Volvo 2009 Annual Report Download - page 11

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1
Strategy focusing on creating value
– based on customer needs
The market is characterized by intense compe-
tition where customer satisfaction is a key fac-
tor as it represents an assurance of future
sales and future protability. The Volvo Group’s
strategy is based on customers’ requirements
and is focused on protable growth, product
renewal and internal efciency. During 2009,
the Volvo Group further developed its internal
goals within the previously dened three stra-
tegic areas.
Customer requirements
The products and services have high perform-
ance characteristics, quality, safety, flexibility
and offer favorable total economy. Customers
are offered solutions adapted to their opera-
tions regardless of whether they involve a
single product or a complete solution.
Products, services and complete solutions
are developed in close cooperation with cus-
tomers with the goal of contributing to improv-
ing the customers’ productivity and protability,
and thus creating value. Volvo strives to increase
the penetration and proportion of sales coming
from services and soft products, with an offer
consisting of nancing, insurance, various forms
of service contracts and spare parts, super-
structures and attachments.
In the past few years, the Volvo Group has
intensied its relationships with key customers.
The advantages are many. The Group can sup-
port customers’ development in an even better
way than previously, and intensied relation-
ships 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.
Profitable growth
The Volvo Group's aim is to continue to grow while focusing on pro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 with a higher pace in
new markets. Part of the growth may, over time, come from acquisitions in
strategic markets and in strategic product segments.
Protable growth is a necessary condition for the Volvo Group’s continued
strengthening of its competitiveness and development as a partner to customers
with high demands. There is particularly strong growth potential in supplemental
business relating to service and to services in which signicant effort is invested to
give the customer a more complete offering.
Protability is essential to assure investments in research and the develop-
ment of new products and services and a favorable return to the shareholders.
Part of the protability is a result of the utilization of economies-of-scale. The
Group's brands shall increase customer satisfaction by offering environmentally-
and cost-efcient products and services.
Internal Efficiency
The Volvo Group strives to optimize cost-efciency and productivity in all sectors
of its operations. The internal cost-efciency work involves reducing production
costs and sales and administrative costs.
Volvo Production System (VPS) is an important tool that contains methods to
make operations more efcient and reduce productivity losses. Competence
development is a key part of VPS. Great effort is placed on developing employ-
ees in new, future technological competencies.
Product Renewal
The ongoing renewal of the Group’s product range and creation of new and
better products and services is a challenge, but a matter of survival. Intense
competition, new environmental standards and safety and quality requirements
involve signi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 rene and 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 net-
work in product development, which is a strong base for meeting future
demands.
The Group redistributes an increasing portion of the resources within
research and development to soft products with the aim of meeting customer
needs through the entire product life cycle.
The majority of the Volvo Group's
customers are involved in commercial
transport-related operations. They
place high demand on both products
and services.
7