Homework Help is Here – Start Your Trial Now!
Business
Operations Management
1 Rank the elements of Passey's strategy for Volvo in order of importance. Could any have been dispensed with? 2 How sustainable is Volvo's luxury bus strategy?

1 Rank the elements of Passey's strategy for Volvo in order of importance. Could any have been dispensed with? 2 How sustainable is Volvo's luxury bus strategy?

Purchasing and Supply Chain Management
Purchasing and Supply Chain Management
6th Edition
ISBN:9781285869681
Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
ChapterC: Cases
Section: Chapter Questions
Problem 5.1SA
See similar textbooks
icon
Related questions
Question
100%

Please help me with the 2 questions of this case study. Very simple answer needed. No word limitations.

Thank you

Illustration 7.2 Volvo's different Indian buses Volvo has a strategy to sell buses at nearly four times the prevailing market price. The Indian bus market has long been dominated by two subsidiaries of major Indian conglomerates: Tata Motors and Ashok Leyland. They made simple coaches on a design that had hardly changed for decades. On top of a basic truck chassis, the two companies bolted a rudimentary coach body. Engines were a meagre 110–120 horse-power and roared heartily as they hauled their loads up the steep roads. Mounted at the front, the heat from the over-strained with the new Volvo services. Speedier, more comfortable engines would pervade the whole bus. Air conditioning was journeys allowed them to arrive fresh for meetings and poten- a matter of open windows, through which the dust and tially to save the costs of overnight stays. Tata and Ashok noise of the Indian roads would pour. Suspension was Leyland both now produce their own luxury buses, with old-fashioned, guaranteeing a shaky ride on pot-holed Mercedes and Isuzu following Volvo into the market. None- roads. Bags were typically slung on the top of the bus, where theless, the phrase 'taking a Volvo' has become synonymous they were easily soiled and at high risk of theft. But at least with choosing a luxury bus service in India, rather as 'hoover the buses were cheap, selling to local bus companies at came to refer to any kind of vacuum cleaner. around Rs 1.2m (€15,000; $21,000). In 1997, Swedish bus company Volvo entered, with buses lore 2008 and after further investments in 2012 it doubled priced at Rs 4m, nearly four times as much as local prod- the annual capacity to 1,500 buses per year. As Volvo's most ucts. Akash Passey, Volvo's first Indian employee, commis- efficient bus factory worldwide it has started to export sioned a consultancy company to evaluate prospects. The consultancy company recommended that Volvo should not strategy and became the first bus company in India to even try. Passey told the Financial Times: 'My response was manufacture and sell hybrid buses running on an electric simple - I took the report and went to the nearest dustbin motor and battery as well as diesel. Kamal Bali, President and threw it in.' Passey entered the market in 2001 with the and Managing Director, Volvo Group India says they are very high-priced luxury buses. Passey used the time to develop a distinctive strategy. of automation and connected vehicles are the future plans His product had superior features. Volvo's standard engines that we have for India.' were 240-250 hp and mounted at the back, ensuring a faster Source: Adapted from J. Leahy, "Volvo takes a lead in India', Financial and quieter ride. Air conditioning was standard of course. The positioning of the engine and the specific bus design of Mathur, Auto.economictimes.indiatimes.com, 19 May 2017. the chassis meant a roomier interior, plus storage for bags internally. But Passey realised this would not be enough. He commented to the Financial Times: "You had to do a lot of Questions things to break the way business is done normally. Volvo offered post-sale maintenance services, increasing life expectancy of buses from three to ten years, and allowing bus operating companies to dispense with their own expensive maintenance workshops. Free training was given to drivers, so they drove more safely and took more care of their buses. The company advertised the benefits of the buses direct to customers in cinemas, rather than simply promoting them to the bus operators. Faster, smoother and more reliable travel allowed the bus operators to increase their ticket prices for the Volvo buses by 35 per cent. Business people and the middle classes were delighted A new state-of-the-art bus factory was opened in Banga- buses to Europe. In 2016 Volvo continued its distinctive bullish on India: "We are bringing in hybrid buses now. A lot Times, 31 August 2009; M. Lalatendu, The Hindu, 15 February 2016; S. 1 Rank the elements of Passey's strategy for Volvo in order of importance. Could any have been dispensed with? 2 How sustainable is Volvo's luxury bus strategy?
