FACULTY OF BUSINESS AND MANAGEMENT

BACHELOR OF BUSINESS ADMINISTRATION (HONS)INTERNATIONAL

BUSINESS

IBM641
GLOBAL BUSINESS STRATEGY

GROUP ASSIGNMENT
VOLVO GROUP REPORT

CLASS: BA246 5B

PREPARED BY:
NO. MEMBERS NAME MATRIX NO.

1. SYASYA FARISYA BINTI SUFFA 2021843572

2. NUR ERINA ILLYANA BINTI ABDUL FATTAH 2021809128

3. DHANIYAH SYAFIQAH BINTI KHAIRUL NIZAM 2021853048

4. NIK DIANA FAQIERA BINTI NIK JAMILI 2021478628

5. MUHAMMAD HAZIM BIN MD DARUS 2021470656

PREPARED FOR:

MADAM KHALILAH BINTI IBRAHIM

CLASS: BA246 5B

DATE OF SUBMISSION: 14TH JULY 2023

TABLE OF CONTENT

1.0 INTRODUCTION .................................................................................................................... 2

2.0 BACKGROUND OF VOLVO................................................................................................. 3
3.0 EVALUATION OF THE COMPANY ................................................................................... 5
4.0 CONCLUSION ....................................................................................................................... 15
5.0 REFERENCES ....................................................................................................................... 19

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1.0 INTRODUCTION

The domains of robotics technology and artificial intelligence (AI), which are closely tied to
one another, have both seen significant developments in recent years. Robotics is the study of the
design, construction, operation, and use of robots. In contrast, artificial intelligence (AI) refers to the
process of creating intelligent machines that are able to carry out activities that would ordinarily need
the of a human being. Significant advances in various fields have been made possible as a result of the
combination of AI and robots, especially in the automotive industry. Apart from that, the objectives of
this research are to assess the relationship between Robotics Technology and Artificial Intelligence
(AI) and company development. The Volvo Group needs to have a sustainable competitive advantage
for them to compete with other competitors in the automotive industry. The development of a
corporation can benefit from robotics technology and artificial intelligence. They should consider
factors such as the specific needs of their industry, the compatibility with existing systems, workforce
training, and the potential impact on employees. Robotics technology and artificial intelligence can
contribute to a company’s growth by increasing efficiency, innovation, and competitiveness when
properly implemented and continuously optimized. Overall, these combinations have a lot of potential
to transform industries, boost productivity, promote sustainability, and improve our quality of life. In
the coming years, new ideas and improvements are likely to come from more study and development
in these fields.

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2.0 BACKGROUND OF VOLVO

According to Companies History (2021), Volvo automobiles got their start in the early half of
the 20th century. With more than 200 vehicles, the group created a series of automobiles in Gothenburg,
Sweden. The organization is a worldwide corporation that manufactures, distributes, and sells trucks,
bases, and other construction tools for both land and sea projects. A lot of people all around the world
became aware of the company because of the first truck it created during its first year of business.
Having been in business for only around three years, the company accomplished its goal of selling
approximately 600 cars. The business later started exporting trucks to Europe. Since its name first
appeared on the airwaves following World War II, the corporation, however, was not well known. The
company's priority moved to supply the armed forces during this time, which led to an expansion of its
operations while production fell. 10,000 automobiles were produced in 1932, marking the company's
first manufacturing milestone, and consequently, demand to create more vehicles mounted (Volvo
Owners Club Limited, 2021).

The business needed to purchase Pentaverken as its combustion engine supplier in 1935 in
order to secure a steady supply of engines and to successfully join the marine engine sector (Companies
History, 2021). After launching its first bus in 1934, the business later chose to add air engines
(Companies History, 2021). This signaled the early half of that century's growth into the manufacture
of a broad range of goods. In 1963, the business established its first production factory headquartered
outside of Sweden (Companies History, 2021). Due to the PV444's dominance of the industry during
the 1960s, the firm entered the US market with this vehicle (Volvo Owners Club Limited, 2021). Volvo
Group sold its automotive sector to Ford Motor Company at the start of the twenty-first century,
therefore as the outcome, it was positioned on par with other respected brands like Jaguar (Companies
History, 2021). Afterward, Ford's numerous products utilized the company's engineering resources and
components. Then, in 2010, a Chinese automaker purchased Volvo Car Corporation.

