Innovation and Sustainable Business Development for Volvo Group

Question: Discuss about theInnovation and Sustainable Business Development for Volvo Group. Answer: Business model of Volvo Group, Sweden Every organization in the current environment requires some tools to know about their capabilities and induce them in business process to achieve success. The aim to the essay is to enhance the knowledge of reader about the meaning of business model canvas and disruption in an organization. It provides analysis of the opportunities and threats attracted by the company with the use of smart connected products present in the environment. Further, in the last part the essay talks about the business model of the company and explanation of two of its blocks that are value proposition and resource and capabilities. Further more details of the essay are discussed below: Business model refers to the model that helps an organization create value, capture it and deliver it in the environment to the target audience. The process of creation and use of business model form a part of the business strategy of the organization (Zott, Amit, Massa, 2011). There are three major aspects provided by the business model to the companies in the environment that are, value creation, value capture and value delivery. With the help of this model, an organization gains value and successfully delivers it to the customers as well. Further, Morris, et. al., (2005) stated that there are three main modules of the definition of a business model that are economic, operational and strategic. Economic aspect aims on the profit generation activity by understanding revenue system and cost structure (Osterwalder, Pigneur, 2010). The operational aspect talks about the aim of business model creating value through infrastructural design and the strategic aspect relates to the position of firm and growth opportunities. Morris also added that the business model provides details about the ways in which the company can provide satisfaction to the customers by offering value and effectively using resources and partner networks. Teece (2010) under this case explained that the business model helps the management of the company know that what the customer require, how they want it, what they are going to pay for the products and services and how an organization can organize them to appropriately meet the customer requirements. Osterwalder et. al., (2005) explained business model as conceptual tool that contains standard objects, concepts and their relation with the mission of the company to initiate the success for them. Zott et al., 2010 says that business model is a mechanism that helps the company to capture value a nd deliver it to the customers present in the market.v Further, a simplified business model of no use if it is not connected to disruption present in the market. Disruption refers to the use of innovation or technology in the business process to gain appreciation in the target market (de Jong, van Dijk, 2015). Disruptive innovation in a business helps them to initiate activities in the market that can be easily identified by the user. This process helps an organization to gain competitive edge in the target market (Gobble, 2014). Disruptive technology has the feature to convert the complex products into simpler form that can be easily used by people and organization. Disruptive innovation and technology has now become a major part in the business model canvas as it helps an organization to attain sustainable competitive advantage in the market. Volvo is the largest company present in Sweden in terms of revenue; also it is the biggest employer in the nations private sector. The company has 11 brands, 190 markets and 95,000 employees work ing under them. Some of the vehicles produced by the company are buses, trucks, marine and industrial equipment etc. (Volvo, 2018). Further, as the organization is present in the field of automobile industry so it requires the use of smart connected products to increase its efficiency. Smart connected products refer to the products that help an organization to transfer or share data different processes and different departments as well. The company uses the smart connected tools to incorporate the specific features in their cars. Volvo has created connected car that helps the users to connect with the digital world and communicate with them(de Jong, van Dijk, 2015). This process also provides relief to the customer driving the cars as the driver interface interact intuitively to give full control of all the functions of the car without taking attention of the road. This feature provides various opportunities to the company as it helps to connect with the Bluetooth of the user that initiates pleasant experience to the customers while driving. A person can also use the social media while driving that increases the interest of the customers in the functions of the car. This tool helps Volvo to use the best techniques present in the market and build them in the system of the company (Vermesan, Friess, 2013). Like, Android Auto helped the drivers to control various functions of their phone through the cars center display. Thus, it should be noted that the company Volvo gains opportunity in the market to become the best automobile company providing efficient cars that are actually smart. With this process the company gains the advantage to create a differentiated position in the market (Svahn, Lindgren, Mathiassen, 2015). With opportunities, risks come hand in hand so with the use of such smart connected products, Volvo also gains the risk of attracting many threats present in the market. The first and foremost threat is the threat of accidents. As the organization provides various functions in their car that might distract the drivers while driving (Brjesson, Elmquist, Hooge, 2014). Resulting to which, the company might face many accidental issues. Increase in the number of these issues can hamper the goodwill of the company in the target market. Also, it should be noted that not all customers know how to drive a smart connected car, so they might face difficulty in managing different activities in the car which can decrease their interest as well (Leminen, et. al., 2012). Lastly, it should be noted that in order to provide such specifications in the car, the company gain heavy cost that increases the price of vehicles in the market as well. Due to high price of the vehicles of Volvo the customers m ight lose interest. The business model of Volvo Group, Sweden is discussed below: Key Partners Distribution channels Technology creator Manufacturer of parts and equipment Machine manufacturer Suppliers Subsidiaries Key Activities Manufacturing Distribution Design and engineering Marketing Post sale service and support Innovation RD Value Proposition Provide quality products for transportation Induce prosperity and quality products Contract manufacturing Self-driving vehicles Customer Relationships Direct contact with customers Trust Services through mobile applications Customer-friendly and self-services at outlets Transformation Direct selling Brand Awareness Performance based relationship Customer Segments EPC companies Plant manufacturers Car markers Key Resources Production techniques Open innovation RD facilities Employees (95000 people) Creative and innovative team Diversified open minded people Brand portfolio Channels Online site of Volvo.com Referrals Advertisements E-mail marketing Volvo muesum Social media websites Dealers Service centre Authorized distributors Cost Structure Application designers Logistics and supply chain Parts production Selling expenses Taxes Employee wages Technology Maintenance cost Manufacturing and Production costs Employees RD expense Raw material Minimum Viable product Connected cars Large vehicles like trucks Revenue Streams Sale of parts Physical sales final products like cars, trucks etc. Franchises and licensing Credit/debit cards Insurance and financing Component One aspect of the business model canvas that is being explained in this essay is value proposition. It refers to the capabilities of the company to confront the resources and provide value out of it to the customers present in the market. The company provides value to the customers by providing high quality transports to the customers present in the market. Also, the after sales services increase the value proposition of the increases and satisfy the customers present in the market (Martins, Rindova, Greenbaum, 2015). Also, with the help of smart connected products Volvo manufactures the cars that are exactly required by the customers present in the market. Great value delivered by authorized distributors and dealers also increases the value of the products and services offered by the company in the market (Yang, et. al., 2017). Furthermore, another aspect is resources and capabilities of the company that initiates activities for the growth of the company in the external market. Volvo uses high qualified resource and optimize it in their process in such a way that greatest satisfaction is received to the customers. Also, the human resources are the biggest asset of the company that helps them in sustaining their growth in front of target audience (Clinton, Whisnant, 2018). Thus, concluding the above statements, it should be noted that the business model canvas is an innovative tool that help the companies to successfully implement their business functions in the target market. Smart connected tools present in the environment helps the companies like Volvo to implement innovation strategies in the business successfully. The company Volvo successfully provides value to the customers in the market with the help of resources and capabilities attained by them. References Brjesson, S., Elmquist, M., Hooge, S. (2014). 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