Volvo's Innovation Trends, Strategy, and SWOT Analysis Report

This report provides an in-depth analysis of Volvo's innovation strategy, focusing on their adoption of automated driving, electrification, and connectivity trends. It examines the relationship between the company's environment, innovation strategies, capabilities, and value capture in the marketplace. The report explores the importance of aligning corporate innovation strategy with business goals and assesses the impact of these innovation trends using a SWOT analysis. It offers recommendations for organizational strategies that best support innovation and discusses Volvo's innovation activities, capability development, and value creation initiatives. The report also highlights the importance of innovation in maintaining market position, meeting customer demands, and generating profit in the competitive landscape.

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Executive Summary
The innovation is very important while manufacturing new products or introducing
new products in the market otherwise it is very difficult for an organization to retain
customers or creates its value in the market. Report is based on Volvo which is a largest
Swedish vehicle manufacturing company. They are about to introduce a new product in
which the company used new trends like automated driving, electrification, and connectivity.
The company have to maintain proper relationship in between organization environment,
innovation trends, strategies, capabilities and in capturing value at the marketplace. The
strategies have to ensure the alignment by which organization performance can be improved.
The impact and opportunity of innovation are analysed with the help of SWOT analysis.
Certain activities are recommended to implement innovation and development of capabilities
which organization have to implement the innovation trends into reality. The initiatives are
pursued so that trends in the organization can be followed while manufacturing an innovative
vehicle. To create value in the marketplace is also a big task but with the help of innovation
strong customers can be retained by which company is being able to capture strong value in
the marketplace. The Volvo has to manufacture transport vehicle according to trends as to
make a strong presence in a new market as the market research. The trends which the
company is using to manufacture the product are going to be demanded in the coming future
which will benefit the company in generating huge profit.
Table of Contents

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Executive Summary...............................................................................................................................1
`Introduction..........................................................................................................................................3
About the organization and innovation trend chosen by company.........................................................3
The innovation trend selected by Volvo............................................................................................3
The relationship between organization environment, innovation trends, innovation strategy,
innovation capabilities, innovation values & capture............................................................................4
The creation of corporate innovation strategy ensures alignment and its importance............................5
Analyse the impact of innovation trend on Volvo by using strategy tool..............................................6
To analyse the impact of innovation trend by using SWOT analysis.................................................6
Recommendation for organization strategy best responds to the innovation strategy............................7
The innovation activities organize by organization...........................................................................8
The development of innovation capabilities by Volvo.......................................................................8
The innovation initiative pursue by Volvo.........................................................................................8
The creation and capture of value from the innovation......................................................................9
Conclusion.............................................................................................................................................9
Bibliography........................................................................................................................................10

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Introduction
The innovation refers to a process of translating new ideas and plans into reality or
converting invention into goods which creates value for which customer will pay. As
innovations are defines as a bandied term in global business. The innovation is an act of
making, producing and inventing something as new innovation which is related with
creativity. The employees for the organization have to think out of the box so that the
company can create incremental enhancement. This report is based upon Volvo. The report
includes a brief description of organization and innovation trends which are selected by the
company. The creation of innovation strategy, the impact of selected innovation trends, the
recommendation for innovation strategy. The activities have to organize related to innovation
and the capabilities that the organization need to developed. The innovation initiatives taken
by which company created its value in market. To recommend the company about choosing
the best strategic alignment so that effective innovation can take place.
About the organization and innovation trend chosen by company
The Volvo is a multinational Swedish manufacturing company as headquarter is in
Gothenburg, Sweden (Christensen, 2011). The core business activity of the company is
manufacturing, distributing and sales of transportation and construction types of equipment.
Their other services are financial services and marine & industrial drive system. The
company considers as the second largest manufacturer in terms of producing heavy-duty
trucks.
The innovation trend selected by Volvo
The organization is focusing on innovation trends like automated driving which
means driverless cars and other transport vehicles (Kumar, 2013). Every company is working
is on this project. They have their own slogan which is “The future in motion” and most of
the company are also working on this project. This makes a lot of changes in terms of driving
as in high traffic this technology give time to drivers to do other things which are impossible
nowadays. The traffics are also going to change with the help of this technology. This system
is known as an advanced driver assistance system through which the owner can hand over
vehicle guidance to the system of vehicle in any situation. Now a day, the company have
partially automated cars but in coming year companies will have fully automated cars. This
will boost up the passion of drivers as they will never lose dynamism as well as the