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2.1 Problem Statement

The difficulty for Volvo, a well-known participant in the automotive sector, is to maintain its
market share and stay competitive. The business wants to understand its alternatives and needs
to assess where it stands in the market.

2.2 Objectives of Volvo

● Safety
In the automotive sector, Volvo has a long history of developing safety innovations. To prevent
accidents and safeguard passengers and pedestrians, their goal may involve carrying out
ongoing development and the integration of innovative safety systems into their cars.

● Sustainability
A lot of automakers are putting an emphasis on sustainability in response to growing concerns
about the effects of global warming and environmental damage. Volvo might want to reduce
carbon emissions, improve fuel economy, and switch to electric or hybrid vehicles.

● Innovation and Technology

Automotive businesses frequently work to stay on the cutting edge of technical development.
Volvo may seek to create and integrate cutting-edge technologies like automated driving,
connected automobiles, and sophisticated multimedia entertainment systems into its vehicles.

● Customer Satisfaction
For any business, exceeding customer expectations and maintaining high levels of customer
satisfaction are essential goals. In order to foster brand loyalty and engage potential customers,
Volvo may concentrate on providing high-quality goods, first-rate services, and enjoyable
experiences for consumers.

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3.0 EVALUATION OF THE COMPANY

a) Identify the competitor.

Being a successful company, Volvo undoubtedly faces tough competition in the automotive
sector. BMW is one of Volvo's rivals in the marketplace. The German automaker BMW, or Bayerische
Motoren Werke in full, is one of the most well-known brands in the world and is known for its high-
quality sports sedan and motorcycles. BMW has its headquarters in Munich, Germany, and has
manufacturing facilities in Brazil, China, India, Mexico, the Netherlands, South Africa, the United
Kingdom, and the United States. Camillo Castiglioni, Franz Josef Popp, and Karl Rapp established the
company in 1916. With 2,279,503 vehicles manufactured in 2017, BMW ranked as the fourteenth-
largest automaker in the world. The business has a long history in motorsport, particularly in touring
vehicles and sports cars. In addition to owning MINI vehicles, BMW also is the parent company of
Rolls-Royce Motor Cars. Each BMW model delivers outstanding levels of comfort and driving
enjoyment, and the company is known for producing premium automobiles and SUVs.

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` b. Value Chain Comparison between Volvo and BMW

VOLVO Primary Activity BMW

Volvo emphasizes safety, practicality, and BMW's design is athletic and luxurious. The brand's
Scandinavian design. The brand's products mix clean products emphasize performance, elegance, and
lines, simple aesthetics, and utility. Volvo cars have athleticism. BMWs have aerodynamic lines, unique
clean, contemporary designs with ergonomic interiors, grilles, and classic proportions. Driver-centric layouts,
user-friendly interfaces, and enhanced safety systems. high-quality materials, and modern infotainment
Structural integrity, active safety systems, and driver- Product Design systems define the interiors. BMW's design philosophy
assistance technology show the brand's dedication to balances elegance and sportiness to offer a visually
safety innovation. Volvo cars use eco-friendly materials attractive and compelling driving experience
and technology. throughout its lineup.

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Volvo is known for its focus on safety, practicality, and BMW is renowned for its emphasis on performance,
environmental sustainability. Volvo also has a luxury, and driving experience. The company has a
significant presence in China, where it operates robust market presence worldwide, with a strong
manufacturing facilities and caters to the growing foothold in its home market, Germany. BMW has a
demand for luxury vehicles. The brand is often well-established presence in key markets such as the
associated with family-oriented vehicles, safety Operations United States, China, and other major economies. It has
innovations, and a commitment to sustainability. Volvo a diverse product lineup that ranges from luxury sedans
is also using UV eye to enhance the efficiency and to high-performance sports cars and SUVs. BMW is
effectiveness of vehicle inspections, whether it's for pre- recognized for its dynamic driving capabilities,
purchase inspections, fleet management, security innovative technologies, and premium brand image.
purposes, or regular maintenance. The company has a wide network of dealerships and
service centers globally to support its customer base.

