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AB Volvo Case Study

AB Volvo is one of Sweden's largest employers, and contributes significantly to the nation's economy. Formed originally as part of a ball bearing operation, the company has grown to the point where it is one of the most successful European car manufacturers. In addition to building entire automobiles, the company also manufactures trucks, busses, engines (for vehicles and aircraft), and has interests in diverse industries, including foods. Successful enough in its home country, AB Volvo has developed a large international market, which now accounts for most of its sales. The company has been particularly successful in the United States, where it has an admittedly small market share of the overall car market, but where it has a strong, though by no means dominant, position among imports.

AB Volvo diversified into areas outside of its core business (car manufacturing) in order to help protect itself from the vagaries of the car market. This diversification can first be traced to a diversification in geographic marketing, with the company entering the European and then international markets with its cars. Such diversification helped to protect AB Volvo against potential weaknesses in any one geographic auto market. The diversification into foods represents another move by the company to protect itself against downturns in any one area. Where the international auto market is influenced by economic conditions, oil prices and recessions, the food market is somewhat immune to these influences. By diversifying into different industries, AB Volvo hoped to insulate itself from problems in any one industry.

AB Volvo's primary strength is its sheer size. The company employs a significant percentage of Sweden's workforce, and contributes a large amount to Sweden's GNP each year. AB Volvo's activities have an effect not only on the company, but on the nation's economy as a whole, which puts the company in a unique position to gain c...

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AB Volvo Case Study. (1969, December 31). In LotsofEssays.com. Retrieved 22:31, March 28, 2024, from https://www.lotsofessays.com/viewpaper/1706740.html