A Project submitted in partial fulfillment of the requirements for the completion of the course

of

Managing Business Markets

To
Prof. Joffi Thomas
On

Volvo Group
As a part of Post Graduate Programme in Management

INDIAN INSTITUTE OF MANAGEMENT KOZHIKODE

November 2019

Anshu Jyoti PGP/22/009

Mohammed Farhaan PGP/22/146
Cesare Pastore IE/22/005
 Course Project-Option 2:
Understanding and Delivering Customer Value

Understanding Customer Value

VOLVO FH16
Price 160000 €
Weight: 18,3 tons
Payload: /
“A beauty to the surface a beast under the hood!
Designed for the heaviest and most demanding operations. The Volvo FH16 is our most powerful truck. Its
distinctive design expresses the massive capabilities built on it, as well as its level of refinement. It’s one of
the safest and most comfortable workplaces in the industry”

Exteriors

 PEERLESS DESIGN
The stance is solid and purposeful, with one thing in mind. Efficiency. The more aerodynamic the truck is,
the more you'll get out of every drop of fuel. That’s why we've fine-tuned the cab design and spoilers.
Making it all glide smoothly through the air. Saving fuel - and reducing the environmental impact.

 BOLD. CONFIDENT. ASSERTIVE

Our aim was to create a solid, flowing shape, instead of a front and two sides. This is why the lines and
graphics sweep around the whole cab.
The truck’s stance, its visual attitude, was a key consideration, too. The form expresses the truck’s efficiency
and dynamics. It appears to lean forward, wheels pressing at the ground. It’s bold. Assertive. It’s ready to
work.

 SLIMMER SIDE MIRRORS

The side mirrors add to the cab’s distinctive profile. Mounted further away from the upright A-pillar on a
slender arm, the new design increases the driver’s field of vision and improves the truck’s aerodynamics.

 PRECISION FIT. PERFECT FINISH

The cab is big, but its aero-led design means it has a low air resistance. The precision fit of the panel joints
means there’s no gap between the lower and upper cab. Air flows around the cab instead of through it –
enhancing aerodynamic performance and reducing fuel consumption.

 THE PERFECT WORKPLACE

We've reinvented the Globetrotter. Unparalleled comfort on the inside. World-class safety on the outside.
And a visually stunning design that stands out on the road

 Choose from over 650 colours

Save time and money by not having to visit a separate paintshop – just have your Volvo cab delivered in the
colour you like. Choose from over 650 different hues, tints, and shades. And if you don’t find the one you’re
looking for, we can virtually mix any colour for you.
Interiors:

 Space and comfort for driving and living

 4 CABS
- Globetrotter XL cab:
o Interior height 220 cm (211cm on the engine tunnel)
o 1 or 2 beds
o Abundant storage space
- Globetrotter cab
o Interior height 205 cm (196cm on the engine tunnel)
o 1 or 2 beds
o Generous storage space
- Sleeper cab
o Interior height 171 cm (162cm on the engine tunnel)
o 1 bed
- Lower sleeper cab
o Interior height 147 cm (138cm on the engine tunnel)
o 1 bed

 BUILT-IN PARKING COOLER

Superior cooling, without compromising internal space or aerodynamics. I-ParkCool is an integrated parking
cooler that controls the temperature at night, and saves fuel during the day.

 CLEVER AND COMFORTABLE STEERING

The fully adjustable steering wheel, which comes with a 20-degree necktilt function, makes driving more
comfortable. Conveniently controlled by a foot pedal, you can also move it out the way when you enter or
exit the cab.

 A CLASS-LEADING SEAT
The seat adjustment range is world class. You can move it 24 centimetres from front to back and 10
centimeters up or down. The shape also gives superior lateral support and provides improved support for
those with longer legs.

 ECC WITH AIR-QUALITY SENSORS

The electronic climate control has improved air vents and a multitude of sensors and filters that purify the air
before it fills your lungs. The result is unprecedented air quality, improved defrosting and a draft-free
environment.

 SYSTEM FOR SERVICES AND INFOTAINMENT

Easy-to-use navigation, Dynafleet, improved communication and quality audio entertainment. Volvo Trucks’
integrated system for services and infotainment brings these features together in one interface – a seven-inch
touch screen. Operate it manually, via voice commands, and through steering wheel buttons.
Rethink your in-cab experience.

 EASY-TO-USE
Simplify control of your services and infotainment. And feel the benefits: a better, safer driving experience,
easier navigation and more efficient fleet management.
This system combines the cab’s audio and entertainment unit with the Dynafleet and navigation functions.
Integration of services and infotainment means they’re easy to operate. Touch the screen, hit the steering
wheel buttons or use your voice. Whatever suits you best.

 SAFETY-CONSCIOUS SKYLIGHT

The tinted glass sunroof adds to the spacious, light and airy feeling inside the cab, and doubles as an escape
hatch. It also comes with a sunblind, a mosquito net, and the option for electronic controls.

Other feauteres
 Navigations
The navigation system accepts a range of direction inputs (addresses, coordinates or a touch on the onscreen
map. Fleet managers can send destinations from the Dynafleet portal to the navigation

 Voice activated
A seven-inch touch screen provides easy operation. You can control the functions via buttons on the steering
wheel, or with your voice. Two Bluetooth connections also mean that you can connect two devices at the
same time

 A powerful sound package

USB, AUX or Bluetooth connection, six speakers and a power output of 4x35W

 Dynafleet OnBoard
Stay in touch with your office, plan driving and resting times, let driver coaching help you become more
fuel-efficient.

