Creating a Novel Value Proposition for Volvo Cars Using Innovation

This report presents a novel value proposition for Volvo Cars, focusing on the XC90 SUV and leveraging innovation tools such as Artificial Intelligence and Smart Connected Products. It addresses problems like high safety costs and recent recalls, proposing solutions aligned with technological and sustainable trends. The analysis includes identifying target customers, competitive advantages, customer desirability, technical feasibility, and financial viability. The report emphasizes the importance of safety, economic growth, and responsible production in Volvo's strategy, aiming to attract both existing and new customers while enhancing the company's brand image and market positioning. The study uses the selected innovation tools and techniques to support the findings of the report.

Running Head : VALUE PROPOSITION IDEA AND INNOVATION TOOLS
Value Proposition idea of Volvo Cars
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1VALUE PROPOSITION IDEA AND INNOVATION TOOLS
Executive Summary
The entry of Volvo cars into the market of the Sport Utility Vehicle along with the XC90
leverages that will be set upon the brand equity measures of maintaining safety, along with the
reliability and the longevity measures. With the recent rollover of SUV the other problems of
collision along with the value proposition for the XC90 to attract the consciousness along with
the safety measures of the customers. The innovations for safety will also be accompanied by the
compelling attributes that will be able to attract both the existing and the new customers of
Volvo (Christiansen & Strobel, 2019).

2VALUE PROPOSITION IDEA AND INNOVATION TOOLS
Table of Contents
Executive Summary.........................................................................................................................1
Introduction......................................................................................................................................3
Discussion........................................................................................................................................3
Problem to be solved:..................................................................................................................3
Portfolio of the solutions.............................................................................................................4
Technological Trends..............................................................................................................5
Sustainable Trends...................................................................................................................6
Target customers..........................................................................................................................7
Competitive advantage................................................................................................................7
Customer desirability...................................................................................................................8
Technical Feasibility....................................................................................................................8
Financial viability........................................................................................................................8
Application of the selected innovation tools and techniques to support the findings of the
report............................................................................................................................................8
Conclusion.......................................................................................................................................9
References......................................................................................................................................10

3VALUE PROPOSITION IDEA AND INNOVATION TOOLS
Introduction
The innovation tools that will be used for the value proposition idea of Volvo cars are:
 Artificial Intelligence
 Smart Connected Products:
 Decent work and economic growth
 Partnership for the goals:
 Responsible consumption and production
For the different households who value the measures for safety that will be above the features in
the premium automobile industry, the Volvo XC90 that will be the sort of mid luxury SUV car
that will provide the exceptional protection to all its passengers. If we compare the Volvo cars
with the other luxury midsize SUVs, the Volvo XC 90 will provide the unparalled process of
innovations in the technology sector for making the cars safest in the market of SUV. The
significance of the value proposition measures lies in the compelling argument for the Volvo cars
that will focus on the marketing efforts that will be addressed to the target customers (Yakob,
Nakamura & Ström, 2018).
The value proposition measures will serve as the most important roadmap for the
positioning patterns for XC90 in the market opportunities. The value proposition measures
involves the capitalizing measures on the brand image for the program of manufacturing
program, the XC90 will be applicable in the reputation of the company that will be analyzed
along the product lines of the company

4VALUE PROPOSITION IDEA AND INNOVATION TOOLS
Discussion
Problem to be solved:
Amidst the vast value of the Volvo cars, there has also been a huge cost incurred for the
different safety concentration levels over the different years. The Volvo cars though has
managed to win the several hearts of people, but the business has often been ravaged by the
bleeding money that can also be contrary to the commercial vehicle division that has done well
till the past years. So in the year 1999. The cars made by Volvo was often sold to the company of
Ford (Sjöberg & Erici, 2017).
The American company often lay in the most of the acquisition programs that also
enabled the purchasing of the Jaguar Land Rover cars. Along with the Aston Martin. The engines
and platforms that were developed over the past years for the different cars that were launched
under different brand titles. For instance we can take the example of Volvo XC60 and the
Freelander Land Rover that twill be based upon the platform of EUCD that was developed in
during the 1990s. In fact, there were several engines that have crossed the brands and they were
similar in their brand structure (Yakob, Nakamura & Ström, 2018).
In a recent announcement, the cars of Volvo was seen recalling the volume of more than
5, 00,000 cars that were seen sighting globally the potential risks that lay at the engine bay of the
company. In fact the Volvo Company has reported that its plastic engine and the associated
intake may take the role of massive deform and melt. In fact it is the company that reported that
there might be an underlying possibility of the engine of the cars catching fire in the engine bay
(Brannestam & Josefsson, 2018).