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enjoyment of driving the car or driver have to use just one button to off or on the system as
desired.
The other innovation trend which company used is electric mobility. This refers to
using the technology to increase connectivity with the help of software and intelligent mix of
materials (Liedtka, 2014). Vehicles which are electrification ensure more environmentally
friendly and more comfortable mobility. The last innovation is digitalization as every driver
is in demand as for their own vehicle. The dynamics, consumption, perceived intelligence and
comfort also play an essential role while making advanced technology products in the
organization.
The relationship between organization environment, innovation trends,
innovation strategy, innovation capabilities, innovation values & capture
 The organization environment: - It refers to forces composed of companies by which
performance, resources, and operation of the organization get affected. It includes
both the forces internal as well as external. The internal environment consists of
factors, event which exists within organization (Lichtenthaler, 2009). The external
environment consists of factors which exist outside the boundaries of the organization
as these factors easily influence the choice activities determines its threats and
opportunity.
 Innovation trend: - The innovation trends mean to make products with new ideas,
thoughts, and imagination but by using trends. In the new era, customers are more
into using advanced technology, so companies have to make products which are
innovative as well as used new technology. Volvo is working on automated driven
vehicles future trend.
 Innovation strategy: - It refers to a mapping plan to encourage advancement in
technology used to manufacture products or provides services by the organization.
The plans are usually made with the help of research and development. The
innovation strategies are developed by the organization to use high technology in
management or in production.
 Innovation capabilities: - It refers to an ability through which company can convert its
idea into reality as which carries some economic value. This capability of an
organization to make it possible as to convert plan strategy into something so that
desire objectives can be accomplished into reality.

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 Innovation value & capture: - It means capturing value in marketplace with the help
of innovation. The innovative products help Volvo in retaining new customers and
capturing completion from the marketplace. The company have to use innovation
trends so that customer based is increased.
The organization environment, innovation trends, innovation strategy, innovation capability, and
innovation values & capture share a positive relationship. To introduce a new product first company
have understood the environment internal as well as external, then innovation trends are selected
according to customer need or demand (Ili, et al., 2010). Once the trends are selected then the
company will map the strategies so that product is manufactured according to future trends.
To convert strategy into reality innovation capabilities are require so that the goals of an
organization can be implemented. To measure the innovation or worktop level management
people will capture the innovated values through which actual value is calculated.
The creation of corporate innovation strategy ensures alignment and its
importance
To launch a new product in the market it is very important for companies to use
advanced technology and do certain innovation towards that product. Individuals are not
investing in innovation simply for organization benefit but they seek their benefits as well. If
investors are seeking profit from a particular project then they do not invest in it. Recently, it
is seen that companies always make a blind bet with their investors otherwise it is very
difficult to find a strong pillar for innovation in terms of investors for the company (Möller,
et al., 2008). The companies have to make proper alignment between corporate strategy and
in innovation with appropriate business goals. If they are not aligned properly then it is
possible to have unsatisfactory result or outcome. Approximately 50% says that it is very
difficult or some companies faced a struggle to align their corporate strategy (Donate &
Guadamillas, 2011). The other executive says that aligning corporate strategy with innovation
was their top management challenge. As there are certain ways for a senior executive to
recognize their responsibility by identifying few of areas of concerns, properly communicate
strategy, goals for innovation, and setting expectation from employees as well as properly
monitor that efforts put or headed by staff have to be in the right direction. The strategic
alignment will provide insights to the company which domain is important and which one is
not important to consider while doing innovation in products (Tallman & Pedersen, 2011).
This will helps companies in minimizing the cost of research as important domains are

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identified through alignment. To identify important domain it is very important to create
corporate innovation strategy in which objectives and goals are set so that the profit of the
company can be effectively generated.
Analyse the impact of innovation trend on Volvo by using strategy tool
The trends which are selected by Volvo or looking for are automated driving,
electrification and connectivity. The Volvo group demonstrate few innovations in current
research and development which is all about autonomous refuse truck, electric hybrid. The
company always used new innovation trends to make products as to meet future demand of
products. To analyse impact, opportunity and threats associated with innovation are analysed
with helps SWOT analysis (Bacciotti , et al., 2016). This is a framework used by company to
analyse the competitive position of the company in particular business environment. The
Volvo is a leading company within the industry to maintain its position or take strategic
decision making company carefully analyse new trends. The trends which are used by Volvo
to make products are unique. All the innovation trends are used by Volvo to make advance
technology transport vehicles.
To analyse the impact of innovation trend by using SWOT analysis
Strength
• The cost of the production can be minimized if future innovation trends are used to
manufacture products.
• This will help the company in maintaining a position in the market and also easily
meet up the demand of customers.
• To use advanced technology or innovation trend declining margin can increase and
shareholder’s confidence is also building again.
• The brand image maintained again as they recall few products from the market due to
a defect in a panel of trucks and another transport vehicle.
Weakness
• The research and development cost can increase as they require huge research as
products have to meet future trends and demand of the customers.
• To generate huge investment so that automated driven, electrification vehicles can be
manufactured.

