Question
O RI O IG 111 1 0096 3:49 PM https://docs.google.com/vie 2DD CHAPTER BUSINESS STRATEGY ILLUSTRATION 6.2 Volvo's different Indian buses alvo has a strategy to sell buses at neay four times the prevailing market pnice. The Indian bus market has long been dominated ty Vle oflered pos-sale maintenance services, twn home players' subsidianes at majof Indian con. increasing liteexpactancy of huses tram thre tote gomeratesi Tata Metors and Ashok Leyland. Thhe two years, and alowing bus cpenting companies to dis- companies made 5 mpi coches on ? des gn that pense with their own expensve mrtenance wors. had hardly changed tor decades. an top or a basic shcps. Free traing w?ven to cirters, so they truck chassis, the two companies belted a rudi drove mone safely and took moe care of their b.ses mentery cusch body. Ergines were a meegre 110-120 The compary advertised the benefits of the brses horse power, and roared heartily as they hauled their direct to custemers in cinemas, rather than smply laads up the sheep mountain mads of India. Mounted promoting them to the bus oparatos. To kick-start tha ?the tont, the heat from, the over-soainec engines market. Volvo supplied atout 20 subsidised trial units would pervade the whole bus. Ar conditioning was to selected operators Volve trainees rode these buses a matter of open windows, through which the dust alering the company immediately when sorething and ncise ot the Indian roads would pour. Suspansion went wmong so Voln could immediarely send its was old-1sshioned, sranteeir a shaky ride on engineers. Faster, smocther and more reliable travel pot-haled roeds Bags were typically slung cn the allowed the bus operators to incresse their icket top or the bus, where they were esy solled and at prices for the lxury ol busas by 35 per cent. high risk of theft. But at least the buses were cheap, Business people and the middle classes were selli? los bus companies at round Rs 1.2 m deli htee with the new Volvo services. Speedier, more I15,000 $21,030. comfortable journes a amive fresh for In 1997, Smadish bs compary Vcln decidad to mearings and potentially to se the costs of over enter the market.with buses priced at Rs m, nerly night stays, Tata and Ashok Leyland both nem pro four times as much?ocal products. Akash Passey, duce their own luxury buse5, wtn Mercedes and Isuzu ovo's tirst Indian emplayne, commissianat a contollawig velva into the make None the ess, the sultancy company to ealuate pospects. The cul phrase taking a Valbo has become synongmous with tancy compsny recommended thet Volvo shculd not choesing a luaury bus service in Indis, rather as even try. Passey told the Fmancial Vimes: 'My resporee 'hower came to refer to any kind oft vacuum clesner was simple I took the repert and went to thanearstn 2008, Vavo opened a naw state-or-the-art bus dustbin and Uhrew it in. Passey ente ed the mereet in factory in Ba uaore. It is Voho's most eflicient 2001 with the hish-priced luxury buses bus factory worldwide, producng ? fully bult bus n Passcy used the time to deuclop a dstinctivtat 0-2 days. Annual capacity s1,0O buses per yesar eey. His basic product had superior leatures. Volvo's Sann Msad tan? Lery, has thes lead in hdw standard engines were 240 250 hp and mounted at Fn 31 2009 the bacs, ensuring a faster and quieter ride. Air con ditioning was standard of coins. Th?? positioning at Questions the engine and the specific bus sgnfchssis 1 Rnk theelments of Passey's strateg for msant a more roomy interiar, plus storsge fer bags intemally. Bu Pcsey realsnd this would not be ercugh. He commentec to the Finanelai Tmes:u 2 hsd tu do a lot of things to breek the way business is done nermally Vovo in arder ct impartance. Could any ha been dispensed with? How sussnable is Volve's luxury bus
Explanation / Answer
1. The ranking of the elements of teh straetgy would be as follows: The differentiated product ( with better interior); targetting the cutomers customer by creating the perception of the luxury travel and offering the same ; training to drivers and additional maintainence services; phase wise launch with the target of the initial 20 buse servive providers. Each element of the strategy palyed an important role in acheiving the objective, though the last trial units could have been done away with but to build the credibility with the custoemr, it becomes critical to capture the big plpayers and offers pecial service to them.
2. The strategy is sustainable and scalable as well. It has a clearly defined TG and the focus on establishing the right ecosystem by focussing oon training anf employement opportunities only adds on to the portfolio for offering additional services.
