B2B Case Study

Volvos entry in India with The State Corporation Of India

By Brotin Ganguly 12 Ekta Bawa 16 Manish Kumar Barui 18 Shubhadeep Mitra Sridev Saha Avinab Banerjee

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Contents
Right Strategy for Volvo to enter the Indian Market.

SWOT Analysis for a typical B2B.

What went wrong with the Indian Auto LCV manufacturers.

Is tailoring needed to enter the B2B market.

Criticalities of a B2B market in globality.

Conclusion
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Business 2 business marketing

PPP Model- Public private participation Sharing money in State Transport Corporation.

State transport corporation

Buyers

Royal Cruisers- Public private corporation

Tatas

Sellers

Volvo Ashok Leylande

PEST Analysis
Government of India gave Rs 50000 crores for development of urban cities BJP came up with National Quadritrangle PPP Model Dropping mainline products- passenger car market- overcrowded in India Huge investment: Volvo-1 crore, Tata bus- 40 lakh Volvo generates positive cash flow, huge employment Increase in consumption. Urbanization. Increase in per capita income affordability Most population depending upon public transport system

POLITICAL

ECONOMIC

SOCIAL

Dashboard of Volvo heavily computerized TECHNOLOGY Volvo drivers are trained- 3.3 lakh to train at Bangalore, certification required

Right strategy to enter the Indian market.

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Right strategy for Volvo to enter the Indian market.

Companies expanding sales activities in emerging markets need access to deeper knowledge of local customers, support networks, distribution and advertising.

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Right strategy for Volvo to enter the Indian market.

As they build complete product lines and develop new products, companies require a significant level of control over strategic business activities. For example, Swedens Volvo group, the worlds second largest truck manufacturer, owns a subsidiary in India that builds trucks to sell in India, Myanmar, Indonesia, Vietnam and China. Volvo India has also established a product development center in Bangalore, India that employs over 200 people. www.themegallery.com

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VOLVOS STRATEGY
Niche market of inter city travel

CLEAR DIFFERENTIATION OVER EXISTING PLAYERS

VOLVO trucks were differentiated on the basis of

1) Productivity 2)Transport Economy 3)Customer Education

Synopsis
Industrial Selling

Market Segmentation

Emerging Economy

Commercial Aspect

Large Commercial Vehicles.

India & China

After Sales Service comes up. 15 years minimum guarantee

STC, PPP ROT?.

Huge investments- Volvo- 1 crore Royal Cruisers charge Rs 20 in Kolkata

Ansoff Matrix for Volvo- New emerging market India

Existing products New Products

Existing markets

Market penetration

Product development

New markets

Market development

Diversification

Emerging market: BRIC countries

Porters 5 Forces for VOLVO.

LOW High comfort levelLuxury segment is brand conscious and willing to pay a premium for great experience, service quality and safety MODERATE- Toyota, Hundai Economies of scale, distribution network, equity of established players like Tata being market leader in Indian bus market

High JNNURM.
Tatas, Ashok Leylande, Mercedes Benz

Volvo is a substitute to Shatabdi trains

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Pricing strategy
Cost plus strategy---production cost + variable cost + profit margin. Target pricing strategy--- target return pricing:: to achieve target return on target achievement. Early cost recovery ---maximum profit return from the product at the earliest. VOLVO Skimming Strategy

Priced 2-3 times above ordinary buses Volvo offers unmatched luxury for the passengers.
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SWOT Analysis

SWOT Analysis for a typical B2B. STRENGTHS Generic name for luxury buses- high comfort level Largest producer of diesel engines Good quality and reliable products- fuel efficient High productivity Efficient logistics management Known for safety WEAKNESS No manufacturing units in India. Pricing of the products is higher, compared to the competitors. Not concentrating on low segment vehicles Manpower No advertisements India Service centre

SWOT Analysis for a typical B2B.

OPPORTUNITIES Setting up manufacturing plants in India Developing the business in Indian infrastructure Acquisition of companies Extending the service THREATS Price sensitive customers Competition- Tata with 62% market share in bus market Future Competitors- Toyota, Hundai

What went wrong with the Indian Auto LCV manufacturers The pinch of competition from the new Japanese collaborated LCV manufacturers was being feltThus Standard Motors Products of India Ltd (SMPIL) realised the need to modernise and update its existing range of vehicles
Need to redesign the LCV to rival the Indo-Japanese models in style, comfort and ergonomics. It also had to appeal to the driver. Hence it was necessary- to provide some amount of protection to the driver and other occupants - and, at the same time, as space-efficient as possible. Seeing the success of the Maruti van, considerable scope for a vehicle that would be a people-carrier, that would find a slot between a large family-car and a light commercial vehicle, with a variety of applications between the categories.

Tailoring by Volvo

Ruggedness of the vehicle

Quality Technology Engine capacity and performance Comfort Safety

cabin comfort (ergonomics, visibility) fit and finish, painting and aesthetics.

Safety features are far beyond what the Indian market was exposed to earlier

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These vehicles far exceed customer expectations. These features greatly reduce driver fatigue, breakdowns and routine maintenance, thereby enabling far higher utilization levels than other CVs.

Criticalities of a B2B market

Complex Decision Making Unit (DMU) B2B buyers are more Rational

Personal relationships are more important in B2B markets B2B buyers are long term buyers

B2B products are more complex Limited number of buying units in B2B market B2B markets have fewer Behavioural and Needs-Based Segments

B2B Markets Drive Innovation less Than Consumer Markets

B2B buyers are more Demanding Brands seldom become popular at the ultimate consumer level In B2B

Conclusion- Factors for success

Volvos slow and steady growth in India has been due to a combination of factors.

A clear strategy that was meticulously executed, focus on customer training and education, a range of top of the line HCVs that aim at offering customers greater productivity levels and transport economy.

This has been backed up by a service and parts strategy that has grown in tandem with its sales growth and coverage.
Since the time Volvo entered India, the fuel costs have escalated steeply. This has favoured these fuel efficient products in offering greater opportunities in improving the transport economy. The Indian governments focus on highways development can help make prospects even better.

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