Volvo MBA Class Presentation
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Volvo realized that as cars became more technologically advanced, they needed to develop more direct relationships with consumers to stay competitive. They transformed their business model from solely B2B to B2B2C by providing direct services to consumers through digital technologies like connectivity features and roadside assistance, without disrupting relationships with dealers. This allowed Volvo to evolve from just selling products to offering value-added services and develop new digital businesses. They implemented features like "Push to Talk" and the "Volvo On Call" service to connect directly with drivers and create a more consumer-centric business model.
Volvo MBA Class Presentation
- 1. Reconfiguring Value Delivery Models-- Volvo Presented by GROUP F Nanaries Ahmed – Mohamed Morsy – Mahmoud Gafaar - Khaled Fouad – Seif el din hussein
- 2. Automotive Value Chain Issue • Many Automakers are B2B companies. They produce cars and sell them to dealers. • Dealers are costly and above all they own customer relationship. • Volvo realized that they have network of 23,000 dealers in 100 countries, which dealers manage all sales and after sales service while Volvo itself has low or no direct knowledge of end-consumer • Also they realized that cars sold as single products became obsolete however, they are sold as transportation solution packed with IT & Communication technologies “Opportunity and Threat of rapid digital revolution” • “How to develop more direct relationship with end consumer without disrupting its dealers relationship?”
- 3. Reinvent business model • Transformation of business model from B2B to B2B2C. Reconfiguring the value chain to deliver at a substantial efficiency advantage against competitors • Volvo Provided services directly to end consumer without competing with dealers, in fact, services reinforced the attraction to a Volvo cars. Moving from products to value-added services, • To evolve this B2B2C Model they relied heavily on digital technologies- Mobility, Social Media, Analytics and Smart embedded devices. Creating new digital businesses or services, either to augment the current business model or to replace it
- 4. Reinvent business model • Adding “Push To Talk Button” to develop connected cars concept. • Adding “ Volvo On Call” roadside assistance service. Where driver of new Volvo car can push button to talk directly to an operator. Also they made it available on mobile apps to serve customers owning an older car. Making the transition from multinational to truly global operations • “On Call Service” included for several years after purchasing a new Volvo then its renewable, for a fee Moving into brand-new markets.
- 5. 5 Archetypes Of Business Model Invention • 1st Reinventing industries, involves reshaping of an industry structure. • 2nd Substituting products or services, when core product or service is directly substitutable to a new digital format • 3rd Creating new digital businesses, creation of new product or services that generates revenue. • 4th Reconfiguring value delivery model, means recombining products, services and data to change the way a firm plays in the value chain • 5th Rethinking Value Proposition, using new digital capabilities to target unmet needs for existing or new customers
Editor's Notes
- #6: Internal statistics like cost, system uptime and internal productivity application