Business model assignment: Case Analysis of Volvo

Question

Task: You are required to write a 2000-word report for a novel business proposal you have developed. The business proposal must build upon your value proposition developed in assessment 1 for the existing business or organisation selected in assessment 1. You must use appropriate headings to structure the body of the report.
Your report must demonstrate:

1. Logical and persuasive articulation of: business model description; value proposition development; business operations development; supply chain development; competitive advantage; financial value capture and strategic fit (this includes elements 5 to 10 in the disciplined entrepreneurship canvas by Aulet (2017, p. xviii) and elements 3 to 9 in the business model canvas by Osterwalder and Pigneur (2010, pp. 16-41)).
2. Logical and persuasive argumentation in regard to how assumptions and uncertainties related to: customer desirability; technical feasibility; and financial viability have been addressed to date and how they will be addressed in the future as described in a phased development plan.
3. Logical and persuasive argumentation for the selection of the innovation tools and techniques used to support the report findings and recommendations. These must be beyond the tools and techniques used in assessment 1. Minimum eight (8) additional tools and techniques must be selected from the unit textbooks and online materials.
4. Logical and persuasive application of the selected innovation tools and techniques used to support the report findings and recommendations. These must be different to the tools and techniques used in assessment 1. Minimum eight (8) additional tools and techniques must be applied from the unit textbooks and materials. Illustrations of the tool usage details can be included in the appendix.
5. Candid and critical self-analysis about assessment 2 tasks including: a reflection on the development of personal innovation capabilities and practices; identification of own personal strengths and weaknesses; supported with examples of own behaviour.
6. Clear flow of thought throughout the report with: a convincing executive summary; clear and succinct purpose described in the introduction; relevant structure and content within the body of the report; and a clear and succinct conclusion.
7. Critical review skills and integration of relevant academic and professional literature. A minimum of ten (10) academic and professional references must be used.
8. Appropriate in-text referencing and reference list. Adherence to CQUniversity APA reference style.
9. Clarity of expression, grammar and spelling. Appropriate report format with good use of bullet points, illustrations and figures. Within ±10% of the word limit for report, excluding references and appendices: 2000 words.

Answer

Executive Summary
The current business model assignment focuses on the illustration of marketing management section by undertaking the branded automotive organization, Volvo Inc. In order to understand the marketing standard of the organization, the business model of the organization has been framed by involving the elements of processing the business. The discussion provides a brief of the supply chain development of the respective organization and judges the status of the organization by illustrating the competitive dimension in the respective industry. It also evaluates the viability of the proposal made the securing the sustainable status for the organization and draw the conjecture by recommending on meeting the gap of the system.

Introduction 
It is discussed in this business model assignment that in order to construct a robust basement for the operational platform of an entity, it is important to work by implementing well defined business model that will speak of its sustainability. A business entity is exposed to the operational threats without prior planning of the operation. The Business Model Act as a shield in supporting the organization. It helps the organization to grow by merging its working prototype along with it (Carayannis, Sindakis & Walter, 2015). The business model is a framework that supports the system by providing a predefined work statement for the workers. It helps in setting goals for the employees and operates accordingly. Any particular organization needs a specific prototype in operating its business. The business model is the susceptible structure which assists the organization by complying with the work objectives.

Business Model Description
The design that yields effectiveness in performing business operation over a particular organization can be considered as the business model of that particular operating segment (Taran, Boer & Lindgren, 2015). In order to create a susceptible ground for the future marketing segment, the organization needs to outline a confined structure that would lead to the formation of business model. The managerial body needs to frame out the outline for the organization which will prove to gain sustainable ground for the respective market. In the course of formulating a proper business model, the authorities need to evaluate and investigate over marketing augments. This includes Market analysis which helps the organization to understand the viability of the emerging product. It is also responsible for investigating the market sustainability of the brand based on which the company will make its further progress. Then comes the background of the organization and the project about which it has been planning to form the business proposal. After drawing the conjecture of the project, it is essential to scrutinize the management section of the company that is solely responsible for implementing the proposal taken by the company. In the persuasion process of checking the susceptibility of the product or service, sales management plays a vital role in determining further growth of the organization. In support to the marketing process, the company needs to stabilize the product service based on which the further marketing segment can be administered. In order to stabilize the system, the company has to draw proper production unit or manufacturing unit whose involvement helps to meet the market demand for the company. The most important element needed in accomplishing the business project is the fund gathering process without which the whole system is subjected to distortion. Then come, the management roles whose strategic plans draw the success factor for the project undermined by the particular company. The whole thing is encapsulated by the operational functioning of the finance department. Its involvement helps in gaining the stability of the system by providing an economic flow needed in computing the operation of the particular project. In the case of the Volvo Inc discussed in business model assignment, all the augment seems to be operated by merging with one another in the course of stabilizing the growth factor of the respective organization. In spite of having a vulnerable statement, it has managed to draw global attention and still working in the path of success. 

