Volvo Harvard Case Solution & Analysis

Threat of New Entries

Intense competitive automobile industries make it quite difficult for new entrants to enter, establish or even sustain themselves where the competition is too high. There is a greater amount of expertise needed, high costs and a high-risk involvement making it difficult to stay in the competition.

Furthermore, consumers feel more comfortable with companies that have set their mark in the market through time and quality like Mercedes- Benz, which has gained a stronger loyalty base over the years. Hence, Volvo is not threatened with new entrants as its long presence gives it an advantage over the others and does not feel much threatened (Porter, 2008).


Meeting and Exceeding Competitors Perceived Quality Advantages

Once owned Volvo’s distinct, unique feature regarding speed and safety are now a part of almost every other automobile. To move up its game, Volvo needs to upgrade its safety element and go up a notch. It needs to come up with safe/speedy feature along with another feature that might give it an edge. If Volvo introduces upgraded features along with its unique features, it might need to increase its price to meet greater return on investments. With a smooth and stronger Chinese supplier base, Volvo should not face bottleneck issues. At some point in time Volvo trucks faced back-end issues via the industries supply chain issues and outward dealer networks; however, later on Volvo upgraded its pricing relief.


Hence, Volvo can only meet its ROI by increasing prices if it introduces greater features. The company can follow competitive pricing as the company is facing intense competition in the market. Pricing can be also be utilized as a competitive advantage as the company can offer quality at relatively low prices than its competitors.

Brand Image

With greater work on digital marketing and stronger customer base, Volvo should focus on coming up with different ways to portray the real Volvo image that was once a feather in its hat. Brand image is essential for gaining value and a way to enter in the mind of the customers (Anca E. Cretua, 2007). The company should focus more on doing activities that can give company a positive image in the minds of the customers. The concept of social responsibility and environmental friendly and safety can play a pivotal role on making the company’s brand image strong. Via advertisements and Social Media, Volvo can sustain its positive image.


Volvo needs to come up with better TVCs focusing on its positive features instead of bashing its competitors in subliminal ways. Besides that, the company can use different ambassadors like business tycoon and superstars as their brand ambassadors featuring in their TVCs. On the other hand, sponsoring different events especially car shows and sporting events to increase their media presence and to make people aware of their brands........................................

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