5VALUE PROPOSITION IDEA AND INNOVATION TOOLS
The cars that are powered by the 2.0 liter diesel petrol and the manufactured cars that
were manufactured between the years 2014-2019 that have also been affected. In the markets of
other countries like that of India, the recall of the products include the
S60,S80,S90.S90,V40,V90 and XC90 that have been recently recalled. Like any other recalls,
the Volvo cars has also promised to replace it with other products at lower or free of cost. The
customers at this time will be contacted by the channels like the phone call or the emails sent that
will be requested to drop the required cars at the nearest service center for the purpose of
replacement of the several parts (Backman & Börjesson, 2016).
Portfolio of the solutions
The five innovation tools that have been selected for the value proposition measures are:
Technological Trends
 Artificial Intelligence: The recent reports from the company has revealed that the
company of Volvo will join the forces with the Nvidia group in order to develop the
artificial intelligence in the Volvo cars in the self-driven trucks. The artificial intelligence
is essential to provide a boost to the Chipmaker firm in the United States that was
dropped by Tesla last year. The agreement announced jointly Nvidia and Volvo that
stands as the world’s largest automobiles manufacturer after Daimler AG that have begun
their partnership activities along with the financial terms of the company. Volvo has
partnered with Nvidia as the Nvidia dominates the fast growing chip of Artificial
Intelligence along with the Intel Corp company (Yakob, 2019).
 Smart Connected Products: Klas Bendrik, the group CIO for the cars manufactured by
Volvo has however taken the different approaches to leverage the value of the Smart
Connected Products. In order to remain sure of the focused customer value side for the

6VALUE PROPOSITION IDEA AND INNOVATION TOOLS
different connected cars of Volvo is the most crucial point to boost up the internal
efficiency measures. In this context there can be several factors like that of the preventive
maintenance standards where the customers can argue with the several connected
capabilities that will be focused on the standards of the internal efficiency of the Volvo
cars which will add to the customer value in order to avoid the unnecessary breakdown of
the cars of Volvo (Bolesnikov,et.al 2019).
The strategies for having the most number of the smart connected products revolve around
the proof of concept projects or the prioritizing issues of the selected cases, but the most
important fact in this context is the hardening of the Smart Connected products strategy and the
other forms of the commercial offers that will take sufficient time. The manufacturers will start
very soon in order to show the rate of progress through the steps of the proof of concept scenario
of the automobiles manufactured by Volvo (Fang & Chimenson,2017).
 Decent work and economic growth
Over the past years, a significant number of workers who have survived under extreme
poverty levels has shown a rate of decline despite the lasting impact of the economic crisis that
struck the company in 2008 in the midst of the global recession level. Volvo should follow the
policies of the sustained economic growth levls along with the higher levels of productivity
standards of Volvo with the significant standards of the technological innovation measures. The
sustained level of economic growth will be able to encourage the entrepreneurship standards
along with the job creation strategies that will provide with the effective measures in order to
eradicate the incidences of the forced labor tendency in the company. With these targets in mind,
the goal that will be required to achieve the full productive employment capacity for decent work
for the men and the women by the year 2030 (Renneby & Sommer,2018).

7VALUE PROPOSITION IDEA AND INNOVATION TOOLS
Sustainable Trends
Partnership for the goals:
The company of Volvo should lay particular emphasis on the targets which
include the development of the quality along with the production of the reliable and
sustainable and resilient form of infrastructure that will include the development
strategies through the enhances financial , technological and the technique form of
support to their customers. The company should look forward for effective form of
public, private and the other civil society partnerships that is necessary for the company
to succeed in the market scenario.
Responsible consumption and production
The company of Volvo in order to achieve a sustained level of the economic growth
measures require to urgently reduce the ecological footprint capacity by changing their way of
production and the nature of the production of its goods to the different target customers. This
will foster the measure of the efficient form of the management that will set important targets to
achieve this goal of the company (Fang & Chimenson, 2017).
Target customers
The reports have revealed that the campaign of the Volvo company is aimed at the people
who are already in the market domain in order to purchase a new car from the market. The target
customers are more likely to purchase the cars manufactured by Volvo though it may not end on
the top of the company’s list. Since Volvo has been in the category of the upmarket brand, so it
has set up its target audience for both men and women who are mainly in the age group of 25 to
the age group of 44with an average annual income of 50,000 Euros (Olleros, 2017).

