Volvo Case

What should Volvo Trucks do in 2000 with respect to the North American market?

As we have seen, the path that Volvo Truck North America has travelled during the 90’s has had its peaks and valleys. Despite of the promising start with the growth of the heavy truck market in the early 90’s, some bad conducted strategies accompanied with an unpredictable environment spoiled Volvo’s new VN series launch in 1996, ending in record losses of $240 million.

This event made Volvo replace its management board, close the Ohio plant and fire 940 people between January 1996 and mid-1997.

In 1998, industry demand rebounded although the margins were not the expected. Volvo implemented a cost reduction program in order to manage these low margins, which increased just by 2%. Trogen, CEO of Volvo Trucks reflected that same year the importance of remaining and triumphing in the North American market.

So in 2000, in my opinion, as they already think that its product quality and features are accorded to the industry standards and their performing on environmental issues is considered as world-leading, they should focus on other issues like consolidating as hard as possible their dealer network in order to distribute their brand across the whole country, and continue with their “raise the number of Volvo engines” politic, which can let them to reach profitability in three different ways and can be seen as another very good profitable option in times when the truck demand drops as we have seen in the past.

Describe Volvo’s penetration strategy in the US, and Volvo’s global strategy.

Volvo’s global Strategy

Volvo was founded in 1925 to produce cars, but in 1928 trucks were introduced as new products. During the time, Volvo started to diversify to different products as marine products and jet engines. In the 80’s, Volvo became a conglomerate, providing a lot of different services, but this strategy was reversed in the mid 90’s. Volvo’s most important source of profits had always...