 Alcolock
Factory fit it to your Volvo FH, and show your customer how seriously you take road safety

 Energy-efficient lighting
13 energy-efficient and powerful light sources illuminate the cab. It helps the night vision

 A sheltering cab
The FH16 can be delivered with an improved insulation of the cab, more comfortable cab climate when
resting even if it’s chilly outside (or Hot)

 Smart Key
Lock on unlock the cab from a distance or use it as a main switch to reduce the electrical power
consumption. Presence of panic button

 Clean water
7 litre tank

 Tv ready
19” tv

 Sleeper panel
You can control the lights, alarm clock, parking heater, parking cooler, audio system, windows, roof hatch
and locks. Without ever leaving the bunk

OIL CHANGE INTERVAL

Up to 100,000 km or once a year with VDS4.

How much could you save with your Volvo FH16?

 I-SHIFT – SIMPLE, DEPENDABLE AND VERY FUEL EFFICIENT

I-Shift maximises performance and efficiency by monitoring and responding to vehicle mass, road
inclination, speed and acceleration. Coupled to a Volvo diesel engine, it reduces fuel consumption by up to
5% compared to a manual gearbox. Combined with I-Roll momentum technology, you save up to 7%. It’s
also really easy to use.

 I-SEE – WATCH YOUR FUEL BILLS DROP

As you drive, I-See uses information about the road gradient to manage speed and gear changes in the most
fuel efficient way. By taking advantage of the truck’s kinetic energy, the system can reduce your fuel
consumption by up to 5%. The biggest savings are made on gentle slopes, but I-See saves you fuel on almost
every gradient

 ALIGN YOUR WHEELS AND INFLATE YOUR SAVING

Using the right tyres, at the correct pressure and on correctly aligned wheels and axles, can reduce fuel
consumption by up to 14%. Our studies across Europe show that two out of three trucks have incorrectly
aligned axles and wheels. So there’s a lot to be gained for very little effort.

 DISCOVER DATA-DRIVEN POWER

Together, Dynafleet and driver training you can save up to 7% fuel

 AIRFLOW PACKAGE
An airflow package can improve your fuel economy by as much as 8%. It reduces turbulence, minimises air
resistance and deflects wind away from the trailer. As well as saving fuel and money, it also
reduces CO2 emissions, which is great for the environment.

B.A.S.E: MERCEDES ACTROS

Price: 160000
Weight 18 tons
Payload 10,39 tons
“Get on board – and discover what Mercedes-Benz can do for you in the long-distance transport sector.
Long-distance transport from Mercedes-Benz. If you want to stay ahead, you need vehicles which deliver top
performance not just on the road, but on your balance sheet, too. The Actros has what it takes to excel in
both respects. Because it provides a high level of comfort. Because its many fuel-saving, innovative
technical features and perfectly matched support services make it distinctly profitable to operate. Because it
offers an effortless, safe and superior driving experience. And because the wide range of equipment and
model versions means that it is possible to configure a truck which is a perfect match for practically any
long-distance haulage task.”

Exteriors

 17 cab variants for use in long-distance haulage and heavy-duty distribution haulage
 Striking, enhanced exterior design and further optimised aerodynamics
 A distinctive light signature, optional automatic high/low beam and cornering light1, LED daytime
running lamps and LED tail lamps
 MirrorCam2, optional optimised roof spoiler and cab side deflectors for further fuel savings
 Optional ExtraLine and GigaSpace upgrade equipment packages for an even more striking and
individual look

Reliability

 Reliability results from robust design and production at Mercedes-Benz with an emphasis on
durability
 Finely coordinated drivetrain configurations in particularly robust design offering extended service
lives
 Application specific axles as well as frame, chassis, suspension and brake components
 Application Information Centre in Wörth with around 180 practical industry-specific solutions
 Mercedes-Benz Custom Tailored Trucks for tailored body building
 Long maintenance intervals and service-oriented design for lower repair and maintenance costs
 Mercedes-Benz GenuineParts for reliability and value retention as well as Genuine Remanufactured
Parts as a cost-effective alternative

Interiors

 High-quality, attractive interior design with distinct separation of workplace and living area
 New interior light concept for optimum illumination of the cab
 LED ambient lighting and LED ambient driving and living lighting for a particularly warm and snug
light mood and better orientation during breaks or night-time driving
 StyleLine and TrendLine interior concepts to individualise the interior and exterior
 The newly designed workplace with Multimedia Cockpit1, multifunction steering wheel featuring
Touch Control Buttons2, MirrorCam3 and electronic parking brake provides for enhanced driving
comfort, ergonomics and ease of operation.
 Active Drive Assist is optionally available for certain Actros models to actively relieve the driver's
workload and enhance driving safety
  Simple handling and operation of the most diverse vehicle and body functions via the secondary
Multi-Touch-Display2
 Mercedes-Benz Truck Navigation4,2 with Traffic Sign Assist, dynamic route guidance and Live
Traffic Information
 High-quality, attractive interior design with distinct separation of workplace and living area
 New interior light concept for optimum illumination of the cab
 LED ambient lighting and LED ambient driving and living lighting for a particularly warm and snug
light mood and better orientation during breaks or night-time driving
 StyleLine and TrendLine interior concepts to individualise the interior and exterior
 Vast range of stowage facilities
 Stowage capacity of up to 332 l above windscreen
 Stowage compartments beneath the bed with a capacity of up to 558 l
 Optional refrigerator with a capacity of up to 36 l
 Optional folding table integrated into the dash support on the co-driver's side
 SoloStar Concept optionally available for outstanding living comfort
 Comfortable beds measuring up to 2200 mm in length and 750 mm in width
 Upper comfort bed with level control and a width of 750 mm2,1
 Upper comfort bed optionally available with a width of 600 mm
 7-zone comfort mattress, optionally PremiumComfort mattress

Savings

Sophisticated aerodynamics.
We have further improved the aerodynamics of the Actros to achieve an extremely low level of drag and
even lower fuel consumption: the new MirrorCam cuts fuel consumption by up to 1.5% as standard, for
example.

