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Contents
Acknowledgement................................................................................................................... 3
Executive Summary........................................................................................................... 3
EPGP07 - Indian Institute of Management - Kozhikode
Acknowledgement
EPGP07 - Indian Institute of Management - Kozhikode
Executive Summary
Problem Statement
Volvo Buses see a dip in market demand for their luxury buses in recent years, deliveries
during 2012-2013 were only 237 buses from R&D center located in Bangalore R&D
center 28% lower than the previous year. Order intake for the next 2014 Q1 also has
witnessed a declined trend for intercity buses by 16%.
Situation Analysis
Redefined efficient bus travel with high vehicle uptime, ride comfort, transport
economy, a flexible and versatile design that offers reliable, safe and profitable
transport solutions.
It translates into increased revenues and improved transport economy and for
the passengers it means an even more comfortable ride on long distance
travel.
Market share of 82 per cent in premium coaches.
EPGP07 - Indian Institute of Management - Kozhikode
Increase
Increase
Increase
Increase
(1,496).
Volvo 9400 XL
76% Market
share
Monopoly in
Inter-City
Market
segment
20 coaches
from 2001 to
5000 in Dec-11
Tata Divo
Launched in
Dec 2011.
150-200
units
annually.
Scania
MetroLink
Scania is
also a
Swedish
manufactur
er and is a
tough
competitor
for Volvo in
European
market.
Entered
Indian
market in
Increase
the
production
and
promotion.
Provide
better
services
and comfort
Fight for the
remaining
competition
and
gradually
compete
with Volvo.
Business Strategy
and Marketing
Objectives- 201415
Increase
localization to
reduce cost,
source engines
from its
Pithampur
plant
Increase the
city operations
to 15.
Increase the
number of
trained drivers
to 25000.
Increase the
presence of
buses to
5000+
Increase
their
production
and meet
the target
of selling
150-200
buses
annually.
Tata Motors
will also
launch
multi-axle
Divo in
fiscal 2014.
Promotion
and fight
for market
place.
Increase
their
production.
Can use
the
advantage
to compete
with Volvo
being a
successful
competitor
to it in
European
market.
Target of
1,000
selling
buses per
year in the
Indian
market
within the
next five
years and
employee
about 800
people at
this facility.
Current
Marketing
Strategy
Target Segment(s)
EPGP07 - Indian Institute of Management - Kozhikode
Luxury Segment
Luxury Segment
Luxury Segment
Volvo 9400 XL
Volvo 9400
Volvo 8400 (Low
Floor)
Volvo introduced
9400XL as a brand
extension strategy
Introducing a 14 Ft
bus in India.
Tata Divo
Tata Starbus Ultra
Tata Introduced
DIVO as a product
line extension
strategy
Scania Metrolink
Scania Citywide
Promotions:
promotion mix,
spends (analyse
successful /not so
successful
campaigns for
insights)
It ran commercials in
film theatres.
Scania entered
into India market
with a JV with L&T
for Trucks. And
further extended
their product line
to enter the bus
segment in 2013.
Privided 2 buses
to KSRTC for a
trial run
PAN India
South India
Pricing Strategy
(brand extension,
variants and
pricing)
78 Lakhs
66 Lakhs
85 Lakhs
(approx.)
Future prospects of
High Growth
High Growth
Place: Channel
share
To expand its
presence in the
country, the
company has also
launched Volvo
9100 coach for
routes that cater
specially to tier-II
and -III cities.
Localization to
reduce the
manufacturing
cost
Pay per use
model/ leasing of
Buses
Plant capacity is
5000 units/year
as against the
current production
of 600 units/years
15% of the
aftermarket cost
goes as good will
and can be
optimized by
educating
customers
Potential
Potential
Increase
product
awareness by
Promotions
through
advertisements
Product
differentiatorlow cost as
their USP
Leveraging
long term
TRUST factor in
Indian market
for future
growth
Increase
product
awareness by
Promotions
through
advertisement
s
Product
differentiatorQuality
product, Brand
value
Free demo
buses to
increase brand
awareness
While Volvo 9400 has in its rear a comparably smaller 9-litre 6-cylinders D9B diesel
motor that is Turbo-charged and Intercooled, with a build in retarder. The max output
values are 340 bhp of power and 1600 Nm of torque. It comes with a 6-speed mannual,
fully synchronised gearbox. The motor is Euro-III compliant as well. It is to be noted that
Volvo has not updated its engine offering for a fairly long time owing to its monopoly and
high sales. I don't think it can be that lethargic anymore!
Dynamics
The hydraulic power assisted steering system with a circulating ball-and-nut type
steering gear enables small turning circle (considering its length) for both the buses. The
9400 has a turning radius of 10.5 metres while the Metrolink has a little larger radius at
12.5 metres. Ground Clearance for both the coaches is 270 mm. Pneumatic (Compressed
Air) suspension is a standard features in all wheels with almost same configuration in
both 9400 and Metrolink.
The Metrolink has a speed limiter at 90 kmph, while the Volvo can touch a top speed of
100 kmph. Sophisticated suspension system with multi-axle configuration lends a
balanced center-of-gravity and superior high speed stability for the buses.
Safety
This class of luxury coaches are loaded with safety features, which are desperately
absent in every others buses on our roads. Of course you pay too much for these luxury
liners, but considering the instances of highway accidents by intercity buses and their
massive death tolls, we have to understand its importance. Because every buses carry
almost same amount of passengers, and even our modern low-cost Tata and AL buses
are capable of reaching a max speed of 100 kmph on open highways. So vulnerability is
indeed the same for every intercity buses.
Both the Metrolink and the Volvo 9400 enjoy disc brakes in all wheels, ABS and Electronic
Braking System, Electronic Stability Programme, Electronic stability programme, Hill
Hold, and seat belts. In addition, the Metrolink gets Traction Control and reversing
camera. Since both the coaches are built on a strong frame upon ladder-frame chassis,
roll-over protection is much better than a typical custom-built coaches. Radial tube-less
tyres in both the coaches ensure better road grip and stability.
Comfort
Unlike cars, these coaches comes with variety of optional packages. Buyers can choose
among accessories like curtains on windows, reading lights, gangway lights, LED
EPGP07 - Indian Institute of Management - Kozhikode
Neutral
Ok, I lied. It isn't a 'Swedish Clash' in true sense. In fact there is nothing like Swedish or
German or American! Every automobile of our times are "Global" is strict sense. Volvo is
now owned by Geely (a Chinese firm) and earlier by Ford. Scania now belongs to VW
group. But it's little exotic to use such phrases of nationalities and to exploit stereotypes
associated to them, and so media loves to do so. I'm too!
SWOT Analysis
EPGP07 - Indian Institute of Management - Kozhikode
From the above exhibit it is clear that the demand for luxury buses in India will
be 7479 units in 2015 -16. As Volvo is the market leader we could estimate
companys sales target to be 65% of the market demand. Hence the projected
volume should be 4681 Units.