Essay on Volvo Group: Global Leader in State-of-Art Buses & Bus Chassis

Introduction

Volvo Group is one of the global largest manufacturers of state-of-art buses and bus chassis. The company is focused on becoming a sustainable transport solution in different places of the world. The bus company operates in more than 140 markets encompassing Prevost and Nova brands in North America. The production sites of the company are located in Asia, Europe, and South America. The Volvo customers are supported by an international dealer and service network with over 1, 900 service workshops (Backman, & Borjesson, 2006). The Volvo buses are designed to minimize noise during transportation and also reduce the emission of Carbon dioxide and other harmful emissions. The bus corporation utilizes e-mobility solutions to address the dynamic needs of cities which are transforming to electrified public transport. The possibility of zero-emission, safety, and silent zones explores new opportunities in sustainable growth and urban development.

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Financial History

The Volvo Bus Corporation has so far had positive progress in the industry. In China, it has experienced a 36 % increase in sales, Belgium 35% increase, Russia 54% increase, and other countries it has experienced a 14% increase in its sales (Byberg, Hansen, & Basic, 2015. Volvo group had excellent sales growth in 2019. The net sales growth for the Volvo group was by 11% to SEK 432 billion, and it resulted in an increase in the operating income to SEK 47.9 billion with a margin of 11.1% (Byberg, Hansen, & Basic, 2015. During the same year, the Volvo Group also continued to have a growth in its financial strength. The flow of the operating cash was at SEK 38.3 billion, and the end of the year had a net cash position of SEK 62.6 billion in industrial functions, not including lease and pensions (Byberg, Hansen, & Basic, 2015). The increase in profits and a strong financial position has helped the group to invest in the future as well as return cash to the stakeholders.

Volvo Group Target Market

The success of the Volvo Company is based on its coherent market segmentation. Since Volvo is manufacturing its products for market segmentation, which values the safety and faster transport, Volvo position sits vehicles as leaders in safety (Backman, & Borjesson, 2006). The increasing demand for safe cars is what has contributed to the success of Volvo vehicles. Volvo's target market encompasses young professionals who prefer luxury and increasingly value their safety. The targeted young, tech-savvy luxury vehicle buyers were willing to have something different in the market from standard designs such as Audi Q5 and BMX X5. The target group comprises of the ages of 25-55 who loves luxury in safe transport from all the nations in the parts of the world where it is operating.

Critical Area of Growth

The primary critical are of growth is environmental sustainability through promoting a better experience for the customers. Volvo Group values the safety and health of its customers, and this is what has encouraged them to consider luxurious and safe vehicles in their markets. The target market comprises of young customers who like luxurious transport. The company has hence focused on the expectations of the customers (Byberg, Hansen, & Basic, 2015). The manufacturing of unique designs for its vehicles has made its brand's technology prevalent in the market. Volvo group provides new experiences to the vehicle operators by providing after service maintenance to the operators. To survive in the highly competitive automotive industry, Volvo produces state-of-art vehicles that have unique features from the competitors. The customers are guaranteed safety and luxury despite paying highly for the vehicles. The positive profit margin in the global sales of the Volvo vehicles is another critical area of growth where the company obtains its profits to secure a strong financial growth. Increasing brand awareness through advertising directly to the customers has promoted popularity in the market for both the vehicle operators and the customers.

Market Entry Strategy

Volvo group target a broad market since the narrow market experiences high competition, especially for the luxurious vehicles. Volvo promotes safety and environmental sustainability by minimizing the emission of harmful gases into the atmosphere (Backman, & Borjesson, 2006). The primary market entry strategy, therefore, is differentiation, where the company is highly innovative. The company performs proper research and innovation before introducing a product into the market. The Volvo group considers the delivery of high-quality products as another essential strategy of tapping into markets. Effective marketing and sales are also used to ensure that the market comprehends the benefits of the products they are offering through the differentiation.

Segment Analysis

The company identifies and strives to understand the needs of the consumers to establish a reliable brand name, improved market share, and broad options of sales. The psychographic market segment involves looking at the savvy lifestyle where the target is family and pre-family. The segmentation in terms of lifestyle corresponds to the values embraced by Volvo. Household and workers are also the target group, and Volvo focuses on middle and upper-class customers with better working skills. Volvo concentrates on those people living in urban areas, and they are provided with the best models so that they can realize pollution (Byberg, Hansen, & Basic, 2015). The values in segmentation analysis comprise of environmental concern, safety, and quality for all. The market segment consists of adventurous customers but an increased need for safety and comfort. Volvo has an opportunity in the present generation where technology has taken over on all business operations. The tech-savvy customers prefer luxurious vehicles with excellent features.

Recommendation for an AdWords campaign

The recommended Adword campaign should be "enjoy your comfortable, luxurious, and sustainable ride from the Volvo brand." The keywords will be Volvo workshop trade shows and exhibitions from Volvo buses, Volvo cars, Volvo construction equipment.

The KPI Metrics

Standardization is one of the KPI metrics used while manufacturing Volvo vehicles. The quality measurement for Volvo products is used to distinguish its products, and this is what has enhanced its reputation to global customers (Backman, & Borjesson, 2006). The amount of emissions by the Volvo vehicles is used to measure its impact on the environment and to understand how much it observes environmental sustainability. The revenue growth in the past five years indicates the profit margin obtained by the company from its growth. The number of vehicle sales in the global market suggests the relevance of effective market segmentation.

Conclusion

Volvo Group is one of the largest companies in the automotive industry, which has a prominent market presence. The target market for the company comprises of the young tech-savvy customers who prefer comfort and safety for their drives. The company invests highly in excellent customer experience through promoting environmental sustainability.

References

Backman, M., & Borjesson, S. (2006). Vehicles for attention creation: the case of a concept car at Volvo Cars. European Journal of Innovation Management.

Byberg, A., Hansen, J., & Basic, M. (2015). Celebrity Endorsement's Impact on Brand Image and Sales: A Case Study on Volvo Cars Sweden.