The Actros continues to underline its leading role: in over 2000 Fuel Challenges it has won more than 90% –
with a consumption advantage of around 10%. But that’s not all: in future we will continue to work on
lowering consumption – further reducing total costs in the process.

The new Actros now boasts additional fuel savings of up to 3% on the motorway and up to 5% on A and B
roads. This results from further optimisation of the drivetrain and aerodynamics, for example, and from
enhanced Predictive Powertrain Control, which is now also able to contribute to fuel savings on A and

The system integrates a driving style optimised for the route topography into the operation of the automatic
transmission and, in conjunction with the precisely coordinated shift strategy, allows fuel savings of up to
5% to be achieved. The new extended functions of Predictive Powertrain Control now enable use of the
system's benefits on A and B roads, too. In addition to the satellite-based positioning system and precise 3D
maps, Predictive Powertrain Control also uses the Traffic Sign Assist feature.

Fleetboard Performance Analysis supports and monitors your drivers to adopt a fuel-saving driving style that
reduces wear at the same time. To this end, the telematics system records and analyses technical data from
the truck. In addition to this, Fleetboard has exclusive access to data, allowing you to monitor the maximised
use of the truck technologies, for example how often the Predictive Powertrain Control system is being used.
All this information is continuously analysed and the driving style assessed which results in a corresponding
grade being awarded. This enables an objective assessment of the driving style allowing training to be
tailored to the individual driver's results. All in all, up to 15% fuel savings are possible as a result.

Value model

Average life time of trucks in EU: 11,7 years

Both the trucks weight more than 7,5 tons so the average price for fuel is 0,975€/liter (in Italy) (diesel)

Average consumption in EU 33L/100km

Average distance per truck every year: 135000 km

Average exp in fuel per year = 43500 €

Average consumption Volvo : 24L/100km  0,24L/km

Average consumption Mercedes: 20L/km

Fuel Savings:

VOLVO FH16

Average consumption in a year = 0,24 L x 135000km = 32400 km

Tot Exp= 32400km x 0,975€ = 31590 €

Savings = 43500€ - 31590 € = 11910 €

Oil change savings

Assuming that the life time of a Truck is 10 years, Volvo FH16 allows to change the oil every 100000km,
the average distance per year is 135000km, so in 10 years the oil would be changed= (135000x10)/10000=13
times.

In normal conditions, with regulars trukcs, the oil is usually changed every 70000 km, in 10 years the oil
would be changed = (135000 x 10)/ 70= 19

The average price for changing the oil is 100€

Tot exp for oil with Volvo FH16: 100x13= 1300€

Tot exp with regular truck: 100x19= 1900€

Savings= 600€
MERCEDES ACTROS
Average consumption in a year = 0,2 x 135000km = 27000km
Tot exp = 27000km x 0,975€ = 26325 €
Savings= 43500€ - 26325 €= 17175€

Value Model: Quantified Value Elements

(A)Selected (B)BASE*:Merce Savings-

Value Elements Offer: Volvo des Actros (A-B)
FH16
Label value element Specify Specify monetary
Value
and give a short monetary worth worth of the value
Dimensions
description against of the value element for BASE
each value element element for offer

Economic Benefits
Fuel savings 11910€ 17175€ (5265€)
Oil change savings 600€ 0€ 600€
(4665)
Value in Use (X)
Price Differential (Y) 160000-160000
= 0€

Net Value in use (4665)

Value Model: Value placeholders


Remarks: (A) Selected
Value Elements
Offer:Volvo FH16
Label value element Describe relative advantage or disadvantage w.r.t each value
Value and give a short placeholder
Dimensions description against
each value element
Economic Benefits
Fleet management Dynafleet: saves time
analysing vehicle and driver
data, reduce admin time by
automatically downloading
tachograph data, It prevents
costly misunderstanding,
provides the company with a
personal coach who helps cut
fuel consumption
Technical benefits
Engine D13C460 (338 kW)(euro 6)
6 6
Engine Cylinders
Displacement 12.8 dm³
Max power 460 hp
Transmission automatic
Gearbox 12 speed
Fuel tank capacity 150 to 900 Litres
Cab variants 4 17
Colors 650
Life-friendly cab Sleeper panel, tv, drinkable
water, sheltering cab, sound
package, voice activation,
navigation system, filters to
purify the air, class-leading
seats, skylight
Service benefits
Genuine Volvo Parts and
Parts and accessories Accessories are designed for
ultimate reliability, durability
and performance
Maximize your truck uptime
with Genuine Volvo Service
Vehicle care and Volvo Service Contracts
Remarks: (B)
BASE*:Mercedes Actros
Fleetboard
helps to optimally react to the
current situation and quickly
make the right decisions on:
Optimised vehicle usage, Lower
fuel consumption, Increased
vehicle availability
OM 473 (euro 6)
15,6 dm³
517 hp
automatic
12 speed
Flexible combinations (max 880
Litres)
4
Led ambient lighting, active
drive assist, vast range of
stowage facilities, folding table,
comfort bed, refrigeretor
Mercedes Benz genuine parts
and accessories
Mercedes Benz Service and
Mercedes Benz service-24h
provide assistance right around
the clock
 Driver development trainings /

