODERATE- Toyota, Hundai•Economies of scale, distribution network, equity of established players like Tata being market leader in Indian bus market

Volvo is a substitute to Shatabdi trains

Tatas, Ashok Leylande, Mercedes Benz

Cost plus strategy---production cost + variable cost + profit margin.

Target pricing strategy--- target return pricing:: to achieve target return on target achievement.

Early cost recovery ---maximum profit return from the product at the earliest.

VOLVO

Pricing strategy

12

Skimming Strategy

Priced 2-3 times above ordinary buses Volvo offers unmatched luxury for the passengers.

SWOT Analysis

STRENGTHS Generic name for luxury buses- high comfort level Largest producer of diesel engines Good quality and reliable products- fuel efficient High productivity Efficient logistics management Known for safetyWEAKNESS No manufacturing units in India. Pricing of the products is higher, compared to the competitors. Not concentrating on low segment vehicles Manpower No advertisements – India Service centre


OPPORTUNITIES Setting up manufacturing plants in India Developing the business in Indian

infrastructure Acquisition of companies Extending the service THREATS Price sensitive customers Competition- Tata with 62% market share

in bus market Future Competitors- Toyota, Hundai


What went wrong with the Indian Auto LCV manufacturers

The pinch of competition from the new Japanese collaborated LCV manufacturers was being felt- Thus Standard Motors Products of India Ltd (SMPIL) realised the need to modernise and update its existing range of vehicles

Need to redesign the LCV to rival the Indo-Japanese models in style, comfort and ergonomics. It also had to appeal to the driver. Hence it was necessary- to provide some amount of protection to the driver and other occupants - and, at the same time, as space-efficient as possible.

Seeing the success of the Maruti van, considerable scope for a vehicle that would be a people-carrier, that would find a slot between a large family-car and a light commercial vehicle, with a variety of applications between the categories.

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Tailoring by Volvo

Ruggedness of the vehicle

Quality Comfort

SafetyTechnology

These vehicles far exceed customer expectations. These features greatly reduce driver fatigue, breakdowns and routine maintenance, thereby enabling far higher utilization levels than other CVs.

cabin comfort (ergonomics, visibility) fit and finish, painting and aesthetics.

Engine capacity and performance

Safety features are far beyond what the Indian market was exposed to earlier

Complex Decision Making Unit (DMU)

B2B buyers are more Rational

B2B products are more complex

Limited number of buying units in B2B market

B2B markets have fewer Behavioural and Needs-Based Segments

Personal relationships are moreimportant in B2B markets

B2B buyers are long term buyers

B2B Markets Drive Innovation less Than Consumer Markets

B2B buyers are more Demanding

Brands seldom become popular at the ultimate consumer level In B2B

Criticalities of a B2B market

Conclusion- Factors for success

1

2

3

Volvo’s slow and steady growth in India has been due to a combination of factors.

This has been backed up by a service and parts strategy that has grown in tandem with its sales growth and coverage.

Since the time Volvo entered India, the fuel costs have escalated steeply. This has favoured these fuel efficient products in offering greater opportunities in improving the transport economy.

A clear strategy that was meticulously executed, focus on customer training and education, a range of top of the line HCVs that aim at offering customers greater productivity levels and transport economy.

4 The Indian government’s focus on highways development can help make prospects even better.

volvo ppt 1

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