Volvo Analysis

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1. Explain the decline in sales of Volvo by analyzing and discussing the developments in customer value, satisfaction and core competitive advantage offered by the brand.

One of the reasons of the decrease in sales of Volvo is the market decline itself in developed markets, combined with the economiccrisis and the low market shares of the company within an important competition.
• The market is declining in developed markets and Volvo sells principally in those markets: the USA is the country where Volvo sells the most of these cars (sales equating to 19.5 per cent of total) and the consumption has collapsed by 31 per cent because of the economic crisis.
• The economic crisis with therising cost of raw materials, energy and oil, is a threat for the company. The cost of the production is increasing.
Moreover, the cost of the life for the consumers increases too and they do more attention to choose what they are buying.
• The company is proportionally small on the automobile market, with a bitter competition. There are many competitors in international firms andVolvo has only one percent of market share.
• Volvo cars are not adapted to the new needs and expectations of customers. The customers want less and less cars for family and search more and more cars that respect the environment.

The customer value must attract and retain the customers.
The customers of Volvo in developed markets are not really retained because the sales in these countriesare downed, but for the emerging markets the situation is different: the sales of the company are growing.
The customer value is composed of perceived benefits and perceived sacrifice. For Volvo’s customers the perceived benefits are safety, the image of the brand, quality, performance and design. The perceived sacrifices are the purchase price, the taxation structures that penalize large carswith high CO2 emissions and the problem of making the right decision between many strong competitors (psychological cost).
Regarding customer satisfaction, we think that the company meets customer’s needs.
Volvo’s products have ”more is better” characteristics (Kano model): the company proposes to its customers different options and they can personalize their cars.
Now ‘the group’s brands shallincrease customer satisfaction by offering environmentally and cost-efficient products and services’.
The competitive advantage is the superior customer value. The company achieves it through differentiation from others companies by the quality of the products.
Its products are not only well designed, they are also easy to use. Volvo aims to offer superior quality, especially regarding security(but probably a car should not just be sure to acquire customers).

2. Outline and discuss the macro- and micro-environmental factors that are influencing Volvo's strategy.

Macroenvironment (PEEST analysis)

• Political/Legal
Volvo needs to link up to the political laws of the different countries, and need to bear in mind the taxes that penalize large cars with higher CO2emissions. As we had seen on the text, on the other hand (in order to motivate the people to change their style life), the governments are providing tax incentives for consumers who buy fuel-efficient hybrid and Flexi-Fuel cars. It’s an opportunity that Volvo needs to take advantage to his competitors and we will talk about on following lines.

• Economic
The global crisis had been a bigimpact on the car companies, and in spite of Volvo is a luxury company (and it’s more difficult that the customers adapt to its prices on times of crisis) this company is not the only one that are suffering the crisis causes.
In spite of this, Volvo is a company that is differentiated from the others because it brings the opportunity for his consumers to personalize their car, to make it...