Volvo

I. INTRODUCTION

The modern business world is one of global proportions. Estimated world population in 2004 totaled over 6.3 billion people in over 192 independent countries and 55 dependent states (U.S. Department of State, 2005). Globalization has changed the world of business forever. In 2004, world GDP equaled $51.48 trillion with world trade amounting to over $12.9 trillion (“The World Factbook,” 2004). Since the end of World War II, the international business world has gradually developed into one large multicultural and global economy. In order to survive and be successful in the highly competitive world of international business, a company must understand the true impacts of globalization upon the field of business and be prepared to implement flexibility and cultural sensitivity into all areas of business operations.

According to Hodgetts and Luthans, a multinational corporation (MNC) is “a firm that has operations in more than one country, international sales, and a nationality mix of managers and owners (2003).” When dealing with multinational corporations and the field of international business management there are four primary areas that must be taken into consideration; they are the following: country environment, culture, organizational strategy, and organizational behavior (Hodgetts, 2003). All companies seeking to establish operations on a global or multinational level must be aware of these four areas and be prepared to make allowances and adapt to the incessant and constantly changing demands of the international business world (Hodgetts, 2003).

Purpose of Study:

The purpose of this study is to examine the international operations of the multinational corporation Volvo. This study will focus primarily upon the following categories of Volvo’s international operations: trucks, busses and coaches, and construction equipment. It is the objective of this study to examine the international operations of Volvo in the above-mentioned areas within the countries of Sweden, South Korea, and China. Based upon its findings this report will examine two major issues concerning Volvo’s operations in these countries. The overall purposes of this study are four-fold in nature as follows:

1. To provide an organizational overview of Volvo including such areas as the following: historical background, corporate values, company mission statement, organizational hierarchy, organizational structure, global involvement, and products and services offered.

2. To conduct an external analysis, internal analysis, and SWOT analysis of Volvo operations in the three countries of Sweden, South Korea, and China. The objectives of this portion of the research are to examine the external environments of each of these countries, report upon Volvo’s operations within these countries, and examine in depth the role that Volvo plays in these different nations.

External Analysis: The external analysis will cover the following areas within each of the three countries of Sweden, South Korea, and China: country environment and culture (including language, religion, population, and geography), economy, supply and demand, competitive conditions, technology, and Volvo’s business involvement within each country.

Internal Analysis: The internal analysis will focus upon such areas as the organizational objectives, organizational functions, and managerial functions of Volvo operations within each of the three countries. It will include detailed coverage of Volvo’s marketing strategies, production methods, financial practices, and human resource management methods as well as their organizational strategies for planning, organizing, directing, and controlling within the cultural context of Sweden, South Korea, and China.

SWOT Analysis (Strengths, Weaknesses, Opportunities, and Threats): The SWOT analysis will combine both external and internal analysis to determine Volvo’s overall business position within each of the three countries of Sweden, South Korea, and China. All significant external and internal areas will be covered and categorized as either a strength, weakness, opportunity, or threat, and a final conclusion will be drawn regarding Volvo’s corporate position within each country.

3. To identify and examine the following two major issues facing Volvo in their international operations within the countries of Sweden, South Korea, and China.

• Issue I: The unpredictable nature of the Chinese market and the potential effects this unstable climate might have upon Volvo international operations in that region of the world.

• Issue 2: The declining status of the global environment/climate and the potential effects these conditions might have upon Volvo international operations.

4. To propose recommendations