Marketing Strategy and Competitive Positioning pdf ebook

CHAPTER 10 CREATING SUSTAINABLE COMPETITIVE ADVANTAGE
Volvo’s heart will ‘remain in Sweden’
By John Reed
implement each type of strategy different managerial skills are required. An important task of 
senior management is to ensure that the managers assigned to each task have the necessary 
skills and characteristics.
Volvo’s safe, trusted cars – a mainstay of afflu-
ent suburban enclaves in the US and Europe 
– have been called many things.
However, the Swedish brand has rarely 
been compared with a predator of the forest –
at least until now.
Li Shufu, the colourful chairman of Chi-
nese car maker Geely, Volvo’s new owner, on 
Sunday likened Volvo to a tiger penned in a 
zoo that needed to be let loose to run free in 
the broader world. ‘I think we need to liberate 
this tiger,’ Mr Li declared.
At a ceremony in Volvo’s hometown of 
Gothenburg, Mr Li’s company signed a deal to 
buy Volvo for $1.8bn from Ford Motor, mark-
ing the US carmaker’s last disposal of an overseas 
brand and China’s first purchase of a premium west-
ern car marque.
Mr Li told reporters that the Volvo tiger’s ‘heart’ 
would remain in Sweden, where it has two plants, 
and in Belgium, where it has one.
Geely’s boss vowed to keep Volvo’s manufactur-
ing footprint in Europe, but said that the tiger’s 
‘power should be projected across the world,’ giving 
new life to its operations in mature markets.
Volvo sits in the ‘near-luxury’ or ‘only-just-
upscale’ part of the car market, alongside rival Swed-
ish brand Saab and Fiat’s loss-making Alfa Romeo 
– a subsection of the premium market under attack 
from luxury leaders BMW, Mercedes-Benz, and Audi 
since the car industry’s crisis began in 2008.
The German brands’ superior sales and higher 
prices have allowed them to outspend Volvo on 
research and development, and ride out the crisis in 
fitter shape.
Volvo’s signature contribution to car industry 
history is the three-point seatbelt, which it claims 
Case study
has saved more than 1m lives since it pioneered it 
in 1959, prompting other car makers to follow suit.
The Swedish brand celebrated the belt’s 50th 
birthday last year – a fitting event for a car maker 
with a solid reputation for safety, but a dull and wor-
thy image among some consumers and an urgent 
need to raise its game.
The brand is still seen as an industry leader in 
safety technology, though rival German brands and 
Toyota’s Lexus have recently matched or outdone it 
in pioneering some safety features.
However, Volvo’s reputation for building safe 
cars could help its business in China as safety 
becomes an increasing priority in the world’s larg-
est car market.
In design, Volvo is moving away from mak-
ing boxy, square cars into more edgily fashioned, 
smaller and alternative fuel models – an area 
where Geely, which is developing electric cars, 
can help it.
Source
: from ‘Volvo’s heart will “remain in Sweden”’, Financial Times, 29/03/10 (Reed, J.).
Discussion questions
1 
How has Volvo achieved differentiation over the years?
2 
Why did Geely acquire Volvo?
3 
Suggest strategies for Volvo to build upon its unique strengths.
Source
: Oleksiy Maksymenko Photography/Alamy Stock Photo.

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‘[An executive is] a mixer of ingredients, who sometimes follows a recipe as he 
goes along, sometimes adapts a recipe to the ingredients immediately available, 
and sometimes experiments with or invents ingredients no one else has tried.’
(Culliton, 1948)
‘When building a marketing program to fit the needs of his firm, the marketing 
manager has to weigh the behavioural forces and then juggle marketing 
elements in his mix with a keen eye on the resources with which he has to work.’
(Borden, 1964)