Volvo: Finding True Value in the Electric Bus Market SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Volvo: Finding True Value in the Electric Bus Market
Birgit Skarsgard, head of sustainability and public affairs at Volvo Group, has successfully taken part in the ElectriCity cooperative experiment to integrate electric buses into Sweden's market using KPMG's True Value methodology. This methodology is employed by firms to understand future earnings at risk due to internalization of externalities. As part of the pilot program, Volvo's hometown of Gothenburg, Sweden has accepted electric buses with delight. The question is: Can the company scale the program to the Chinese market where the real opportunity lies? Students are asked how Volvo can leverage the True Value methodology to enter this market.
Swot Analysis of "Volvo: Finding True Value in the Electric Bus Market" written by Andrew Hoffman includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Volvo Methodology facing as an external strategic factors. Some of the topics covered in Volvo: Finding True Value in the Electric Bus Market case study are - Strategic Management Strategies, Competitive strategy, Globalization and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Volvo: Finding True Value in the Electric Bus Market casestudy better are - – increasing commodity prices, geopolitical disruptions, technology disruption, increasing transportation and logistics costs, banking and financial system is disrupted by Bitcoin and other crypto currencies, competitive advantages are harder to sustain because of technology dispersion, challanges to central banks by blockchain based private currencies,
increasing household debt because of falling income levels, increasing energy prices, etc
Introduction to SWOT Analysis of Volvo: Finding True Value in the Electric Bus Market
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Volvo: Finding True Value in the Electric Bus Market case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Volvo Methodology, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Volvo Methodology operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Volvo: Finding True Value in the Electric Bus Market can be done for the following purposes –
1. Strategic planning using facts provided in Volvo: Finding True Value in the Electric Bus Market case study
2. Improving business portfolio management of Volvo Methodology
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Volvo Methodology
Strengths Volvo: Finding True Value in the Electric Bus Market | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Volvo Methodology in Volvo: Finding True Value in the Electric Bus Market Harvard Business Review case study are -
High brand equity
– Volvo Methodology has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Volvo Methodology to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Strategy & Execution industry
– Volvo: Finding True Value in the Electric Bus Market firm has clearly differentiated products in the market place. This has enabled Volvo Methodology to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Volvo Methodology to invest into research and development (R&D) and innovation.
Operational resilience
– The operational resilience strategy in the Volvo: Finding True Value in the Electric Bus Market Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Superior customer experience
– The customer experience strategy of Volvo Methodology in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Strong track record of project management
– Volvo Methodology is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Innovation driven organization
– Volvo Methodology is one of the most innovative firm in sector. Manager in Volvo: Finding True Value in the Electric Bus Market Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Volvo Methodology digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Volvo Methodology has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Low bargaining power of suppliers
– Suppliers of Volvo Methodology in the sector have low bargaining power. Volvo: Finding True Value in the Electric Bus Market has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Volvo Methodology to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Volvo Methodology has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Volvo Methodology has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Ability to lead change in Strategy & Execution field
– Volvo Methodology is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Volvo Methodology in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Training and development
– Volvo Methodology has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Volvo: Finding True Value in the Electric Bus Market Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Cross disciplinary teams
– Horizontal connected teams at the Volvo Methodology are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Weaknesses Volvo: Finding True Value in the Electric Bus Market | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Volvo: Finding True Value in the Electric Bus Market are -
Low market penetration in new markets
– Outside its home market of Volvo Methodology, firm in the HBR case study Volvo: Finding True Value in the Electric Bus Market needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Need for greater diversity
– Volvo Methodology has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High cash cycle compare to competitors
Volvo Methodology has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Volvo: Finding True Value in the Electric Bus Market, is just above the industry average. Volvo Methodology needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Interest costs
– Compare to the competition, Volvo Methodology has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Volvo: Finding True Value in the Electric Bus Market HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Volvo Methodology has relatively successful track record of launching new products.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Volvo Methodology supply chain. Even after few cautionary changes mentioned in the HBR case study - Volvo: Finding True Value in the Electric Bus Market, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Volvo Methodology vulnerable to further global disruptions in South East Asia.
Products dominated business model
– Even though Volvo Methodology has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Volvo: Finding True Value in the Electric Bus Market should strive to include more intangible value offerings along with its core products and services.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Volvo Methodology is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Volvo: Finding True Value in the Electric Bus Market can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Volvo: Finding True Value in the Electric Bus Market, it seems that the employees of Volvo Methodology don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
No frontier risks strategy
– After analyzing the HBR case study Volvo: Finding True Value in the Electric Bus Market, it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Opportunities Volvo: Finding True Value in the Electric Bus Market | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Volvo: Finding True Value in the Electric Bus Market are -
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Volvo Methodology can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Developing new processes and practices
– Volvo Methodology can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Learning at scale
– Online learning technologies has now opened space for Volvo Methodology to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Leveraging digital technologies
– Volvo Methodology can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Volvo Methodology to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Volvo Methodology in the consumer business. Now Volvo Methodology can target international markets with far fewer capital restrictions requirements than the existing system.
Low interest rates
– Even though inflation is raising its head in most developed economies, Volvo Methodology can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Loyalty marketing
– Volvo Methodology has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Volvo Methodology can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Volvo: Finding True Value in the Electric Bus Market, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Manufacturing automation
– Volvo Methodology can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Volvo Methodology can use these opportunities to build new business models that can help the communities that Volvo Methodology operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Volvo Methodology can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Buying journey improvements
– Volvo Methodology can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Volvo: Finding True Value in the Electric Bus Market suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Threats Volvo: Finding True Value in the Electric Bus Market External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Volvo: Finding True Value in the Electric Bus Market are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Volvo Methodology can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Volvo: Finding True Value in the Electric Bus Market .
Stagnating economy with rate increase
– Volvo Methodology can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Volvo Methodology needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Volvo Methodology business can come under increasing regulations regarding data privacy, data security, etc.
Shortening product life cycle
– it is one of the major threat that Volvo Methodology is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Volvo Methodology can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Volvo Methodology
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Volvo Methodology.
Regulatory challenges
– Volvo Methodology needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Volvo Methodology.
Environmental challenges
– Volvo Methodology needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Volvo Methodology can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Volvo Methodology in the Strategy & Execution sector and impact the bottomline of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Volvo: Finding True Value in the Electric Bus Market, Volvo Methodology may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Weighted SWOT Analysis of Volvo: Finding True Value in the Electric Bus Market Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Volvo: Finding True Value in the Electric Bus Market needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Volvo: Finding True Value in the Electric Bus Market is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Volvo: Finding True Value in the Electric Bus Market is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Volvo: Finding True Value in the Electric Bus Market is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Volvo Methodology needs to make to build a sustainable competitive advantage.