Value Proposition Development
The specified concept assists the organization in aligning the objectives of the stakeholders that give rise to the successful objective need for operating the system (Chandler & Lusch, 2015). It is considered as the value essence of the company by company with the respective company propels its growth over the respective market (Urde, 2016). It helps in forming the Company’s USP that effectively act in drawing the attention of the customers. In order to maintain the customers’ loyalty, the Volvo developed a model of XC90 that involved the stakeholders in generating effective financial statement in programming the respective project. (Vorbach, Müller & Poandl, 2019). The Volvo Truck is one of its leading producers of heavy transportation system. Through this platform it has successfully maintained the value proposition of the respective entity.

Business Operation development
Car Free Carrier is a system that provides transportation to the customers irrespective of involving the direct sale of vehicle (Deng, 2018). Being a continuous producer of the automobile, it can adopt this system in growing new opportunities in making expansion to its operational segment. Two major advantages of the company discussed in this business model assignment in developing its operational ground are

1. Generating revenue through the products lifecycle by providing lifetime support to the customers adopting its product. This system helps in maintaining the faith of the customers over its brand and made great contribution in yielding brand’s importance. 
2. The active performance of the employees in taking customers feedback earned an additional background of dependency. This concept generated the well figure of customers’ retention and helps the entity in securing the financial augment throughout its operation. 

Supply Chain Development
The logistic area of the company includes function section that speaks of “design, develop, operate and improve” ("Logistics | Volvo Group", 2019). This has been the propelling factor of its logistic growth that has yielded the company the fame that has speaks of the marketing glory. Other than the heavy truck vehicles and 4 wheelers, it has effectively enhancing the product variability by introducing the construction equipment for which it gained a fame of becoming the largest manufacturer of excavators, road development machines and so on (Gu, Thome, Alicke, Haller & Protopappa-Sieke, 2017). This has managed to earned approximately 53 billion of Swedish Kronor from its net sale made through global market. Through this operational means, the company has successfully managed to acquire its status in the global field as premium producers of the specified goods. The innovation protocols earn the recognition as a major player in the construction industry. This achievement is acquired due to the involvement of three brands i.e. Volvo CE, SDLG and Terex Trucks (Gu, Thome, Alicke, Haller & Protopappa-Sieke, 2017).

Financial Value Capture
The branded automotive organization illustrated in this business model assignment has set its objective by preparing the business object through the sustainability factors that matches with the welfare of the environment. The current growth rate shows slower rate of income in the European territory and is planning to expand its business for making susceptible background for the organization. Its expansion in the Chinese territory, seem to be profitable it's one judge by evaluating the future aspect of the respective market (Onofre, 2018). In the course of reducing the financial constraints caused through the financial schemes provided especially for the customers availing its valuable product. This can be judged as an additional sector through which the company has successfully meet the customer aspects and goal set prior to the operation.  

