In the following scope, the analytical appreciation of the contexts of the business model and disruption is attempted along with applying the business model of Osterwalder and Pigneur. The overall discussion has been taken place based on Sweden based eminent heavy manufacturing company the Volvo Group and the central point of the overall discussion has been to gain an effective perception of the effect of the existing business model on operational performance of Volvo Group, along with considering the effect of disruption on this specific business model. With respect to the present attempt, a literature review has been conducted for having a better perception of the significance of the terms of Business Model and Disruption and influence of these concepts on the overall business operations of Volvo Group, Sweden. In this connection, the threats and opportunities of smart-connected-products on the business model of Osterwalder and Pigneur has also been considered, followed by expansion of the analysis with help of other two business models.
The term Business Model refers to the specific model reflecting the plans and strategies of the company regarding revenue generation and profiting. An overall perspective of the business is achieved from a business model. In the words of Baldassarre et al., (2017), a business model frames a )step-by-step action plan for strategic operation of the business in a specific market. This is the reason why business models are different for different kinds of industries. As opined by Christensen et al., (2015) value proposition is an inseparable part of the business model, which also includes the projected start-up cost as well as financing sources, strategic competition and target market of the business. According to Christensen et al., (2016), a successful business model includes any possible strategic plans for developing a partnership with another existing business or a number of businesses. Therefore, it is the essentiality of a business model that it provides rationality behind the service creation, delivery and value capturing of an organization. Hence, as opined by Khanagha et al., (2014), construction of a business model is an essential part of business strategy. From economic perspectives, a business model describes the core organizational strategies for economic value generation in form of revenue along providing a basic template on the firm’s strategies of making money. As an inseparable part of the strategic business, the term disruption refers to introducing radical changes in business strategies, which specifically involves the introduction of new products and services creating a new, innovative business market. According to the opinion of Osiyevskyy & Dewald (2015), rapid technological advances along with globalization are the major causes of business disruption. Disruptive innovation has been an integral part of the strategic business model, which is aimed at the creation of new value network and markets and thereby disrupting the existing markets by displacing the existing business aspects of the market.
By using the business model framework of Osterwalder and Pigneur, the logic of the ways of business by the company Volvo Group can be determined. By making effective application of this specific business model, important information is achieved regarding the various key business composites of Sweden based leading manufacturing company Volvo Group. In determining the key objectives of the company this business model has been highly helpful, which by employing the detailed analysis of the core model segments, provides valuable insights about the overall business operational efficiency of Volvo Group. As a leading heavy equipment manufacturing company, operating in international level, Volvo Group has been widely successful in the creation of a strong value proposition. This is reflected from wide ranges of products offered by them, which are smart-connected-products, meeting the tests and requirements of their valuable customers worldwide. Volvo Group is successfully maintaining its process of customer relationship throughout the world. According to Souto (2015), Volvo Group maintains an effective business model which provides them with huge market opportunity in case of acquiring a larger market share. Numerous openings for the manufacturing business of the company have been provided by the proper following of the Osterwalder and Pigneur model. The company Volvo Group has created a huge operational channel spread worldwide through which they effectively maintain strong communicative perspectives with all their key business partners and members of the supply chain. One of the most effective business strategies of the company has been its excellent processing capacity of providing high-quality products and services to their valuable consumer groups. As can effectively be identified by applying the Osterwalder and Pigneur business model, by successfully merging with some of the most effective strategic partners like Mitsubishi Motors, General Motors, and Renault, the Volvo Group has effectively maintained a strategic partnership with the core business partners and mergers. Therefore, according to the opinion of Osiyevskyy & Dewald (2015), effective maintenance of all these strategic business pillars have left a significant influence on the overall cost structure of the company. Thus, a wide range of the smart-connected-products in the global market has helped it in successful innovative operational maintenance of the overall business aspects of them. However, the emerging global market of smart-connected-products is posing a serious challenge before Volvo Group as these products are disrupting their value chains along with forcing Volvo Group in rethinking and reorganizing the core business strategies and tools of the company. Therefore, emerging trends of smart-connected-products have toughened the competition of Volvo Group, which has become new threats to them. Ass opined by Veit et al., (2014), smart-connected-products are actually increasing the IT-driven business competition at a rapid pace, which has compelled Volvo Group in rethinking and revising their strategic operational implications. Therefore, Volvo Group has faced both opportunities and threats by advancement in smart-connected –products to their existing business model.