Our first day in Gothenburg, Sweden we visited Volvo’s Brand Experience Center. Before we embarked on our journey to Sweden, we had little brand awareness of Volvo. It is actually both our first time in Scandinavia! In this blog, we discuss how Volvo can sustain a competitive advantage with today’s evolving consumer behavior within the Nordic countries and abroad.
During the presentation at Volvo, we learned that Volvo identified with safety and design. We learned that, unlike most automotive companies, Volvo tries to separate themselves as being a “patriotic brand.” Volvo wants to position themselves as being a global citizen instead of primarily Swedish. It is surprising that Volvo would position themselves at a distance from their heritage. Sweden is known for being progressive and forward thinking. Therefore, we imagined that Volvo would want to position themselves closer to their Swedish history and heritage. During the presentation, we also learned that Volvo must actually hire a percentage of foreign employees in order to sustain their international citizen image. This could help enter into foreign markets and sustain a competitive advantage abroad. However it could potentially hurt the Swedish market. Volvo’s heritage could be a factor why Swedish consumers buy Volvo automobiles instead of other European brands.
Additionally, we noticed that Volvo is only present in the Swedish market in Scandinavia. Volvo is popular in central European countries, China and the United States. In Europe, Volvo is popular mostly in Sweden, Belgium, France and Germany. However, Volvo is not popular in Norway, Denmark or Finland. Volvo has difficulty entering other Scandinavian markets, such as in Norway and Denmark, due to high taxes on non-electric automobiles. We assumed that neighboring Scandinavian countries would be loyal to Scandinavian brands. However, automotive companies, which provide electric cars such as Volkswagen or Tesla, are now popular in Norway and Denmark. The government in Norway gives large incentives for citizens to buy e-cars. According to the New York Times, Norway is a global model of how the public should embrace environmentally friendly cars. The Norwegian government exempts electric cars from vehicle taxes, which are one of the highest taxes in the world. (Jolly) Surprisingly, Volvo does not currently sell an electric car. However, they are in the process of manufacturing their first electric car. The majority of top automotive companies, such as Volkswagen, already have an electric car available to consumers. It was surprising that Volvo has not already provided an electric car since consumers are becoming more environmentally conscious. As a result, it is important that Volvo is able to align business goals with current and future consumer behavior.
China is one of Volvo’s largest markets and its cities have extremely poor air quality. As China faces the consequences of poor air quality, consumer behavior in China has been evolving toward environmentally friendly vehicles. Therefore, Volvo must manufacture electric cars to not only be competitive in neighboring Scandinavian countries, but in current markets as well. This has already put Volvo at a competitive disadvantage. However, Volvo’s image as the “safest car to drive” could possibly still give Volvo a competitive advantage. Volvo’s vision is to have no customer severely injured or killed in a new Volvo by 2020. Volvo has been investing in technology, which can help prevent accidents such as autonomous driving. The number one reason why accidents occur is because of distraction. Autonomous driving will allow people to safely multitask while driving in order to avoid distraction. Volvo’s investment in new technology and its new e-car can help Volvo not only gain a competitive advantage in its current markets, but in Scandinavian markets as well.
