Identifying benefits and utilities of VolvoNet

As we strive to identify the benefits and utilities of VolvoNet, we must have some point of reference. We have chosen to compare the consequences of an investment with the market situation that exists today, i.e. without the investment. This process has been realised under two assumptions, first that Volvo’s Swedish version of VolvoNet will include the same services as VolvoNet in Belgium does, when launched in Sweden. Secondly, that Autobytel.se will offer the same services as Autobytel.com when it is launched in January 1999. Both these assumptions have been considered reasonable by respective party. We thought it necessary to include Autobytel.se in the analysis
as they offer a comparable service for new cars and are believed to become an important actor on the market. The second third party service provider considered is Bilweb as they also offer a new cars service. Although the service for new cars is functioning today, the service is to be fully launched in January 1999 (Andersson, 17/11/98).

Another important factor to consider before analysing the benefits is to consider whose utilities are to be analysed. We are interested in the utilities from a Volvo perspective, how VolvoNet contributes to the manufacturer. With
these assumptions as a starting point we have divided the benefits identified into three groups. First, the direct benefits and utilities for Volvo, second, benefits for dealers with VolvoNet, and third, benefits for the customers with VolvoNet.

Having customers visiting VolvoNet and dealers connecting to this service are prerequisites for the direct benefits and utilities to have an effect for Volvo. As a result of this, Volvo has to convey the indirect benefits to the customers and dealers to make the service attractive for both the dealers and the customers. The two latter groups are also
interesting due to that their benefits can be considered to be indirect utilities for Volvo. For example if the service gives a higher customer satisfaction than other services it is not only a benefit for the customers, but also an indirect utility for Volvo as more satisfied customers also means a higher probability of retaining the customers and increased future sales.

We thereby have to appreciate whether the service brings enough value to the customers and dealers compared
to the competition, and whether a critical mass of customers and dealers will prefer VolvoNet to the competition. With the identified benefits in the Benefits and utilities for the Volvo dealers from launching VolvoNet and the Benefits and utilities for the customers from launching VolvoNet sections as a basis we consider VolvoNet to be competitive.

From U.S. and Swedish statistics we have made an estimation of the number of visitors. From the results in the appendix section Estimation of the number of VolvoNet users, we believe that a critical mass of users can be attained. It should be mentioned though, the definition of a critical mass is up to Volvo to make.

Assuming that VolvoNet will be launched, we can continue identifying the benefits and utilities for the concerned parties.

It is important to remember that the utilities we identify in the following sections are not necessarily the result of the investment in VolvoNet. VolvoNet merely enables these benefits and utilities to be taken advantage of. It is then up to the parties involved to adapt their organisations and business processes to harvest the fruits of the investment (Wikström, 1998, p. 17). Moreover, it is also important to recognise that these utilities must not have an instant effect, the effects may be delayed until the Internet becomes more mature and a natural part of life, much like
television has become.

There are general benefits from using the Internet as a marketing and sales tool. Here though, we are concerned with the specific competitive benefits that VolvoNet can provide that in the end can be of utility for Volvo. Thus, benefits that can be utilised by Volvo directly as well as benefits that can be of utility for Volvo indirectly through dealers’ and customers’ benefits. It is important to notice that we are comparing the situation if VolvoNet is being launched with the situation if it is not.

From the benefits to be mentioned in the next sections, several utilities can be derived from brokering cars on the
Internet instead of through the ordinary channels. Hence, the larger share of cars brokered via the Internet channel and the more visitors there are, the better it is for Volvo.