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Every company has distinct marketing strategies and BMW integrates AI and robotics into its marketing
approaches, reflecting their brand identities and target activities. From the brand positioning, BMW focuses
markets. From the brand positioning, Volvo often on performance, luxury, and driving experience. Their
emphasizes safety, reliability, and practicality. Besides marketing Advertising and Communication, BMW
that, Advertising and Communication. Volvo's marketing, on the other hand, focus on the thrill of
advertising may focus on emphasizing safety Marketing driving, advanced technologies, and the aspirational
innovations and the practical benefits of their vehicles aspects of owning a luxury vehicle.

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Volvo employs AI and robotic technologies in the The use of robotics and AI has been integrated by
domain of outbound logistics. From the part of BMW into its outbound logistics operations. From the
transportation methods, Volvo might rely on a part of transportation methods, BMW may have a more
combination of shipping and road transportation. diverse approach, including rail and air transportation.
Besides that, Technology Integration. Volvo might have Outbound Logistics From the technology integration, BMW may focus on
more extensive use of AI and robotics in route other areas such as inventory management and supplier
optimization and warehouse automation. collaboration.

Volvo has their own services that they provide to their BMW provides its own service. By the sight of
customers. From the part of its offering, Volvo focuses offering, BMW emphasizes performance-oriented
on safety-related services (built to protect and save services. Besides that, digital services BMW's offerings
Service
lives). For the digital services Volvo's digital services might include personalized concierge services and
might focus on connectivity and in-car features remote vehicle control through mobile apps.

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 c. Company’s competency using AI.

Artificial intelligence (AI) is being used by Volvo in their automobiles' safety technologies. In
order to develop better software that will make the car safer over time, Volvo has revealed that its
recently released Ex90 all-electric SUV would be fitted with a system that employs artificial
intelligence to evaluate data from actual accidents. In order to give drivers more security, Volvo
unveiled OnePilot, their AI-powered software. OnePilot is a software program created by Zenseact. In
order to enhance vehicle safety, OnePilot will study human behavior. The technique that trains the
software to anticipate and avoid complicated traffic scenarios, much like people would, is framed by
the predictive safety principle, a set of danger assessment, decision-making, and verification practices
that improve traffic safety. The technology will archive data from actual incidents captured by the cars'
sensors, which will serve as the foundation for machine learning and upcoming updates. In this
approach, as the software is continuously improved, the vehicles will get safer over time. This OnePilot
system assists in the creation of an unseen screen of safety for drivers. Volvo also employs AI for
automated inspection. This company makes use of the UV eye inspection platform. This business makes
use of the UV eye inspection platform. An artificial intelligence (AI) machine learning system that can
quickly check the entire car for issues. The automated system uses high-speed cameras, machine
learning, and AI to quickly identify issues. This AI system makes inspections much quicker than labor-
intensive manual inspections. Aside from saving time, an automated system can also assist in problem
resolution. It displays the vehicle's current state. As a result, buyers will be able to spot problems they
were previously unaware of.

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 d. VRIO Table

Resources Value Rare Imitation Organization Competitive

Advantage

Yes, it is valuable Most of the Can be imitated by The firm has used it to Provide short-term
Product Portfolio and in the industry competitors are the competitors good effect, details can competitive advantage
Synergy among given the various trying to enter be found in the case but requires constant
Various Product Lines segmentations & the lucrative exhibit innovation to sustain
of Volvo consumers’ segments
preferences.

Yes, Volvo has Pricing strategies are Yes, firm has a pricing It can only provide
Pricing Strategies of sound pricing regularly imitated in analytics engine Volvo with a
No
Volvo strategies the industry Temporary
Competitive
Advantage

Near competitors also Fully utilized by Volvo

Supply Chain Network have flexible supply organizational structure
Yes Yes Keeps the business
Flexibility of Volvo chain and share some and capabilities
running
of the supplier’s

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 Vision of the Can't be imitated by Not based on Can Lead to Strong
Leadership for Next Yes No competitors of Volvo information provided in Competitive
Set of Challenges the case Advantage

Alignment of Each of the firms has Yes, the company has Still, lots of potential
Activities with Volvo Yes No its own strategy organizational skills to to build on it
Corporate Strategy extract the maximum
out of it.

