Conclusions

We have in this thesis studied a pilot service for car brokering on the Internet and made an attempt to identify the possible future benefits and utilities for the operator (Volvo) from a launch of the service on the Swedish market. We have also quantified these utilities and suggested formulas for calculation of their economical contribution. To accomplish this we have used the GRT model which we developed in the first part of this thesis (GRT – A Valuation Model for IT Investments). The model may be used as a general tool for valuation of Internet services. In
this part of the thesis, though, it has been slightly adapted for a valuation of VolvoNet. During the course of valuation, the GRT model’s various parts have proved to be working for our case (which excluded costs).

From our viewpoint, the model has successfully been used to identify the benefits and utilities of launching VolvoNet in Sweden. As the Internet market for car brokering develops, some of the utilities will disappear or diminish and others may appear. We have been able to highlight many of the areas where profits can be made compared to if the
service is not being launched. It is important to notice that actual profits from these utilities are not guaranteed, profits are merely made possible by the launch of the service. For this reason, we hope that this model will not only be used for decision support in the process of deciding whether to launch the service or not, but also for deciding which actions should be taken to capitalise on the various utilities.

The Internet market, and specifically Internet car brokering in Sweden, is immature and little is yet known of its potential and future development. This fact, as well as the qualitative nature of many of the utilities connected to
the investment, have affected the reliability of the results of our valuation model for VolvoNet. The model has no intention of measuring the exact results of the investment. It is to be used for providing more accurate estimations of the results. The accuracy of the results will obviously rely on the accuracy of the numbers entered into the formulas.

The complexity of evaluation and valuation of IT investments also implies that further studies could be made in order to further establish the utility and profitability of the service. This research ought to include risk- and cost analysis.

Implications for Volvo of the identified benefits and utilities

From the benefits identified we have concluded that there are strong incentives for a launch of the service. In order to maximise the payoff of the benefits connected to the investment, the service should be implemented as soon as possible on the Swedish market. This holds true as long as satisfactory service can be guaranteed the customer. Recommending a launch without taking the costs involved into account can be regarded as a strong statement, but from our viewpoint it is necessary to follow the development of the market and the demands of the customers. It is better to enter and influence the development of the market than being forced to an entry at a later point of time. The recommendation is further strengthened by the fact that other independent services as well as other manufacturer services can be expected to enter the market of car brokering on the Internet in the near future. Even more important for our recommendation are the discussions in the Direct benefits and utilities for Volvo from launching VolvoNet section which in our opinion provide enough arguments for that Volvo will benefit from a market entry, even if the costs turn out to be fairly high.

Moreover, the connected dealers and customers will also benefit from VolvoNet. The market description and the dealer benefits presented in this thesis may also be used for convincing the dealers of the necessity of joining the service as well as providing arguments for that the service is favourable for them as well.