Professional Documents
Culture Documents
7/2/16
Teamed up with
Freightliner for
distribution
1975
1955
1979
1978
Volvo Truck
entered the US
market using
existing car
dealership
Volvo White
market share at 89%
1988
1983
1980
Volvo introduced
the slash on
Volvo White truck
fronts
Freightliner
acquired by
Daimler-Benz
Volvo invested
$500 Mn for the
launch of the VN
series
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Lower
maximum
allowed
weights
Conventional
Unsynchronis
truck
ed gearboxes
preferred
1997
1987
1995
2000
Introduced a new
VN model, the 770
Volvo acquired
GMs heavy truck
business
European
American
Length of
tractor not
included in
truck length
Volvo aims to
break the 12%
market share
barrier
Length of
tractor
included in
truck length
Higher
maximum
allowed
weights
Synchronised
gearboxes
Cab over
trucks
preferred
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Cultural Distance
Administrative Distance
Geographic Distance
Economic Distance
Low
Industry Rivalry
+ +
High concentration of
competitors
High switching costs and
exit barriers
Cyclical nature of heavy
truck industry in the US
High
++
Bargaining power of
Buyers
Volume purchased by a
single buyer is high
High switching cost
Low ability to backward
integrate
Ideal substitute products
not available
High product
differentiation of
suppliers
Low
+
-
++
+
+
- - -
Threat of substitutes
Low
- +
Technolo
gy
Factors
Industryglobalization: Yipsdrivers
Market
Market drivers
drivers
Cost drivers
Low GDP of majority
country
Low per capita income
of developing and under
developed nations
Cost depends on
economies of scale
which depend on market
size
Economi
c Factors
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Non-uniform
Non-uniform customer
customer
demands
demands
Preference
Preference to
to local
local
brands
brands
Distribution
Distribution system
system
varies
varies form
form country
country to
to
country
country
Growth
Growth rate
rate varies
varies form
form
country
country to
to country
country
Globalization
Globalization
Strategy
Strategy
Competitive
Competitive drivers
drivers
Players
Players focusing
focusing on
on
consolidation
consolidation
Import
Import and
and export
export of
of
components
components are
are low
low
Less
Less no.
no. of
of players
players looking
looking
to
to globalize
globalize
Competition
Competition is
is less
less
interdependent
interdependent
Social
Factors
Government
Government
drivers
drivers
Difference
Difference in
in technical
technical
specifications
specifications
Legal
Legal barriers
barriers to
to entry
entry
Tariffs
Tariffs and
and duties
duties for
for
import
import
Local
Local labor
labor regulations
regulations
Political
Factors
5
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Forward Integration
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GM Heavy Truck
Corporation
change
Acquired by Volvo in 1988; Volvo dropped its highest
volume model
Consolidated the dealer network in areas of overlap of GM
and WMC
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was most critical period? Should Volvo have exited US then? Why or wh
1996
15% DECLINE IN INDUSTRY
VOLUME
1981
DEREGULATION OF US
TRUCKING INDUSTRY
SITUATION:
REASONS OF WHETHER
TO EXIT OR NOT:
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Operating Margin
Navistar
Paccar
Scania
Daimler Chrysler
Renault V.I.
Volvo
Market share
Freightliner
Paccar
Navistar
Mack (RVI)
Volvo
Ford
GM
Others
10
Recommended Solutions
Volvo should move
towards adopting
transnational
strategy which
Daimler-Benz has
successfully adopted
Transnatio
nal
Low
Cost Reduction
Pressure
Hig
h
Global
International
Low
Multidomesti
c
Hig
h
Local
Responsiveness
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11
Thank You
7/2/16
12