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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?

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
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
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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 6.2 Volvo's different Indian buses ILLUSTRATION Volvo has a strategy to seil buses at nearly four times the prevailing market price. The Indian bus market has long been dominated by two home players, subsidiaries of major Indian con- increasing life expectancy of buses from three to ten glomerates: 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 they truck chassis, the two companies bolted a rudi- drove more safely and took more care of their buses mentary coach body. Engines were a meagre 110-120 The company aadvertised the benefits of the buses horse-power, and roared heartily as they hauled their direct to customers in cinemas, rather than simply loads up the steep mountain roads of India. Mounted promoting them to the bus operators. To kick-start the at the front, the heat from the over-strained engines market, Volvo supplied about 20 subsidised trial units would 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 something and noise of the Indian roads would pour. Suspension Volvo offered post-sale maintenance services, went wrong so Volvo could immediately send its was old-fashioned, guaranteeing a shaky ride on engineers. Faster, smoother and more reliabie travel pot-holed roads. Bags were typically slung on the allowed the bus eperators to increase their ticket top 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 Isuzu Volvo's first Indian employee, commissioned a con- following Volvo into the market. None the less, the suitancy company to evaluate prospects. The consul- phrase taking a Volvo' has become synonymous with tancy company recommended that Volvo should not choosing a luxury bus service in india, rather as even 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 nearest dustbin and threw it in.' Passey entered the market in tactory in Bangalore. It is Volvo's most efficient 2001 with the high-priced luxury buses Passey 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 indi standard engines were 240-250 hp and mounted at Financal Times 31 Apst 2009 the back, ensuring a faster and quieter ride. Air con- ditioning was standard of course. The positioning of the engine and the specific bus design of the chassis meant a more roomy interior, plus storage for bags internally. But Passey realised this would not be enough. He commented to the Financial Times "You had to do a lot of things to break the way business is done normally. Business people and the middle classes were comfortable journeys aliowed them to arrive fresh for In 2008, Volvo opened a new state-of-the-art bus bus tactory worldwide, producing a fully built bus in Questions 1 Rank the elements of Passey's strategy for Volvo in order of importance. Could any have been dispensed with? 2 How sustainable is Volvo's luxury bus strategy?
Transcribed Image Text:ILLUSTRATION 6.2 Volvo's different Indian buses ILLUSTRATION Volvo has a strategy to seil buses at nearly four times the prevailing market price. The Indian bus market has long been dominated by two home players, subsidiaries of major Indian con- increasing life expectancy of buses from three to ten glomerates: 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 they truck chassis, the two companies bolted a rudi- drove more safely and took more care of their buses mentary coach body. Engines were a meagre 110-120 The company aadvertised the benefits of the buses horse-power, and roared heartily as they hauled their direct to customers in cinemas, rather than simply loads up the steep mountain roads of India. Mounted promoting them to the bus operators. To kick-start the at the front, the heat from the over-strained engines market, Volvo supplied about 20 subsidised trial units would 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 something and noise of the Indian roads would pour. Suspension Volvo offered post-sale maintenance services, went wrong so Volvo could immediately send its was old-fashioned, guaranteeing a shaky ride on engineers. Faster, smoother and more reliabie travel pot-holed roads. Bags were typically slung on the allowed the bus eperators to increase their ticket top 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 Isuzu Volvo's first Indian employee, commissioned a con- following Volvo into the market. None the less, the suitancy company to evaluate prospects. The consul- phrase taking a Volvo' has become synonymous with tancy company recommended that Volvo should not choosing a luxury bus service in india, rather as even 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 nearest dustbin and threw it in.' Passey entered the market in tactory in Bangalore. It is Volvo's most efficient 2001 with the high-priced luxury buses Passey 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 indi standard engines were 240-250 hp and mounted at Financal Times 31 Apst 2009 the back, ensuring a faster and quieter ride. Air con- ditioning was standard of course. The positioning of the engine and the specific bus design of the chassis meant a more roomy interior, plus storage for bags internally. But Passey realised this would not be enough. He commented to the Financial Times "You had to do a lot of things to break the way business is done normally. Business people and the middle classes were comfortable journeys aliowed them to arrive fresh for In 2008, Volvo opened a new state-of-the-art bus bus tactory worldwide, producing a fully built bus in Questions 1 Rank the elements of Passey's strategy for Volvo in order of importance. Could any have been dispensed with? 2 How sustainable is Volvo's luxury bus strategy?
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