8VALUE PROPOSITION IDEA AND INNOVATION TOOLS
Competitive advantage
In order to enhance the competitive advantage of the Volvo Company, the company
should put more emphasis on the performance level of the company rather than finding out more
ways where the allied customers will not be able to match their productive capacity. Volvo
should devise such strategies that will involve the formalized decision taking models along with
the measures that should be taken up by Volvo that will be aim at the participation rate on global
basis where there can be a high rate of competition among other similar companies (Zakladna &
Ehrl, 2017).
Customer desirability
According to the research by Mintel, 15% of males and 9% of females will have more
tendency to have a car of their own with slight differences in their age. The results of the
research conducted by Mintel show that almost 16% of the households with an average income
of 15,500 euros who will own a car of less than three year sold will rise to the share of 40% of
the households (Hjalmarsson, Juell-Skielse & Johannesson, 2017)
Technical Feasibility
. By stating the fact that the Volvo cars are mainly meant for the households who will
value the safety measures in the vehicle, where the Volvo cars will clearly target the people who
will have the maximum utility measures for restoring the safety as an important attribute. The
target consumers will consider the safety measures that will be considered as the most important
requirement among the other different features that are provided by the SUV cars. By virtue of
the innovative measures of the safety measures of the XC90 , the company in the year 2003 was
awarded the prize for new Motor Trend of the Year along with the further recognition measures
for the superiority of the Volvo cars in order to launch the safety products launch (Fu, 2016).

9VALUE PROPOSITION IDEA AND INNOVATION TOOLS
Financial viability
1. Year-one revenue expectancy
Number of units sold annually 10,000 7,000 8,000 9,000
Average sales price per unit $20.00 $25.00 $30.00 $35.00
Annual revenue per product $200,000 $175,000 $240,000 $315,000
Total year 1 revenue $930,000
2. Year 1 cost of goods sold
Expected gross margin per product 20.00% 25.00% 30.00% 35.00%
Annual cost of goods sold per
product $40,000 $43,750 $72,000 $110,250
Total year 1 cost of goods sold $266,000
3. Annual maintenance, repair, and
overhaul
Factor (%) on
capital equipment 20%
4. Number of years for straight-line
depreciation 5
5. Annual tax rate 30%
6. If long-term debt is being used to
finance
operations, enter the total loan
value.
-
7. Account receivable and payable % 20%

10VALUE PROPOSITION IDEA AND INNOVATION TOOLS
Application of the selected innovation tools and techniques to support the findings of
the report
The innovation tools and techniques that will boost up the performance of the Volvo
company is first the application of the Artificial Intelligence Tool. The application of artificial
intelligence in the functioning of the Volvo Company will boost up its production and will be
able to enhance its customer base along with increasing the product diversity dimensions. The
second tool is the smart connected products. The smart connected products will leverage the
customer base and will help in the product diversity measures of the products manufactured by
Volvo. The third factor is the decent work and the economic growth of the company of Volvo.
The company should try to enhance its production level long with maintaining the sustainability
standards of the pattern of the production. This aspect will lead to the decent pattern in the
economic growth along with the sustainability standards (Fetscherin & Beuttenmuller, 2016)
The other sustainable aspects include the partnership for the different goals that will be
enhanced by the public private partnership level of the Volvo companies that will enhance its
production along with the customer base. The last goal is responsible consumption and
production which means that there should be a greater tendency of responsible and sustainable
production and consumption patterns of the Volvo cars.
Conclusion
Finally it can be concluded that the value proposition measures of the Volvo cars have
reflected the different perspectives. The cars have also come up with the innovation measures

11VALUE PROPOSITION IDEA AND INNOVATION TOOLS
and tools to enhance their value proposition techniques. The company has faced several
challenges and have tried to resolve those challenges with their innovation tools. From all the
innovation strategies of Volvo, according to me the most suitable tools will be that of artificial
intelligence and the mechanism of the smart connected products of the company. The innovation
tools will result in the enhanced value proposition measures of the Volvo cars.