Volvo 2008 Annual Report Download - page 14

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Strategy focusing on creating value
The Volvo Group’s strategy is based on customers’ require-
ments and focused on profi table growth, product renewal
and internal effi ciency.
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Customer requirements
The customers of the Volvo Group are primarily
involved in transport-related operations. They place
high demand on products and services. In a market
characterized by intense competition, customer
satisfaction is a key factor, as it represents an
assurance of future sales and is a condition of
good profi tability.
The products and services have high perform-
ance 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 contrib-
uting to improving the customers’ productivity and
profi tability, and thus creating value. Volvo strives to
increase the proportion of sales coming from servcies
and soft products.
The level of quality of the offering is also deter-
mined by how customers are treated and how the
services are performed. In the past few years, the
Volvo Group has intensifi ed its relationships with
key customers. The advantages are many. The
Group can support customers’ growth in an even
better way than previously, and intensifi ed
relationships result in increased penetration
of both the product and the service range.
The extended offering creates
advantages for both the Volvo
Group and its customers.
Strategy
Product renewal
The ongoing renewal of the Group’s product range and creation of new and better prod-
ucts 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. The Volvo Group has a unique strength in its global
network in product development, which is a strong base for meeting future demands.
The Group sets a side a portion the resources within research and development to
soft products with the aim of meeting customer needs through the entire product life
cycle.
wal
up’s product range and creation of new and better prod-
The ongoing renewal of the Group’s product range and c ation of new and bet prod-
tter of survival and a challenge. Intense competition, ne
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fety and quality requirements involve signifi cant demands
ent process.
on the entire product development process.
key customers. The advantages are many. The
Group can support customers’ growth in an even
better way than previously, and intensifi ed
relations
hip
s result in increased penetration
of both the product and the service range.
The extended offering creates
advantages for both the Volvo
Group and its customers
.
throughs that will co
ments. The Volvo Grou
, which is a stron
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as
network in product development, which is a strong base for meeting future demands.
tion the resources w
meeting customer ne
cycle.
Profi table growth
The Volvo Group’s aim is to continue to grow
while focusing on profi tability. Growth is to occur
globally, both organically and through acquisitions.
The aim is to grow by 10% a year over a complete
business cycle. More than half of the 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. The goal is to grow
at a higher pace in new markets.
Profi table growth is a necessary condition of the Volvo Group’s continu-
ing to strengthen its competitiveness and develop as a cooperation partner to
customers with high demands. There is particularly strong growth potential in sup-
plemental business relating to service and to services in which signifi cant effort is
invested to give the customer 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 tabil-
ity and customer satisfaction. The Group strives to optimize cost-effi ciency and
productivity in all sectors of its operations.
Part of the internal cost-effi ciency work involves reducing production costs and
sales and administration costs. Product costs must be constantly monitored to
create competitiveness without compromising on quality. Getting it right from
the start increases customer satisfaction, saves time and energy and
keeps costs down. 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. Employee
development is a key part of the work with internal effi ciency.
10 A global group 2008