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Opportunities
• They get global growth in various sectors as the company is a leader in the transport
segment. This automated driven vehicle can make a huge position in the company in
the freight sector. Due to this in a short span of time products are easily transfer from
one place to another.
• The advanced technology is needed by many regions, as this will make possible for
companies to increase presences in the global market.
Threats
• There are many companies who used advanced technology to make products by
which intense competition in pricing can be increased by which revenue can declines.
The competitors of Volvo are Caterpillar, CNH, and Hitachi, etc. as this impact the
bargaining power of the buyer (Kurttila, et al., 2008). The pressure on Volvo is
increasing to improve the performance of the product.
• There are some countries where these advanced technologies are not very popular.
The products are demanded in countries where advanced technology is in use. To
transport particular products in developing countries is also a threat to the company.
Recommendation for organization strategy best responds to the innovation
strategy
The innovation strategy is referred to making a plan or strategy as to grow in shares as
well as the profit of the company in the marketplace. Innovation strategy provides the
solution related to whether a product requires improvement or disruptive approach need to
apply (Bryson, 2017). The design thinking is all about making products according to new
trends and companies also consider future trends so that when the demand for the particular
product increased. The product must be available by the company in the market. To make the
best response towards innovation trends companies should make innovation strategy just not
considering customer needs and organization requirement but also anticipates the future trend
of a particular industry. The company is also required to develop an idea, product, services,
tools or process, which allows companies to successfully meet future trend or demand for
particular products effectively as well as rapidly.

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The innovation activities organize by organization
To implement innovation in organization certain activities are require to be done. So
that as per the new era future trends can be followed and according to that products can be
manufactured by Volvo. The Volvo top management used lot activities as to make automated
driver, electrification and connectivity vehicles (Lendel, et al., 2017). The organizing of
innovation activities are on the basis of analysis and certain surveys conducted by
organization in marketplace. To gather the innovative ideas from employees it is very
important to make them aware about current trends and provide general overview of industry
or about the marketplace. The second activity taken by organization is make their employees
motivated so that they can provide new and innovative ideas. The incentive programs are also
been created or employees get rewarded for innovative idea on the basis of predetermined
idea.
The development of innovation capabilities by Volvo
The research is an essential part of innovation when companies identify
organizational learning as consider as critical capability of an organization those are trying to
be innovative. It is very difficult to replicate future trends so that organization objectives can
be achieved (Börjesson & Elmquist, 2011). The learning activity is crucial while developing
innovation capabilities for the organization to implement the strategies into reality. The
learning is a process of transferring or sharing knowledge internally or learning through
previous endeavours as well as collaborating with external firms who provide expertise
solution.
The innovation initiative pursue by Volvo
The world is changing rapidly as every company has to make products while
considering future trends otherwise it is very difficult to meet customer need and demand for
the particular product. Volvo is the largest manufacturing company of transport vehicle. The
innovation initiative pursues by them is to make an autonomous electric vehicle. They just
develop 360 concepts approximately to convert vision into reality (Anon., 2019). The future
trend is evolving of mobility need as a company offers safe solutions, environmentally sound
or personal as well as comfortable travel experience to customers. The company has
collaborated with many tech companies so that they can provide innovation in products. They
are also working on the next generation in-car connectivity services.

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The creation and capture of value from the innovation
The creating value and capturing value from innovation are two totally different
terms. The creating value means is making for customers or for a shareholder. The value of a
customer is created to sell products and services. To create value for shareholder by
increasing stock value, ensure the future availability of investment capability to fund
operations. The capturing refers to a process of retaining a certain amount of value in terms
of percentage provided to business with each transaction (Sosna, et al., 2010). It is very easy
for Volvo to capture a good market value as they are manufacturing products according to
innovation trends and with the help of design thinking.
To implement innovation trends by Volvo they ensure effective strategic alignment.
Without strategic alignment, it is very difficult to implement innovation into reality. If an
organization merges its structure or resources which available in company with the strategy
the performance can be higher. The best strategic alignment done by the organization will
make sure that innovation trends can be easily implemented in an organization otherwise it is
very difficult to meet the future trend (Paci, et al., 2013). To address effective trends
organization has to make sure of the efficient alignment of strategies. The plan has been
effective otherwise structure and resources are of no use in the organization.
Conclusion
From the above report it can be concluded that Volvo is impacted by design thinking
and lean set up. The company selects numerous innovation trends to meet up the customers
demand and also meet future trends due to which needs are going to be changed. The
company have selected automated driving, electrification and connectivity as an innovation
trends. They consider these as have potential to impact the mobility of goods and people by
transforming the transport vehicle. To implement the trends strategies are mapped by the
organization which have capabilities to convert into reality. The impact is analysed with the
help of SWOT. The innovation activities are been selected as according to which initiatives
take place to creates the value in marketplace as well as retain huge customer base by
capture value. The company must go with the innovation trends while manufacturing advance
technology innovated products.
Bibliography

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