Volvo 2013 Annual Report Download - page 34

A GLOBAL GROUP 2013 BUSINESS MODEL
BRANDS
Strong brands are important assets
The Volvo Group does business under several leading and respected brands. These are strategic
assets through which the Volvo Group delivers value propositions addressing the specifi c needs of
customers around the world. The Volvo Group, as part of a brand portfolio strategy, is therefore
working to further strengthen the image for its brands while simultaneously improving delivery on
customer expectations. This will allow the Group to optimally address the total market.
SSince taking the strategic decision
to focus on commercial vehicles,
the Volvo Group has built a strong
portfolio of brands. Through direct
ownership, licenses and joint ventures, the
Group has access to a range of iconic and
industry-leading names like Volvo, Mack,
Renault Trucks, Volvo Penta, Nova and Prevost.
On the truck side, current product brands
include Renault Trucks, Mack, UD Trucks, Volvo,
as well as Eicher through the joint venture with
Eicher Motors in India.
Volvo and SDLG branded construction
equipment, Volvo, Sunwin (in a joint venture in
Shanghai), Prevost and Nova branded buses
and Volvo Penta marine and industrial engines
make up the major product brands in the busi-
ness areas.
Portfolio structure unlocks hidden
potential
Leveraging our brand portfolio to increase mar-
ket coverage is at the center of the new Group
organization. The Volvo Group has gone from a
decentralized brand-by-brand strategy, to utiliz-
ing a brand portfolio perspective.
By clarifying the purpose of each brand in the
Group portfolio, we are going to increase mar-
ket coverage and be able to strengthen rela-
tions with a broader customer base. This has
meant taking a holistic approach to the mar-
kets, while previously each truck brand oper-
ated relatively independently and often towards
the same customers.
Furthermore, we will be able to better utilize
the other strategic assets we have built over
time – global scale, industrial footprint, distribu-
tion networks, supply chains and customer rela-
tionships.
Specifi c segments and customers
During the past two years, the prerequisites to
execute on a brand portfolio strategy have been
worked on extensively within Group Trucks. This
includes a common approach to market seg-
mentation and linking various aspects of cus-
tomer buying behavior to the individual brands.
Every brand within the Volvo Group has a pur-
pose and delivers a value proposition to a spe-
cifi c group of customers around the world.
At a global level, Volvo and Mack represent
our premium brands, aimed at customers who
choose a holistic view of the brand and associ-
ated product and service offer. Renault Trucks
is positioned in the high-end space addressing
customers who value total operational cost and
network support. Outside of Japan, UD Trucks
addresses the value segment, a new focus area
for the Group, while UD Trucks in Japan is in the
high-end segment. Eicher, which currently ser-
vices the Indian market, will form the basis of
the Group offering in the highly cost-competi-
tive market segments.
With each truck brand being assigned a spe-
cifi c segment and customer base, Group Trucks
can increase its market share and contribute to
the overall growth of the Volvo Group. The
brand-positioning project has also provided val-
uable input when the Group Trucks organization
designed road maps to reach their strategic
objectives.
New segments – new potential
Growth markets are an important part of the
Volvo Group’s strategy. These markets are driv-
ers of long-term global growth and they offer a
great deal of potential for quality trucks which
balance operational cost with purchase price.
We defi ne this space as the value segment and
are increasing our presence in this segment of
the market.
UD Trucks has launched the Quester, Volvo
Construction Equipment’s SDLG brand is
excelling, Volvo Buses is developing a bus for
the value segment and Volvo Penta’s sales of
both industrial and marine engines are increas-
ing in these market segments.
To succeed in the value segment various
aspects of the business – from design to distri-
bution – are being addressed. The investments
in SDLG and the recent launch of the new UD
Trucks branded heavy-duty truck range, the
Quester, is a huge investment that establish a
new platform targeted to this space and
demonstrates the Group’s commitment to the
value segment.
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