Transcribed Image Text:Illustration 7.2 Volvo's different Indian buses Volvo has a strategy to sell buses at nearly four times the prevailing market price. The Indian bus market has long been dominated by two subsidiaries of major Indian conglomerates: Tata Motors and Ashok Leyland. They made simple coaches on a design that had hardly changed for decades. On top of a basic truck chassis, the two companies bolted a rudimentary coach body. Engines were a meagre 110–120 horse-power and roared heartily as they hauled their loads up the steep roads. Mounted at the front, the heat from the over-strained with the new Volvo services. Speedier, more comfortable engines would pervade the whole bus. Air conditioning was journeys allowed them to arrive fresh for meetings and poten- a matter of open windows, through which the dust and tially to save the costs of overnight stays. Tata and Ashok noise of the Indian roads would pour. Suspension was Leyland both now produce their own luxury buses, with old-fashioned, guaranteeing a shaky ride on pot-holed Mercedes and Isuzu following Volvo into the market. None- roads. Bags were typically slung on the top of the bus, where theless, the phrase 'taking a Volvo' has become synonymous they were easily soiled and at high risk of theft. But at least with choosing a luxury bus service in India, rather as 'hoover the buses were cheap, selling to local bus companies at came to refer to any kind of vacuum cleaner. around Rs 1.2m (€15,000; $21,000). In 1997, Swedish bus company Volvo entered, with buses lore 2008 and after further investments in 2012 it doubled priced at Rs 4m, nearly four times as much as local prod- the annual capacity to 1,500 buses per year. As Volvo's most ucts. Akash Passey, Volvo's first Indian employee, commis- efficient bus factory worldwide it has started to export sioned a consultancy company to evaluate prospects. The consultancy company recommended that Volvo should not strategy and became the first bus company in India to even try. Passey told the Financial Times: 'My response was manufacture and sell hybrid buses running on an electric simple - I took the report and went to the nearest dustbin motor and battery as well as diesel. Kamal Bali, President and threw it in.' Passey entered the market in 2001 with the and Managing Director, Volvo Group India says they are very high-priced luxury buses. Passey used the time to develop a distinctive strategy. of automation and connected vehicles are the future plans His product had superior features. Volvo's standard engines that we have for India.' were 240-250 hp and mounted at the back, ensuring a faster Source: Adapted from J. Leahy, "Volvo takes a lead in India', Financial and quieter ride. Air conditioning was standard of course. The positioning of the engine and the specific bus design of Mathur, Auto.economictimes.indiatimes.com, 19 May 2017. the chassis meant a roomier interior, plus storage for bags internally. But Passey realised this would not be enough. He commented to the Financial Times: "You had to do a lot of Questions things to break the way business is done normally. Volvo offered post-sale maintenance services, increasing life expectancy of buses from three to ten years, and allowing bus operating companies to dispense with their own expensive maintenance workshops. Free training was given to drivers, so they drove more safely and took more care of their buses. The company advertised the benefits of the buses direct to customers in cinemas, rather than simply promoting them to the bus operators. Faster, smoother and more reliable travel allowed the bus operators to increase their ticket prices for the Volvo buses by 35 per cent. Business people and the middle classes were delighted A new state-of-the-art bus factory was opened in Banga- buses to Europe. In 2016 Volvo continued its distinctive bullish on India: "We are bringing in hybrid buses now. A lot Times, 31 August 2009; M. Lalatendu, The Hindu, 15 February 2016; S. 1 Rank the elements of Passey's strategy for Volvo in order of importance. Could any have been dispensed with? 2 How sustainable is Volvo's luxury bus strategy?
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Theories of Motivation
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, operations-management and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Purchasing and Supply Chain Management
Purchasing and Supply Chain Management
Operations Management
ISBN:
9781285869681
Author:
Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:
Cengage Learning
SEE MORE TEXTBOOKS