Driver support
Yes Yes

Financial support
no yes

End-of-life vehicle,

battery recycling
Social benefits
.
airflow package /
Eco-friendly reduces CO2 emissions

CONCLUSIONS
The two offers are very similar, the trucks seems interchangeable, the price is the same also the benefits are
almost the same. The quantified value sees Mercedes Actros in advantage of 4665€, considered the high
price of purchase in not really relevant. The technical specifications of the products are close to each other
but the Mercedes Actros is slightly more powerful. They both offer a comfortable driving experience, with a
life-friendly cab with a lot of comforts. I think Volvo should take in consideration the fact that Mercedes is
that close to them and the better understanding of value in monetary terms to design their marketing strategy
and try to leverage its renowned reputation of “safest vehicle” in the word.
Mercedes and Volvo are premium products in this category because there are many competitors that offers
cheaper prices in the market. Volvo has a market share of 11,5% in the market of industrial vehicles in Italy
(2018), decreased from the 2017 (12,2%), while Mercedes has a market share of 11,3%. The market is stable
and not growing, the two competitors are on the same level, Volvo should definitely find a remarkable point
of difference to stand upon Mercedes.

Delivering Value
Q. Describe the process of delivering value in the selected firm or the business market at large with reference
to a selected offering.

o The Volvo Group’s products are sold and distributed through wholly-owned and independent
dealerships.
o More than 800,000 Volvo Group vehicles are connected via different telematics solutions.
o During 2018, the service business represented approximately 20% of the Volvo Group’s net sales.
o Financial Services provided financing solutions for 24% of Group products in the markets where
financing is offered.
o 90% of all distribution centres are certified with ISO 14001.
 o Environmental product information, based on life cycle assessment, are available for all the
products.

Sales and service points Construction Equipment

Trucks North America 620 North America 230
South America 210 South America 90
Europe 1450 Europe 480
South Africa 60 Africa & Oceania 120
India 440 Asia 340
China 960 China 290
Japan 210
Australia 80

One of their strategic priorities is to establish brand-specific sales operations with a focus on retail excellence
and a growing service business. The brand organizations within the Volvo Group support customers via
efficient dealer workshops, and through convenient service and maintenance agreements. with their service
contracts and connected solutions, customers know when their vehicle or machine is due for service and
what the cost will be for maintenance and repairs. They work together with their retail organization through
continuous improvement and dealer development programs to ensure their customers always get the best
possible service.
The sales staff are well equipped to offer tailored solutions to maximize productivity and uptime for the
customers. Connected solutions help the customers to lower costs through fleet optimization programs and
driver support systems. During 2018 this was demonstrated with the launch of Volvo Connect, a customer
portal that offers a single interface for digital services and functions. In Sweden, Volvo Trucks launched a
tire management service that measures tire preassure and temperature in real time. Volvo Construction
Equipment (Volvo CE) expanded its range of intelligent machine control systems, Volvo Assist, for their
Volvo Co-Pilot platform. Volvo Financial Services also expanded their offer with more user-friendly and
emerging payments solutions.

They have processes in place with the aim to ensure that all the sales deals are compliant with applicable
laws and regulations, including applicable export control regimes. In their responsible sales process, they
carry out screenings of sales deals covering human rights, environmental factors and business ethics. Volvo
Group’s responsible sales process includes identification of risks using an online database and research tool,
description and assessment of identified risks, escalation procedures to dedicated committees, mitigation
actions such as engagement with customers and a customized risk matrix. They consider country risk levels,
customer segments and potential end-use during the screening of sales deals. The business areas are
responsible for screening sales deals within the scope of the group’s responsible sales process in their
organizations with support from Group functions. Screened sales deals with identified risks are typically
escalated within the respective business areas or to Group-level functions for further consideration and
action. In many of the cases, they discuss and engage with the respective customers in order to clarify and
mitigate identified issues.
For Volvo Group it is key to maintain a high level of skilled service technicians. There are several programs
within the Group to acknowledge and ensure top quality among this important workforce. The Volvo Trucks
and Volvo Buses initiative, VISTA, is the world’s largest competence development competition for service
market personnel. For workshops, these competitions are an effective way of motivating and inspiring
employees, and improving skills and knowledge of workshop personnel, which lead to improved customer
service and increased customer satisfaction.
The product offering selected for this project is Volvo FH16, following is our customer segmentation:
Customer segmentation:
Volvo FH16 is a high-power truck that is generally used for transportation of a large variety of things such as
vehicles, minerals, raw materials etc. over long distances. Based on the features of the VH16 as described
above, the four potential targets are:
1. Distribution companies
2. Mining companies
3. Construction companies
4. Long-haulage companies

We have selected long-haulage as the primary target segment for the Volvo FH16. Haulage is the business of
transporting goods such as ore, coal, supplies and waste which is also called cartage or drayage.
The buying process include consideration of factors such as private economic costs, vehicle purchase price,
maintenance costs and fuel costs, nonmonetary costs, aversion to new and uncertain technologies, lower
availability of fuel infrastructure and incentives or subsidies. The utility of each vehicle type is estimated for
different truck purchase decision-makers.
Key Decision makers:
 CEO
 CFO
 Administration
Key influencers:

 Drivers
 Financiers
 Mechanics
Market share:
In the first quarter of 2019, the European market size for heavy duty trucks was considered to be around
400,000 trucks. Of this, Volvo was able to gain a market share of 15.3% (58,594 trucks) by serving the long-
hauling companies such as Jeffery’s Transport. This marks a reduction from last year, when the market share
was around 17%.
Similarly, the market share for Volvo heavy trucks business is around 9% in North America, 4% in South
America, 21% in Brazil and 23% in Asia.
We suggest increasing Volvo Value by adding value placeholders, in particular the company should allow
the battery recycling at the end of the trucks’ life, this could let the company reach his BASE (Mercedes
Actros) and increase his market share.
Q.How can the process of gaining new businesses be improved? What are the current challenges?

