Volvo 2007 Annual Report Download - page 16
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Please find page 16 of the 2007 Volvo annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.Strategy focusing on creating value
The Volvo Group’s strategy is based on customers’ requirements and focused on profi table
growth, product renewal and internal effi ciency. Profi table growth and product renewal represent
the Volvo Group’s approach to developing its markets, products and services in order to
strengthen the Group’s development. Internal effi ciency involves increasing competitiveness and
profi tability in current operations. To be successful, this strategy must be implemented rapidly.
The customers of the Volvo Group conduct pri-
marily transport-related operations. They place
high standards on products and services. In a
market characterized by intense competition,
customer satisfaction is a key factor, as it repre-
sents an assurance of future sales and is a con-
dition of strong profi tability.
The products and services have high per-
formance characteristics, quality, safety, fl exibility
and total economy. Customers are offered
solutions adapted to their operations, regardless
of whether they involve a single product or a full
program involving products and fi nancing,
insurance and various service contracts.
The products and services are developed in
close cooperation with customers, with the goal
of contributing to improving the customers’ pro-
ductivity and profi tability, and thus creating
value. Intensive cooperation with customers is
crucial to enabling the Group to better under-
stand customers’ requirements and to match
their expectations with the right offering. The
level of quality of the offering is also determined
by how customers are treated and how the serv-
ices are performed. Product characteristics and
quality are highly signifi cant, but equally impor-
tant are knowledge, values, attitudes and
behavior of the Volvo Group employees.
In the past few years, the Volvo Group has
intensifi ed its relationships with key customers.
The advantages are many. The Group can sup-
port customers’ growth in an even better man-
ner than previously, and intensifi ed relationships
result in increased penetration of both the prod-
uct and the service range. The extended offer-
ing creates advantages for both the Volvo Group
and its customers.
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Profi table growth
The Volvo Group’s aim is to continue to grow while focusing on
profi tability. Growth is to occur both organically and through
acquisitions. The aim is to grow by 10% a year over a complete busi-
ness cycle. Over half of growth is to be organic, while the remaining
portion is to come from acquisitions. The acquisitions are to take place
in strategic markets and in strategic product segments.
Profi table growth is a necessary condition of the Volvo Group’s continuing to
strengthen its competitiveness and develop as a cooperation partner to customers
with high demands. There is particularly strong growth potential in supplemental business
relating to service and to services in which signifi cant effort is invested to give the cus-
tomer a more complete offering. Profi tability is essential to assure investments in research
and the development of new products and services, as well as a favorable return for the
shareholders.
Internal effi ciency
The Volvo Group has a clear focus on effi ciency, particularly in relation
to profi tability and customer satisfaction. The Group strives to
optimize cost-effi ciency and productivity in all sectors of its oper-
ations. This promotes higher profi tability and places the Group in a
better position to handle economic fl uctuations.
Part of the internal cost-effi ciency work involves reducing production
costs and the costs of sales and administration. Product costs must be con-
stantly monitored to create competitiveness without compromising on quality. Get-
ting it right from the start increases customer satisfaction, keeps costs down and saves
time and energy. The Volvo Group’s capacity to handle development projects, combined
with its ability to rapidly introduce processes for new ways of working, contributes to
increased profi tability.
Product renewal
The ongoing renewal of the Group’s product range and creation of
new and better products and services is both a matter of survival
and a challenge. Intense competition, new environmental standards
and safety and quality requirements involve signifi cant demands on
the entire product development process.
The development of new, innovative technology is key to the success of
future product generations, and to maintaining market-leading positions.
Efforts are constantly under way within the Group to improve the performance of
products – this strengthens current competitiveness. At the same time, research looking
further into the future is conducted to achieve new technical breakthroughs that will
contribute to reduced environmental impact and meet future requirements. Product
development represents an assurance of value creation in the future.
Customer requirements Strategy
12 A global group 2007