Rank the element of passey’s strategy for Volvo in order to important. Could only have been dispensed with? How sustainable is Volvo luxury bus strategy? ILLUSTRATION 6.2Volvo's different Indian busesILLUSTRATIONVolvo has a strategy to seil buses at nearly four times the prevailingmarket price.The Indian bus market has long been dominated bytwo home players, subsidiaries of major Indian con- increasing life expectancy of buses from three to tenglomerates: Tata Motors and Ashok Leyland. The two years, and allowing bus operating companies to dis-companies made simple coaches on a design that pense with their own expensive maintenance work-had hardly changed for decades. On top of a basic shops. Free training was given to drivers, so theytruck chassis, the two companies bolted a rudi- drove more safely and took more care of their busesmentary coach body. Engines were a meagre 110-120 The company aadvertised the benefits of the buseshorse-power, and roared heartily as they hauled their direct to customers in cinemas, rather than simplyloads up the steep mountain roads of India. Mounted promoting them to the bus operators. To kick-start theat the front, the heat from the over-strained engines market, Volvo supplied about 20 subsidised trial unitswould pervade the whole bus. Air conditioning was to selected operators. Volvo trainees rode these buses.a matter of open windows, through which the dust alerting the company immediately when somethingand noise of the Indian roads would pour. SuspensionVolvo offered post-sale maintenance services,went wrong so Volvo could immediately send itswas old-fashioned, guaranteeing a shaky ride on engineers. Faster, smoother and more reliabie travelpot-holed roads. Bags were typically slung on the allowed the bus eperators to increase their tickettop of the bus, where they were easily soiled and at prices for the luxury Volvo buses by 35 per cent.high risk of theft. But at least the buses were cheap,selling to local bus companies at around Rs 1.2 m delighted with the new Volvo services. Speedier, more(e15,000; $21.000).In 1997, Swedish bus company Volvo decided to meetings and potentially to save the costs of over-enter the market, with buses priced at Rs 4 m, nearly night stays. Tata and Ashok Leyland both now pro-four times as much as local products. Akash Passey, duce their own luxury buses, with Mercedes and IsuzuVolvo's first Indian employee, commissioned a con- following Volvo into the market. None the less, thesuitancy company to evaluate prospects. The consul- phrase taking a Volvo' has become synonymous withtancy company recommended that Volvo should not choosing a luxury bus service in india, rather aseven try. Passey told the Financial Times "My response hoover came to refer to any kind of vacuum cleaner,was simple -I took the report and went to the nearestdustbin and threw it in.' Passey entered the market in tactory in Bangalore. It is Volvo's most efficient2001 with the high-priced luxury busesPassey used the time to develop a distinctive strat- 20-25 days. Annual capacity is 1,000 buses per year.egy. His basic product had superior features. Volvo's Soce Adated tom A Leaty, ve tsa let in indistandard engines were 240-250 hp and mounted at Financal Times 31 Apst 2009the back, ensuring a faster and quieter ride. Air con-ditioning was standard of course. The positioning ofthe engine and the specific bus design of the chassismeant a more roomy interior, plus storage for bagsinternally. But Passey realised this would not beenough. He commented to the Financial Times "Youhad to do a lot of things to break the way business isdone normally.Business people and the middle classes werecomfortable journeys aliowed them to arrive fresh forIn 2008, Volvo opened a new state-of-the-art busbus tactory worldwide, producing a fully built bus inQuestions1 Rank the elements of Passey's strategy forVolvo in order of importance. Could any havebeen dispensed with?2 How sustainable is Volvo's luxury busstrategy?

1. The ranking of the elements of the Passey's strategy in the order of the importance is as…

Answered: Rank the element of passey’s strategy…

Rank the element of passey’s strategy for Volvo in order to important. Could only have been dispensed with? How sustainable is Volvo luxury bus strategy?

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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