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The macro and micro environmental factors

The macro and micro environmental factors

1) Outline and discuss the macro and micro environmental factors that are influencing Volvo's strategy?

The micro environment is which explains the internal environment of the company and which tells the position of the company in all the terms of the business and hence this gives an idea of the current position of the company.

Micro environment:

The Volvo name is 90 years old and has become a Swedish international icon. In the year 1999, Volvo a Sweden based company is sold to Ford motor company, but Volvo maintained independency but benefited from the shared research and development and also the buying power. Volvo employs 27,500 employees. Volvo has its company in 120 countries. And has wide network and distribution of its product ranges to different parts in the world. Volvo sells its products through 2400 dealers worldwide. Volvo's main mission is safety, and also invests huge money in Research and development in Safety. Safety in driving has a major role to play in automotive, as majority of the customer's priority is safety. Volvo sold 14 million cars in its life time, the figure shows success of the Volvo cars and also how Volvo has retained its position in the market in long run. Volvo is the strongest brand of FORD motors. Volvo is the major contribution to the success of Ford Motors. Volvo has asset oriented advertising. The main asset of Volvo is Safety, and hence its advertising campaign is also based on its core competence or asset "safety". Volvo being a subsidiary of FORD enjoys a shared Research and development programs. This is very beneficial and cost effective for Volvo, as being a part of the giant automotive group, Volvo can share the cost involved in Research and Development program. Hence this can be one of the key advantages for Volvo to be cost effective. Volvo is also popular for its innovations in the car industry which developed and produced different ranges of cars and hence Volvo has made large profits to FORD motors. The core positioning strategy of Volvo is the Safety and longevity. In order to compete with the luxury brands of Toyota and Lexus, Volvo produced the premier cars which are symbol of luxury. Volvo brand was primary key aspects are Big estate cars, and Safety. Hence Volvo is the symbol of safety and innovations which helped the FORD financially.

Macro environment:

The macro environment gives the clear picture of the changes in the external environment and how these changes in the external environment have an effect on the performance of the company. The macro environmental factors include Political, Economic, social, technological, environmental, legal factors, which are lose but external to the society.

2) Conduct a SWOT analysis on Volvo cars.





3) Outline the strategic options available to Volvo cars, recommending what you believe to be the best option available, give reasons for your answer?

The main problem Volvo cars is facing is the external pressures and changing perceptions and requirements of its customers. Volvo who strategy of "Safety" was very popular during 1990's but with the changing needs of its customers and external environmental factors, the strategy of Volvo did not change hence Volvo has faced such a downturn in its sales during the period of 2004 to 2006. The external challenges are demanding for a more reliable, fuel-efficient and eco-friendly cars, which Toyota have understood the need of its customers and hence have concentrated heavily on fuel-efficient and eco-friendly cars, and therefore have become the world largest and most successful car manufacturer. Moreover, most of the car manufactures have integrated safety into their product design and hence "safety", key element or the core positioning strategy can no more help Volvo to retain its position in this fierce competition.

To outline the strategies for the Volvo cars Ansoff product/ market grid (Ansoff, 1957). This model would help the business identify the strategy that gives business the way to grow their business. The four strategies proposed by the Ansoff let us find which would help the Volvo cars to improve their business. This model helps to identify what have to be marketed and at what time and risk involved in marketing these products.

The alternatives available to the Volvo cars are:

The reasons for choosing the product development strategy as the best alternative for Volvo cars is, because product development is the only alternative which meets the target customer's (especially Volvo's target segment of last 15 years) needs and this is the only possible solution to withstand with the challenges Volvo is facing, and Volvo should also consider the some of the aspects like the competitors of Volvo has already met the needs of the customers who are seeking fuel-efficient cars, and hence Volvo have to integrate all the aspects like safety, performance, reliability, fuel-efficient, with low carbon emissions and comfort to compete with their competitors, as Volvo is already reputed for safety and reliability, Volvo has to some other elects in list of product design to provide a best alternative for its customers. Volvo's introduction of Flexi-fuel cars to reduce the sales shrink as the customers are moving to fuel-efficient cars shows a positive sign in its performance in the future. Future Product development programs also helps Volvo to achieve its programs like Volvo 2020, where it is trying to differentiate itself on two factors safety of both the environment and driving. Volvo should conduct a budgetary process on the available resources as product development process requires an excess investments into many aspects like research and developments and raw materials and advertising campaigns.



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