The process of gaining new businesses can be slowed down by the intense competition, continued
consolidation in the industry is expected to create fewer but stronger competitors. The major global
competitors are Daimler, Traton (Scania, MAN and Navistar) and Paccar (Kenworth, DAF and Peterbilt).
There are also strong local brands, for example in China, India and Russia, active in their domestic markets,
which are expected to increase their presence in other parts of the world. Further, overcapacity within the
industry can occur if there is a lack of demand. These trends in the industry may impact the Volvo Group’s
sales and potentially lead to increased price pressure or lost market shares. Proactive risk management is
important to anticipate changes in the competitive landscape and to protect the market positions of the Volvo
Group’s brands. Given the width of brands within the Group, it is important to utilize synergies while at the
same time empower the Business Areas to take responsibility for their business and offers. Continuous focus
on product and service development is an important mitigation work in order to keep the Group’s market
position and avoid a decrease in sales.
The current challenge that Volvo is facing, is adherence of new emissions regulations in their products.
Emissions legislations vary for different regions. In some regions the implementation of stricter rules is
hindered by insufficient availability of good fuel quality and low sulphur content. In many parts of the world
the emissions legislations are based on EU and US legislation. A common focus for regulators going
forward is the actual engine performance in use instead of a generic engine model in a test cell. These
regulations don’t allow Volvo to standardise the engine model which affects the distribution in the process of
delivering value and it also increases the costs for the company.
Q. How can customer share/ customer loyalty be improved by focusing on delivering superior value?
A. The top management at Volvo regularly spends time with customers operating different types of
businesses across various markets across the globe. Volvo constantly thinks about how it can in its capacity
as a partner, can support them in their daily activities, contributing to their profitability and peace of mind.
The discussions with customers are generally about new opportunities, enabled by new technologies and
fuelled by new ideas. Volvo treats its long-term relationship with its customers as a great asset, not only for
succeeding today, but also for developing and co-creating solutions for tomorrow.
In this path, Volvo set a new direction for the Group and implemented a brand-based organization for truck
business, with each brand being responsible for its own commercial-development and profitability. This was
a huge success and Volvo plans on implementing decentralization throughout the Group. Volvo wants to
empower those that are closest to the customers, make the decisions and be accountable for the result. This
makes the individuals and team take responsibility and drive forward with customer’s best interest in mind.
Efforts are being made to increase speed in decision-making and collaborating internally faster.
Demand for Volvo’s truck has seen a steady increase year-on-year. Volvo did this by introducing new
product ranges from Volvo Trucks and Mack Trucks. The Mack trucks was quite popular among the
customers, with Mack Anthem being recognized as a means for attracting and retaining the best drivers.
Even with a stressed supply chain, Volvo managed to deliver 42% more trucks Year on Year than their
competitors.
Volvo’s products and services enable its customers to build roads, move goods, transport people to work and
do multiple things that make society work and modern life possible. With increasing population, the demand
increases, which further requires sustainable solutions to the problems presented. For the Volvo Group,
sustainability encompasses economic, environmental and social dimensions. Thus, Volvo is a long-time
supporter of the UN Global Compact, which is a call to companies to align strategies and operations with
universal principles on human rights, labor, environment and anti-corruption, and take actions that advance
societal goals.
Efficient and sustainable transport is a precondition for economic growth, alleviating poverty and combating
climate change. Volvo believes that the shift towards sustainable transport provides great opportunities for
our customers, for society and for the Volvo Group. To seize these opportunities, Volvo works with
customers and strategic partners in the ecosystem around new technologies. By this thinking, Volvo has
unveiled two electric trucks: the 16-ton Volvo FL Electric and the Volvo FE Electric, designed for heavier
city distribution and refuse transport operations. Further, Mack Trucks in the future are expected to have a
fully electric refuse truck in operation.
There is a general push forward within automation. UD Trucks participated in the world’s first public road
demonstration of multi-brand truck platooning. This process can provide considerable savings for Volvo’s
customers by reducing fuel consumption.
Connectivity is another avenue that provides new ways to provide services that deepen the relationship with
customers. Volvo released a Mack Connect suite of services, which integrates intelligent software, predictive
analytics and driver-assist technologies to help customers boost productivity and profitability. The suite
helps cut diagnostic times by more than 70% and repair times by more than 20%. This way, Volvo combines
connectivity, electro mobility and automation to design completely new solutions.
For the future, Volvo Trucks has presented Vera – a future transport vehicle, which is autonomous, fully
electric and connected. It contributes to more efficient, safer and cleaner transportation in confined and hub-
to-hub repetitive transport flows, which is being developed together with customers and business partners.