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 Even if Volvo has every important resource that is both uncommon and difficult to duplicate,
it won't always translate into a long-lasting competitive advantage. Possessing organizational skills,
knowledge, and structure to make use of the resources is essential to creating a lasting competitive
advantage. Volvo won't be able to fully utilize all of its resources if it is not structured on its strengths.

According to the table above, the resources of the product portfolio and synergy among various
product lines Volvo is still valuable in the industry given different segmentations according to customer
preferences. Volvo's competitors are likely trying to enter the lucrative segments because of the rarity
and the attractiveness of the segments for example profitability, market shares, competitive advantage
diversification, and customer demand. The imitation of Volvo can be imitated by other competitors.
For organization, Volvo has used it to good effect, and the details can be found in the case exhibit.
Lastly, the competitive advantage for Volvo provides a short-term competitive advantage but it requires
constant innovation to keep sustained.

Secondly, the resource is the pricing strategies of Volvo. For value, Volvo has sound pricing
strategies, and it is still effective because pricing strategies are built upon its brand positioning, product
differentiation, focus on safety and reliability, value-added features, customer perception, and targeting
of the right market segments. These factors collectively contribute to Volvo's ability to effectively price
its vehicles and maintain a strong value proposition for customers. Besides that, pricing strategies of
Volvo are regularly imitated in the industry because of several factors: success and market recognition,
perceived customer demand, industry benchmarking, and many more. This is also affected by the
organization because Volvo provides a pricing analytics engine. Lastly, for the competitive advantage,
it can only provide Volvo with a Temporary Competitive Advantage.

The next resource is the Supply Chain Network Flexibility of Volvo. The value and the rarity
of the Volvo are established and have been identified. Imitation is near competitors and Volvo has a
flexible supply chain and they share the same suppliers and the organization is fully utilized by Volvo’s
organizational structure and capabilities. The competitive advantage for the company is keeping the
business running.

Furthermore, the resource is the vision of the leadership for the next set of challenges. The
value of Volvo is established but this company lacks rarity and Volvo needs to put their company in a
position of competitive parity. It is recommended for Volvo to go back one step and reassess. Volvo
also cannot be imitated by competitors and Volvo Company can lead to strong competitive advantage.

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 Lastly, the resource is alignment of activities with Volvo corporate strategy. For these
resources, the value is established but this resource lacks rarity and Volvo needs to put their company
in a position of competitive parity. For the imitation, each of the companies has their own strategies
that they use. For the organization, Volvo has organizational skills to extract the maximum out of it and
the competitive advantage of Volvo is still lots of potential to build on it.

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4.0 CONCLUSION

a. Whether Volvo achieves its objectives

Famous for its safety features, one of Volvo’s main objectives is to develop advanced safety
technologies into their vehicles to ensure the safety of the passengers, and pedestrians. In this case,
Volvo once again has managed to impress the public with its latest safety system that they have invented
into their Trucks. In July last year (2022), Volvo introduced a new safety system to protect cyclists,
motorcyclists, and pedestrians by adding a road user dictator to their Trucks’ blind spots. Accidents
commonly happen involving trucks and other road users due to its blind spot and it has become a
concerning matter. Due to this, Volvo introduced this new feature into its Volvo FH, FM, and FMX
with diesel, gas, and electric drivelines starting in September 2022. The technologies being innovated
to create the Side Collision Avoidance Support that would inform drivers whether it is safe to turn or
move through a red-light flash and warning sound from the potential collision side. Hence, Volvo did
not fail to obtain its objective of creating safety technologies through its vehicles.

The second objective of Volvo is its sustainability. In order to preserve the environment, Volvo
has been aiming to reduce carbon emissions, increase fuel efficiency, and also transition to the current
vehicle technology which is electric and hybrid vehicles. According to Automotive World est. 1992 in
February 2021, Volvo received the Platinum Medal from EcoVadis, which is the world’s largest and
trusted provider for rating business sustainability. Anders Karrberg, head of Global Sustainability at
Volvo mentions that they are acting toward reducing carbon footprint through their well-known
technologies and moving to their goal to become a climate-neutral company by 2040. This shows that
Volvo is realizing its objectives through its technologies and artificial intelligence to preserve the
environment.