Competitive Advantages mentioned in this business model assignment
In the course of serving the social and environmental responsibility it has managed to set initiative in developing such vehicles that will help in reducing the carbon footprints of the respective organization. Involvement vehicles is the core centre of releasing the carbon content by enhancing the combustion of petroleum based fuel. It has become an emerging trend among the automobile industry in designing and developing such vehicle that will speaks of its role towards curbing negative implication over the environment.The company has successfully managed in setting two section of competitive ground that speaks of the sustainability in the requisite market. It is very obvious for the customer to look for low maintenance vehicles and is easy to handle. In the course of meeting so, the company has taken initiative in fulfilling the demand by bringing new vehicles model with lifetime coverage of service. In case of attaining, the customers have to pay certain amount for securing the term services that serves the maintenance for a particular period. In the course of availing the scheme, the customers have to reissues the services that come in terms of money (Onofre, 2018). In the continuous growth of the global economy changing cost pattern of the particular company. Where maximum of the company has been increasing the costing system of the vehicles, Volvo has kept the availability cost of the automobile at a marginal cost. In spite of the lower costing system, the company has managed to earn a net equity that values SEK 125.5 billion approximately. In the course of reducing the stress of R&D, it has collaborated with different universities. This gave Volvo the chance in reducing the extra flow of cash and stress within its own segment.   

Strategic Fit
Strategic fit between the dynamism of innovation of the particular service or product gives to the rise of competitive background for the particular segment of industry (Prajogo, 2016). Acquiring strategic fit often lead to the two potential rivals, hence bringing the competition and giving rise to the stable business environment in the respective market (Prajogo, 2016). The marketing segment mentioned in this business model assignment has shown many instances where the collaboration causes two entities in bringing the profitable statement for the company. It also showed the downfall of the growth creating place of conflict in between the entities. One of the significant examples evidenced in the market is the splitting of the world renowned company Volvo and Renault (Geberkian & Mukhtar, 2017). The alliance established between two mature entities is susceptible to the survival strategy made by the individual company. Not necessary that the company has to follow the path which is causing its opponent benefits and brings the downfall of its own growth.

Identification and Assessment of Assumption and Uncertainties
Implementing new project for the purpose of gaining stable background is the continuous process adapted by the organization in the course of obtaining a secured place in the respective market. Volvo has been earning its revenue by focusing specifically over the automotive industry ("Annual reports | Volvo Group", 2019). With the rising consciousness of people, the fall of the vehicles that contribute its negative implication towards the atmospheric changes are evident. To prevent such implication from deteriorating the market, the Volvo needs to immediately act in bringing new product that will speak of future sustainability goals.  

Phase Development plan to address Uncertainties
Currently the company has been working over the sustainable development of the product and services ("Annual reports | Volvo Group", 2019). In respect of creating a promising future for the company, the authorities need to expand its product and services that hold a susceptible ground in the future market. Here, the developmental plan related to the products will be addressed for ensuring that the preferences of different segments of the customers have been taken into consideration. On the other hand, the cost-effective approach of product development depends on viable strategic planning and effective deployment of technology (Deng, 2018). Complying with evolving technologies, as supported by the market, can help the company to maintain its stronghold on the operational sphere to deal with uncertainties.

Selection of Innovation Tools and Techniques
In the course of establishing a prospective business model the company need to adopt maximum elements which are responsible for giving the success factors of the undermine project. Especially it needs to adopt certain tool that comply with sustainable factors and will prove to give susceptible ground for the organization. Four of the major tools for innovation might include the following-

• Communication: Communication, the key to successful innovation, can facilitate the flow of innovation in the organizational culture of the company. 
• Team Building: Team building activities result in the formation of effective communication and creating mutual understanding among team members. This bonding may enable the team members to come up with innovative solutions. 
• File Management: This process can initially be considered an innovation tool as it reduces the time required for searching for the information that can be used for brainstorming into the innovation process. 
• Team Management: The aspect of team management relates to the concept of innovative management. With the deployment of necessary organizing skills and the provision of effective instructional guidance, the action of team management can lead to the generation of innovative solutions (Carayannis et al. 2015). 

Apart from these, conception based stimulation to innovation, conduction of viable market research, and software like Viima or Ideawake can be deemed as effective. All of these tools provided thin this business model assignment can be used in setting the innovation process within the company into motion and keeping its flow intact. 