Q. What are the best practices in the Indian / Global industry in understanding and delivering value? Give
examples.

A. Relevant companies in India:

1. Ashok Leyland

Ashok Leyland is focused on the manufacturing of commercial vehicles. The company primarily manufactures
trucks, buses, special application vehicles, and engines. It has eight manufacturing plants in India including
the principal unit at Ennore near Chennai, at Ambattur, three plants at Hosur, one plant at Pantnagar, and
assembly plants at Alwar and
Bhandara. It also has facilities in the UK, Czech Republic, and the UAE. Ashok Leyland also exports its
products to Bangladesh, Sri Lanka, Mauritius, and the Middle East and Africa.
The company's product range spans from 18-80 seater buses, 7.5 to 49 ton gross vehicle weight goods vehicles,
as well as light commercial vehicles, and military defense vehicles. Additionally, it offers diesel engines for
industrial, marine, and generator applications.
Ashok Leyland's range of buses includes CNG (compressed natural gas), double decker, and vestibule buses.
Its trucks include long haul, distribution, construction and mining trucks. The company's light commercial
vehicles include small trucks under the 7.5-ton range.
Through the defense vehicle segment, the company is engaged in the design, development and manufacture of
defense vehicles and offers end-to-end solutions to meet the logistic requirements of the armed forces.
In addition, under the brand name LEYPOWER, Ashok Leyland offers complete power solutions by supplying
engines for a variety of applications including generator sets, marine applications, earth-moving equipment,
compressors, cranes and combine harvesters.
The company has joint ventures with Nissan Motors, the John Deere Construction & Forestry Company, and
Continental. It has considerable investments in Albonair, Ashok Leyland Defense Systems Limited (ALDS),
Ashley Alteams India Limited (AAIL), AVIA Ashok Leyland Motors (AALM), and Defiance Technologies
among other companies.

2. Eicher Motors Limited

Eicher Motors Limited (EML) is an Indian manufacturer of trucks and buses, motorcycles, and automotive
gears and components. The company has operations in India, the US, China and Sri Lanka. The company
operates its business through VE Commercial Vehicles Limited (VECV) and Royal Enfield.
VECV is a 50:50 joint venture between the Volvo Group (Volvo) and EML. It is involved in the manufacture
of a range of commercial vehicles (CVs) and components, and engineering design activities. It is also involved
in the sales and distribution of Volvo trucks. VECV operates its business through five verticals, including
Eicher Trucks and Buses (ETB), Volvo Trucks India (VTI), Eicher Engineering Components (EEC), Eicher
Engineering Solutions (EES), and VE
Powertrain.
ETB is a manufacturer of a range of commercial vehicles (CVs) and components under four categories: trucks,
buses, special application vehicles, and non-automotive engines. Its truck category includes haulage (5 T-
31T), tipper (8T to 25T), articulated tractor (40 T) and special application trucks. Its buses category offers
tourist buses, school, staff, city and route permit buses, and bus chassis under the Skyline and Starline brands.
The company sells its vehicles in South Asian markets that include Bangladesh, Nepal and Sri Lanka.
VTI offers Volvo branded trucks and related parts and components in India. VTI also provides servicing,
maintenance services through a network of Volvo’s service, and parts support points.
VE Powertrain operates a facility in Pithampur, Madhya Pradesh. This facility provides the medium-duty
automotive for five- and eight-liter engines for Volvo. The Euro 6-compliant diesel engines for Volvo Europe
are adapted to Euro 3 and 4 engine technologies to meet VECV requirements. These Euro 3 and Euro 4 engines
cater to the requirements of VECV and other emerging and Asian country requirements.
EML's other subsidiaries include Eicher Engineering Solutions, Inc.; Hoff Auto Design (Shanghai) Co. Ltd.;
Hoff Automotive Design (Beijing) Co. Ltd; VECV Lanka (Private) Limited; and Eicher Polaris Private
Limited. Eicher Polaris Private Limited is a 50:50 strategic joint venture established between the company and
Polaris Industries, to design, develop, manufacture and sell a range of personal vehicles.

3. Mahindra & Mahindra Limited

Mahindra & Mahindra (M&M) is an Indian manufacturer and marketer of utility vehicles, and tractors. It also
provides farm equipment, steel trading and processing, financial, infrastructure development, hospitality, and
information technology services. The group operates in Asia, the Americas, Europe, Middle East and Africa
and Australia.
The group primarily operates through nine segments including automotive, farm equipment, Systech, financial
services, IT services, steel trading and processing, infrastructure, hospitality, and other operations.
M&M's automotive segment comprises the sale of automobiles, spare parts and related services. The group
also manufactures and markets utility vehicles and light commercial vehicles including three-wheelers, The
company also produces a range of buses, light commercial vehicles and heavy trucks through its subsidiary
Mahindra Trucks and
Buses Limited.
It exports its automotive products to several regions including Europe, Africa, South America, South Asia and
the Middle East. M&M markets its vehicles under the Alfa, Bolero, Genio, Gio, Korando, Kyron, Loadking,
Logan, Maxximo, REVA Electric Cars, Rexton II, Rodius, Scorpio, Thar, Verito, XUV 500, Xylo and e2o
brand names.
M&M's financial services segment comprises of services relating to financing, leasing and hire purchase of
automobiles and tractors. It provides financing for utility vehicles, tractors and cars in the rural and semi-urban
sectors. The group offers direct insurance broking services both in the life and non-life insurance segments
with a focus on retail and commercial lines of businesses.
The group's other operations segment comprises logistics, after-market, two wheelers, and investment. The
after-market sector focuses on the pre-owned vehicles, servicing, spares and the financial instruments and
exchange platforms. The group's two-wheeler sector is engaged in designing and marketing a range of scooters
and motorcycles for the Indian and global markets.

