Competing within a changing world
A Rolls-Royce case study

Page 1: Introduction

No business today operates in a complete vacuum unaffected by market forces. By their very nature business activities are competitive. Within a dynamic, rapidly changing business environment producers are constantly entering and leaving the market. At the same time, changing customer preferences provide signals for businesses to develop new strategies with different products and services. Some...
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Page 2: The market

Rolls-Royce has not made motor cars since 1971. Rolls-Royce and Bentley Motor Cars Limited is owned by Volkswagen but exclusive rights to use the Rolls-Royce name for motor vehicles will pass to BMW in 2003. The Rolls-Royce group is a global business with customers in 135 countries and production facilities in 14 countries. It employs around 40,000 people focused upon the present and future...
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Page 3: The changing external environment

The commercial aero-engine business of Rolls-Royce operates within two distinct market sectors. These are: new engine sales to the two manufacturers such as Airbus Industrie and Boeing, as well as airlines; engine parts sales to airlines that service and maintain aircraft. Competitors in this secondary market include specialist maintenance companies. The new engine market is the primary...
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Page 4: Improving service

The aero-engine market is vertical with a limited number of buyers. The customers of Rolls-Royce need to satisfy both their future and present needs. In the past, decisions about aero-engines were largely based upon cost and efficiency. However, in today’s more competitive environment, Rolls-Royce’s customers look for a much more complete service. Buying an aero-engine is a long-term...
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Page 5: Porter’s Five Forces model

One way in which staff within Rolls- Royce have focused their actions for responding to the changing role of the business, has been to use Porter’s ‘Five Forces’ model of industry competition. Five Forces analysis gives an improved understanding of the degree of competition within the business environment. It has helped them to develop a better understanding of the business...
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Page 6: Conclusion

In response to changes within its business environment, Rolls-Royce has developed its orientation from that of engineering to become more business- and service-focused. The organisation has had to become much more proactive, dealing with new ideas to create more services and customer focus. In the past, change was rare and slow, the company tended to follow the market trend. The structure of the...
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