Next, the objective is striven to create innovation and technologies. In this outcome, Volvo
outdid other automobile brands in creating and improving the technology features in their products and
services. The technology that they use to fasten the process of their vehicle maintenance is UV eye AI
which could check tires, missing parts, defects, and many more in their vehicles. Hence, Volvo is
moving towards its objectives as the technologies being used are not only very up to date, but also
improve their services.

Lastly is customer satisfaction, which is also one of Volvo’s main objectives. The excellent
quality of products and services that Volvo put into creating the best customer experience. The excellent
services and products that they offer increase customer loyalty and increase the number of potential

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customers as they keep ethics over profits. They have gone the extra mile to ensure the safety of their
customers and other road users, hence making it an honorable brand while giving out the best services
to their customers by providing the best technologies in the automotive industry.

In simple words, Volvo is achieving its objectives through its technologies, innovations, and
artificial intelligence that are being used in its value chain. Not only that, but they also strive extra hard
to create and innovate new technologies that could help them to reduce the carbon footprint which is
an honorable movement to see that they are very concerned about our environment. Not only that, but
the technologies that they have created to ensure the safety of their customers and other road users have
saved many innocent souls.

b. How Volvo could sustain its competitive advantage

Even though Volvo is one of the leading brands in automotive, it is important for them to
sustain its own uniqueness in order to keep its products and services valid throughout generations.
There are a few things that Volvo could do in order to sustain its competitive advantage. The first step
that they could sustain is by focusing on electric vehicles (EVs). We are aware that many automotive
brands nowadays are moving towards electrical vehicles due to environmentally friendly movement.
Hence, Volvo should make a significant movement in developing and creating its own line of electric
vehicles. Moreover, based on The Economic Times, the number of sales of electric vehicles in 2022
have increased by 60% globally.

Other than that, Volvo could also enhance its autonomous driving technologies. As we know,
Volvo’s technologies in their advanced driver-assistance systems (ADAS) are very reliable, but they
should still try to enhance the technologies. This is because technologies are moving very fast every
day and competitors could duplicate or find loopholes in our current technologies. Hence, Volvo should
enhance its autonomous driving technologies to create all-time advanced technologies being offered to
its customers. Moreover, these impressive technologies could attract customers that are interested in
value cutting-edge technologies.

Lastly, Volvo should strengthen its brand positioning. Their current interest and commitment
to safety and sustainability should be mentioned repeatedly. This is to ensure and make certain of the
public regarding their main objective and how this company works. This could be done through
marketing efforts and press releases. When the public is aware of Volvo’s position in maintaining the
environment and creating the best safety feature for all road users, it would attract many people to
support their brand.

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 c. Why is this solution chosen?

The reason why Volvo should focus on electric vehicles is due to the concerning condition of
our environment. Other than that, Volvo also decides to move towards clean energy, hence choosing to
emphasize more electrical vehicles which would help them align with their stated objective. Not only
that, choosing to focus more on their electrical vehicles would only help them to stay at the top ladder
in the automotive industry as they are following the growing demand for electric vehicles.

Famous for its safety features, Volvo still needs to make continuous investigations and
innovations towards the utmost safety features in its vehicles. By doing thorough research into
developing a greater safety feature, it surely would remain the brand’s main key differentiator. Not only
that, but they would also be able to maintain the top ladder when it comes to safety features in vehicles.
Also, this solution is being chosen due to the ability of it to align with their stated objective.

Lastly, Volvo should enhance its brand positioning by using a great marketing mix to create a
bigger market. A great product is nothing without its marketing movement. Hence, strengthening its
brand positioning creates a bigger opportunity for Volvo to create a bigger gap in its competitive
advantage. Moreover, having a great marketing movement helps Volvo to reach a bigger platform hence
creating a bigger platform for them. Great brand positioning would help the business to receive support
from targeted markets.