4. Tata Motors Limited

Tata Motors is an Indian automobile manufacturer with a portfolio comprising of light, medium and heavy
commercial vehicles, utility vehicles, and passenger cars. It has automotive operations in India, South Korea,
South Africa, Thailand, Bangladesh, Singapore, Spain, and the UK. The company is a part of the Tata Group,
one of the leading business groups in India.
Tata Motors' business operations can be distributed into three business divisions including: Jaguar Land Rover;
Tata and other branded vehicles; and other operations.
The Jaguar Land Rover was acquired from Ford Motor in 2008. The segment designs, manufactures, and sells
Jaguar luxury performance cars and Land Rover premium all-terrain vehicles (ATVs).
The Jaguar Land Rover business operates three automotive manufacturing facilities in the UK at Solihull,
Castle Bromwich, and Halewood. The segment also has two product development facilities in the UK at
Gaydon and Whitley.
The 'Tata and other branded vehicles' division a wide range of automotive products, including passenger cars,
utility vehicles, light commercial vehicles, and medium and heavy commercial vehicles. It also offers related
parts, and financing services.
The light commercial vehicles (LCV) offered by the company include pickup trucks, trucks and buses with a
gross vehicle weight (GVW) of between 1.2 ton and 7.5 tons. This also includes the Ace mini-truck with a
0.75 ton payload in different fuel options, Super Ace with a one ton payload, Ace Zip with a 0.6 ton payload,
and the Magic and Magic Iris (both passenger variants for commercial transportation developed on the Ace
platform), and the Winger.
Tata Motors manufactures a variety of medium and heavy commercial vehicles (M&HCV) including trucks,
tractors, buses, tippers, and multi-axled vehicles with a GVW of between eight and 49 tons. In addition,
through Tata Daewoo Commercial Vehicle (TDCV), the company manufactures a range of high horsepower
trucks ranging from 215 to 560 horsepower, including dump trucks, tractor-trailers, mixers and cargo vehicles.
The company operates six automotive manufacturing facilities located in Jamshedpur (Jharkhand), Pune
(Maharashtra), Lucknow (Uttar Pradesh), Pantnagar (Uttarakhand), Dharwad (Karnataka) and Sanand
(Gujarat), in India. TDCV has a manufacturing facility in Gunsan, South Korea. Tata Motors (Thailand) has a
manufacturing facility in Samutprakarn province, Thailand. Tata Hispano Motors Carrocera has two
manufacturing units, one in Spain and another one in Morocco. TMSA, the company's joint venture with Tata
Africa Holdings, operates a manufacturing facility in Rosslyn, South Africa.
The company's wholly owned subsidiary, TML Distribution Company (TDCL), provides distribution and
logistics support for the company's products throughout India. Tata Technologies Limited subsidiary is
engaged in providing specialized engineering and design services, product lifecycle management and
product-centric IT services to global manufacturers. As of March 31, 2013, the company's operations
included 64 consolidated subsidiaries and 25 equity method

Q.Explain a few successful strategies relevant to the selected project topic in understanding and delivering
value employed by firms in the Indian/ global Industry

TATA Motors – Success Story

Tata Motors, leading CV player, led the growth in the M&HCV where it reclaimed over 50 per cent of sub-
segment segment's market share pie after three years in FY18. It last captured a 53 per cent market share of
M&HCV segment in FY’16. Tata Motors’ M&HCV sales increased by 17% in FY’19.
Within the segment, weathering the unstable regulatory and financial environment, the M&HCV segment
climbed a growth of 14.6 % in FY18-19, largely due to strong demand for tipper trucks from infrastructure
and mining sector. Only cargo segment slowed down while the tipper segment has grown very well on the
back of strong investment by the government in the infrastructure segment. Owing to this factor which affected
TATA Motors over the years since TATA Prima’s launch as heavy-duty rigid truck in 2010, TATA Motors
focused more on selling TATA Signa model which was modular innovation in commercial vehicle sector. It
provided the flexibility of either mounting the cargo on chassis or the tipper as per the convenience of the
buyer. Also, with the advent of Indian e-Commerce market which is expected to grow to US$ 200 billion by
2026 from US$ 38.5 billion in 2017, customers were looking for this option so that the truck can be used all
year round. With a reliable and proven power train, the new TATA Signa offers its customers better
productivity and lowest cost of operations, for a construction vehicle. Multiple options of aggregates
combinations and load bodies making the TATA Signa a versatile workhorse for various applications. To
communicate this to customers they prepared a value model.

Value Model
Value Elements TATA Signa TATA Prima
GVW 28000 Kg 25000 Kg
Axle Configuration 6x4 6x4
Engine  Cummins ISBe 5.9 CRDi  Cummins ISBe 6.7
 SCR Technology  SCR Technology

Power (Max.) 230 HP@2500 rpm 242 HP@2500 rpm

 Torque (Max.) 810 Nm@ 1000-1800 rpm 950 Nm@1200-1700 rpm
Transmission 9 speed manual (8F+1CR+1R) 9 speed manual (8F+1CR+1R)
Vehicle Configuration Cabin with Box body  Cabin with Box body

Load Body Options 16 Cu.M Box body 16 Cu.M Box body

Warranty  6 Years / 6000 Hrs on driveline 6 Years / 6000 Hrs on driveline

3 Years / 3000 Hrs on vehicle 3 Years / 3000 Hrs on vehicle

Service Interval 80000 Km (Engine Oil Change)  1500 Hrs (Oil change)

Additional FE Switch Multi Drive Mode: 

Heavy, Light

As we can see above the utility of TATA Signa Model which can be used both as cargo and tipper
outweighed the value that customers perceived of the Prima model. Increased service interval and an inbuilt
telematics system, by TATA FLEETMAN, the new SIGNA range empowers fleet operator with a more
connected experience, to better manage their transport business through optimum driver, vehicle and fuel
management. This led to the increase in sale of Signa Model in the following years.

