Generating Revenue-Streams from Vehicle Connectivity Solutions - A case study of Volvo Car Corporation

Abstract

In times of instability in a heavily competitive market, where competing organization strategy has become very similar and innovation of process are quite easy copied, a good way of capturing value can be crucial in order to find new approaches and new ways of generating revenues. Connectivity has become part of our daily life and many people expect to be connected at all time and now vehicles are being developed in order to comprise connectivity functions. The purpose of the thesis is to analyze how pricing strategies affect value capturing within vehicle-connectivity solutions and to contribute to the acknowledgement regarding connectivity opportunities that exists within the vehicle industry. The research was carried out at Volvo Car Corporation and our results show that connectivity solutions may be priced differently according to what objectives the firm wants to achieve. The value captured can be both direct revenues e.g. upfront cost or subscription fees and indirect revenues e.g. better customer relationship.