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Volvo trucks case study

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Harvard Case Study
Volvo Trucks Case Study
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Volvo trucks case study

  1. 1.   Penetrating the U.S Market
  2. 2.  Best known for cars  A leading European heavy truck manufacturer  One of the top three heavy truck competitors in the world in 2000  Beginning in 1975,Volvo had been attempting to penetrate the U.S. heavy truck market.
  3. 3.  Trucks could be devided into light, medium and heavy trucks based on gross vehicle weight (GVW). • The light truck (GVW class 1-4), using gasoline engines. • Medium truck (GVW class 5-7) and heavy truck (GVW class 8, or over 15 tons), using diesel engines.  Heavy trucks were used for range of activities including highway cargo hauling, construction, refuse collection and other specialty application.  heavy truck chassis were also the core of specialty vehicles such as buses, fire engine, etc.
  4. 4. Fire engines Bus
  5. 5. Cab-over Design: Volvo FH series in Europe Conventional Design: Volvo VN Series in the United states
  6. 6. Registrations of New Trucks (Heavy Trucks in Thousands of unit) 1994 1996 1998 2000 Western Europe 135 175 207 246 North America 207 270 236 207 Japan 55 56 32 34
  7. 7. Body componen ts Diesel engines Gearboxes Axles Truck assembly Specialized body companies Leasing firms Distributors Truck operators The Heavy Truck Value System
  8. 8. Europe Asia United States
  9. 9. U.S. Heavy Truck Market Share (over 15 tons)
  10. 10. 1925 : Was founded to produce cars (Car : 1927,Truck : 1928 ) 1980 : became a conglomerate mid- 1990 : reversed and refocused on vehicles and heavy equipment 1998 : total corporate sales had reached $27 billion , cars had been the most important source of profit of Volvo 1999 : The worldwide car business was sold to ford. Volvo became a manufacturer of transport solutions for commercial use. ( Trucks, buses, construction equipment, marine and industrial power system, and aerospace engines )
  11. 11.  Volvo‘s product line • European cab-over trucks (The FH series for long-haul and FL series for construction and distribution use) • European conventional trucks (The NH series) • American conventional trucks (The VN and 770 series)  A long term Volvo objective • Was to reduce the number of components • Decreasing the number of suppliers • Reduced the costs of warehousing, purchasing and shipping
  12. 12. Volvo’s Global Operations in 2000
  13. 13. 1955 : Volvo’s presence in the U.S. (Volvo passenger car) 1970 : Volvo truck decided to become a global player. 1975 : Leading to the decision to enter the U.S. market. 1978 : Freightliner cooperate with White Motor corporation Freightliner and Volvo team up. 1981 : Volvo decided to acquire the White Motor corporation Volvo White introduced the Integral sleeper. 1988 : Volvo acquired GM’s heavy truck business. a new brand was created “WHITEGMC” 1990 – 1994 : The U.S. heavy truck market grew
  14. 14. 1995 : Volvo Truck Finance North America was formed. 1996 : Launch of the new VN series. 1997 : Introduced new lager VN (770 series) 1998 : Industry demand rebounded. U.S. market share and profitability were unsatisfactory. Management was considering ways to enable Volvo to finally break the 12% market share barrier on the way towards 20%
  15. 15. 1. Why has Volvo spread its value chain for heavy trucks around the world? How can you explain why certain activities are performed in • เพื่อสร้างความแข็งแกร่งของบริษัท • เพื่อกระจายสินค้าอย่างทั่วถึง • เพื่อให้ operation อยู่ใกล้กับ dealer เพื่อให้เข้าถึงลูกค้าได้ดียิ่งขึ้น
  16. 16. 2. Certain locations?
  17. 17. 3. Why have European-based truck manufactures become the global leaders and not American or Asian companies? • มีความเป็นผู้นา • กล้าไปลุยตลาดใหม่ • กล้า take over บริษัทต่างๆ • มีความเชี่ยวชาญด้าน technical
  18. 18. 4. Why is volvo(as well as other European companies) so committed to entering the U.S.market? • Volvo Truck decided to become a “GLOBAL PLAYER”. • Attractive opportunities offered by US Geography & Transportation business for player like Volvo. • Highest sales of 45% in 1980 compared to other regions. • Result into to a global advantage over its competitors not only in U.S. but also shows a strong position over its European competitors.
  19. 19. 5. What step has Volvo taken towards establishing itself in the United States? • Acquisition of White Motor Corporation. Why has the company had so much difficultly? • Difficult to attract enough dealers. • Traditionally the relations between manufacturers and dealers in the U.S. had been quite adversarial.
  20. 20. 6. What should Volvo do in 2000? • Entering further into global markets such as Asia & Africa • Inauguration new operational offices to strengthen its global presence • Collaboration with local business partners o Local Manufacturing o Sales and distribution • Coordinated for common brand name & product development • Developing more fuel efficient vehicles • Provide full-service leases, finance leases, contract maintenance agreements and rentals • Developing customer care centers for help in case of an emergency breakdown
  21. 21. 7. What are the implications of the Volvo Truck case for how countries should attract foreign investment? • Dealers must support to sale the product. • ไม่มีระบบผูกขาดภายในประเทศ
  22. 22. Thank you
  23. 23.  Pratya Cheevaparaboon 5620224142  Pornthida Itthisatienkul 5620224150  Kanokwan Nimngern 5620224157  Preechaya Pongpassorn 5620224177  Manimeth Phetrasuwan 5620224184