Ashok Leyland – Success Story

The market was dominated by TATA Motors in south with 50%+ market share during FY 10-11. Bharat
Benz which arrived in the M&HCV market in 2012, became market leader in 4 years by FY16. Customer’s
need was shifting from economy to value in products. Ashok Leyland focused on delivering value through
tipper category of M&HCV segment. Firstly, they focused on Sales Funnel Management by reviewing each
step involved in the sales funnel. Strengthening the sales ecosystem by providing incentives for bringing
more leads. They created a database of the customers using their product and of those customers as well who
don’t use their product through conducting marketing campaigns, roadshow, exchange mela etc. They were
able to add 21% new customer to their existing database.
Secondly, they figured out the gaps in system through customer engagement. 40% of leads were not
followed-up thus losing that number of potential customers. Customer meets and plant visits helped them in
finding the stakeholders (Drivers, Financiers, Mechanics etc.) who influences customer’s purchase decisions.
65% of the purchase decision were emotionally motivated. Some of the customers finalize the model before
prospecting stage. Some of them would have bought a premium model if informed before sale. 60% of Sales
executives were not aware of which model to be pitched as they were confused. Ashok Leyland prioritized
on establishing product advantage by understanding value elements and creating value map.

Value Model
Value Elements Leyland Tipper
Technical Benefits 230hp CRS engine with 880 Nm torque

gradeability 48%

Throughput per vehicle Maximum

Product - BASE 25%

Uptime 10% higher

Maintenance Longer service Intervals

Finally, after analyzing and defining the value offered to customers. Ashok Leyland focused on creating
brand equity keeping customer retention and loyalty into consideration. They launched long term
relationship program such as collaborative selling wherein they build partnership with customers thus
creating a “win-win” situation for both the parties. It further included mass-customization of solution based
on customer profile and requirement. Emphasis on connecting marketing, sales, service & spares team to
provide a unified solution and providing training to sales executive become solutions consultant helped them
in increasing customers advocacy. They also added the service of delivery to home. By these processes
Ashok Leyland was able to increase its market share by 10% in tipper segment. Their gross margin increased
by 20% and due to reduced product line, their working capital days came down to 6 days from 27 days.

Recommendations
BS VI norms (in line with Euro VI) which is to be launched on 1st April 2020 will render all BS IV compliant
tippers scrape and no new registration can be done for these vehicles after that. Volvo already is in
advantageous position as it unveiled the country’s first commercial vehicle that is compliant with BS-VI
emission norms, in June 2019. The company has been making Euro-VI compliant engines for its partner Volvo
for six years and was able to leverage this experience to make BS-VI-compliant vehicles for India. They have
all the experience and knowledge of the challenges and issues that emerge during the implementation of these
engines. They can further leverage this opportunity by launching a long-term relationship program where in
customers having BS IV complaint vehicles can get it exchanged to new BS VI compliant vehicles by paying
extra cost incurred after calculating the depreciation on the old vehicles. Also, if they are given the flexibility
to either pay the amount one time or in EMIs and the aftermarket services on the old vehicle are carried forward
with the existing services of new vehicle, they would prefer Volvo as it would be one stop solution for them.
For this plan to implement, Volvo would need to communicate it as a value element in advertisements, train
the sales executive to pitch the same to customers such as fleet owners. This would incur extra cost in
advertising and training.

BS VI norms also has a challenge which involves a lot of local learning between both OEMs and suppliers in
adopting new technologies for Indian conditions. Local OEMs face the challenge of defining their product
architecture and finalizing their strategy. Most of the OEMs have started executing their plans and are presently
quickening post BS-IV rollout. Substantial investments in R&D for technology and manufacturing are
expected by the company for meeting the new emission regulations. In any case, quality prerequisites will be
more stringent with tougher laws and will have to form the core of the company’s planning strategy in order
to meet them. If Volvo collaborates with suppliers in finalizing the concepts and the early engagement of
suppliers will be mutually beneficial for both parties. Developing a local supplier base for providing the
components for making the after-market services cost effective would provide another opportunity to increase
sales with profitability.
Since the customers’ preferences are changing in the same direction as government’s regulations about
environment and pollution reduction, Volvo should focus on new technologies. New technologies enabling
autonomous, electric and connected vehicles would deeply impact the transport, logistics and construction
industries – among others. The effect will be particularly strong at the convergence of these technologies as
it affects vehicles, assets as well as infrastructures. The lack of broadly accepted technological choices and
standards poses significant risks for the Volvo Group and other players in these industries, as they are
required to choose relevant technologies, time their introduction wisely, while respecting the wide spread in
readiness level among markets and segments across the globe. A further level of risk is related to the need to
evolve from a vehicle/product focus towards an ecosystem-driven approach, where vehicles and
infrastructures are to be developed and implemented simultaneously.
Together with customers and suppliers, Volvo Group should explore new technologies looking at
possibilities, desired features, and levels of quality, cost, safety and environmental impact. Furthermore,
Volvo Group should broad its involvement into ecosystem-related solutions and should work much closer to
customers, suppliers and regulators to understand the pace of development in society.