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 d. Solid Evidence

The fully electric vehicle that Volvo came out with was XC40, which shows a significant
achievement as it helps to boost Volvo’s sales after its first launch in March 2022. The XC40 recharge
Pure Electric was a great success as it still receives a lot of demand in the current year (2023). Other
than that, the other electric car from Volvo, C40 Recharge Pure Electric also shows an increase in their
number of sales from the local market as they received more than 100 online orders after less than 10
days of its first launch in December 2022. The success of these two models shows that focusing on
producing more electric cars would help them increase their competitive advantage.

The significant evidence shows how great the safety features of Volvo are when two of their
SUVs won safety awards from the Insurance for Highway Safety (IIHS) in 2020. This award requires
them to go through the institute’s pedestrian crash avoidance test and the two SUVs earned the highest
rating. The Volvo XC90 and XC60 both come with a standard Volvo crash prevention system, City
Safety, and high scores on pedestrians’ evaluations. This award dictates that safety features in Volvo
are the best tool to increase its competitive advantage.

Knowing it as a brand that focuses on the safety of road users shows how great their marketing
is. This is because, without great brand positioning, people won’t be aware of their strengths. Other
than that, Volvo also managed to create a great message and campaign to grab the interest of its target
customers. The media content of Volvo shows how great their technologies and features are, and the
cinematic camera play attracted many interests.

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5.0 REFERENCES

Automotive World. (2021, February 1). Volvo Cars receives highest possible sustainability
performance rating from EcoVadis. https://www.automotiveworld.com/news-releases/volvo-
cars-receives-highest-possible-sustainability-performance-rating-from-ecovadis/

Bloomberg. (2023, June 8). Four takeaways on the future of the global electric vehicle market. The
Economic Times. https://economictimes.indiatimes.com/industry/renewables/four-takeaways-
on-the-future-of-the-global-electric-vehicle-market/articleshow/100852618.cms?from=mdr#

Chcom. (2021). Volvo. CompaniesHistory.com - the Largest Companies and Brands in the World.
https://www.companieshistory.com/volvo/

Hope, G. (2022). Volvo to Debut Automated, AI-Based Vehicle Checks at U.S. Dealers. IoT World

Today. https://www.iotworldtoday.com/transportation-logistics/volvo-to-debut-automated-ai-

based-vehicle-checks-at-u-s-dealers

Lowery, L. (2022, March 14). Volvo to launch AI inspection tools that repair shops can also use.

Repairer Driven News. https://www.repairerdrivennews.com/2022/03/15/volvo-to-launch-ai-

inspection-tools-that-repair-shops-can-also-use/

New safety system to protect cyclists and pedestrians. (2022). www.volvotrucks.com.

https://www.volvotrucks.com/en-en/news-stories/press-releases/2022/jun/new-safety-system-
to-protect-cyclists-and-pedestrians.html

Pramanik, C. (n.d.). How Volvo is using AI to market themselves the safest on four wheels.

www.linkedin.com. https://www.linkedin.com/pulse/how-volvo-using-ai-market-themselves-

safest-four-wheels-pramanik

Tomás, J. P. (2022, March 18). Volvo Cars uses artificial intelligence for automated inspection in the

U.S. RCR Wireless News. https://www.rcrwireless.com/20220318/5g/volvo-cars-uses-

artificial-intelligence-automated-inspection-us

The Editors of Encyclopaedia Britannica. (1998, July 20). BMW | History, Cars, & Facts. Encyclopedia

Britannica. https://www.britannica.com/topic/BMW

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Two Volvo SUVs earn 2020 safety awards. (n.d.). IIHS-HLDI Crash Testing and Highway Safety.
https://www.iihs.org/news/detail/two-volvo-suvs-earn-2020-safety-awards

Volvo Car Corporation. (2023, March 23). Volvo Car Malaysia Achieves Record Sales Performance in
2022. Volvo. https://www.volvocars.com/my/news/corporate/volvo-car-malaysia-achieves-
record-sales-performance-in-2022/

Volvo VRIO / Vrin Analysis: Assignment help. Fern Fort University. (n.d.).
http://fernfortuniversity.com/term-papers/vrio/c/1324-volvo.php

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