Candid and Critical Self Analysis
Personal Innovation capabilities and practices: In spite of holding the brand name by which the world recognizes it, but has got other side of story that speaks more of sustainability than volatility. Being the automotive giant it has successfully paved its path in maintaining the sustainability over the respective market. It deals with service that specifically acts over the automotive needs of customers. Being the largest equipment generator of the construction site, it has demonstrated a different side of achievement (Gu, Thome, Alicke, Haller & Protopappa-Sieke, 2017). In the course of maintaining the customer flow into the organization, it has provided schemes that support the customers by providing vehicular services and financial support by issuing vehicular insurances and loan services.  As far as innovation is concerned, my strengths and weaknesses are as follows.

Strengths

• Learning from leaders
• Capability for conduction market research to support innovation
• Possession of clear theoretical ideas on innovation and change management as I invest certain hours of the day learning about the immediate mechanisms

Weaknesses

• Lack of simplicity in approach
• Lack of knowledge regarding effective team-building to support innovation
• Lack in clarity while setting goals for increasing innovative skills and this factor is creating significant difficulties for me when it comes to deadline-based self-learning

Conclusion and Recommendation
Formulation of Business Model discussed in this business model assignment not only paves the operating path for the particular organization but provided a strong backbone to the operational segments of the entity. It provides the organization with the business objectives that gives rise to successful business prototype for the organization. By analysing the case of Volvo, various implications are drawn. On one side, it seems to lead the automotive industry by providing magnificent heavy duty vehicles. On the other side it failed in maintaining a strong basement. This implication is drawn due to the transition of powers and in the mean course lost its own ethnicity. It has been solely performing in the automotive industry but has hardly made the business expansion over other industry. 

In order to enhance the sustainability factor it is discussed in this business model assignment that it is necessary for the company to make expansion over the other side of business. It needs to develop its own R&D segment for having better understanding over the actually need of standard resources.  

Reference List
Annual reports | Volvo Group. (2019). Retrieved 27 September 2019, from https://www.volvogroup.com/en-en/investors/reports-and-presentations/annual-reports.html

Carayannis, E. G., Sindakis, S., & Walter, C. (2015). Business model innovation as lever of organizational sustainability. The Journal of Technology Transfer, 40(1), 85-104.

Chandler, J. D., & Lusch, R. F. (2015). Service systems: a broadened framework and research agenda on value propositions, engagement, and service experience. Journal of Service Research, 18(1), 6-22.

Deng, P. (2018). Car Carrier Operation Mode Innovation and Development Path.

Dentchev, N., & Jonker, J. (2013). Towards sustainable business models: Necessity, opportunity or challenge?. Reading: Academic Conferences International Limited. 

Geberkian, D., & Mukhtar, S. M. (2017). Determinants of the international strategic alliance process and alliance failure: learning from the Volvo-Renault break-up. International Journal of Strategic Business Alliances, 6(1-2), 86-110.

Gu, W., Thome, A., Alicke, K., Haller, I., & Protopappa-Sieke, M. (2017). Business model assignment The Supply Chain Segmentation Journey of Volvo CE. In Supply Chain Segmentation (pp. 37-46). Springer, Cham.

Logistics | Volvo Group. (2019). Volvogroup.com.

Onofre, F. (2018). AB Volvo (Doctoral dissertation).

Osterwalder, A., Pigneur, Y., Oliveira, M. A. Y., & Ferreira, J. J. P. (2011). Business Model Generation: A handbook for visionaries, game changers and challengers. African journal of business management, 5(7), 22-30.

Prajogo, D. I. (2016). The strategic fit between innovation strategies and business environment in delivering business performance. International Journal of Production Economics, 171, 241-249.

Taran, Y., Boer, H., & Lindgren, P. (2015). A business model innovation typology. Decision Sciences, 46(2), 301-331.

Urde, M. (2016). The brand core and its management over time. Business model assignment The Journal of Product and Brand Management, 25(1), 26-42. doi:http://dx.doi.org/10.1108/JPBM-05-2015-0875

Vorbach, S., Müller, C., & Poandl, E. (2019). Co-creation of Value Proposition: Stakeholders Co-creating Value Propositions of Goods and Services. In Co-Creation (pp. 51-62). Springer, Cham.