Rolls Royce Case Study

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Rolls Royce Introduction

Rolls Royce is a British premium automotive maker with its headquarters at Greenwood, United Kingdom. The company is a wholly owned subsidiary of BMW, a German group which licensed its rights to a brand name, Rolls Royce. Its logo was acquired from Rolls Royce Plc and its grill shaped trademarks was obtained from Volkswagen AG. The company has been operating from production and purpose based administrative facilities which was established in the year 2003 in Greenwood, West Sussex and has been manufacturing branded premium motor cars. The Rolls-Royce Phantom was one of its first cars which were put on sale in 2003 and since then they have extended their line of products to convertible versions and two-door coupe versions of the car.

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Company Name

Rolls Royce

Type of Industry

Luxury Automobile Maker

Headquarters

Greenwood

Sales/Revenue

£15,729 million

Areas served

Worldwide

Number of Stores

 

Competition

Mercedes Benz, BMW, Jaguar, Ferrari, Aston Martin, Porsche

USP

Rolls Royce has a premium status with exclusivity worldwide

Target Groups

High-end customers

Products

Aerospace Engines, luxury cars

Website

rolls-roycemotorcars.com

Rolls Royce Swot Analysis

Strengths

  • Brand Image
  • Luxury variants
  • Superior Design
  • Global presence
  • Skilled workforce
  • Product line has increased since 2003

Weakness

  • Evolutionary design
  • Status symbol
  • Heavily reliant on repeat purchase
  • Exorbitant Design

Opportunities

  • Enhanced focus upon automation
  • Technologically savvy cars
  • Customisation
  • Increased purchasing power of consumers
  • Focus on low cost, hybrid and environmentally friendly products

Threats

  • Enhanced competition
  • Focus on sustainability
  • Increasing costs

Table 1: Swot Analysis of Rolls Royce

(Source: Influenced form Xu et al. 2015)

Rolls Royce Analysis

Strengths

Rolls Royce has always been consistent with its performance, quality and has been manufacturing luxury cars. This has enabled them in premium charging of their products. As per the case study of Rolls Royce, they have obtained support from parent company that has been successful in integrating advanced technologies within their operations. This association has been their biggest strength. The company has been manufacturing luxury cars with top class design and expertise in interiors. The engines and chassis of their cars possess superior build quality. The product line of Rolls Royce has been extended since 2003 and has been offering premium brands such as Phantom Coupe, Phantom Drophead Coupe and Ghost (press.rolls-roycemotorcars.com, 2019). As per the case study of Rolls Royce, their employees are recruited with a lot of attention who are highly qualified and skilled in their respective fields. Moreover, the company has their presence in more than 50 countries worldwide and has its customers from more than 180 countries.

Weaknesses

Rolls Royce has been offering luxury cars and its target customers belong to high class. Hence, its products are perceived as a vehicle for a rich man which is not affordable to people belonging to lower income groups. The pricing strategy of the company has always been at the highest spectrum which might be unaffordable for the majority of customers. As a result, the company will be able to cater a small group of customers (Sadgrove, 2016). As per the case study of Rolls Royce, the company has evolved design of their cars over the time and as a result, most of their cars seem to be a clone of other models. Hence, their customers prefer the brand for its innovative design and styling standards.

Opportunities

With the integration of advanced technologies in the automotive sector, the company will be provided with an opportunity to incorporate these technologies for establishing a seamless manufacturing process. There have been a huge number of ongoing researches in manufacturing self driven cars within the automotive sector (Xu et al. 2015). This will in turn enable luxury car companies like Rolls Royce in automation of their cars more easily as compared to regular car companies.

Threats

Increasing demands of customers for sustainable transportation has led to an increasing concern within the company as the current manufacturing process is not environmentally friendly. As per the case study of Rolls Royce, it can be stated that the company has been facing a greater amount of competition from brands like Audi, Mercedes Benz, BMW and Lamborghini.

Rolls Royce Pestel Analysis

Political

  • Rising uncertainties due to BREXIT
  • Concerns of safety rising due to workplace incidents

Economic

  • Fluctuations in the rates of Foreign Exchange

Technological

  • Innovations which are environmentally friendly and efficient
  • In 2018, Rolls Royce has spent more than £1.3 billion on development and research
  • Revenues in 2018 has dropped down by almost £300 million

Socio-Cultural

  • Emerging economies and globalisation
  • Business operations of Rolls Royce varies in accordance to seasons

Legal

  • Evaluation, Registration, Restriction and Authorisation of chemical norms
  • Settlement losses in Bribery allegation
  • Company paid £670 million due to recognition of indulgence in criminal activity

Environmental

  • Zero waste target by 2020
  • Reducing emission of CHG and use of energy
  • Adopting sources of renewable energy like Project Sunshine

Table 2: Pestel Analysis

(Source: Influenced from Sadgrove, 2016)

Political

Rolls Royce has a diverse portfolio of products which extends for high end customers globally. The decision of the United Kingdom to leave out of the European Union (BREXIT) has been a major concern for the company as it might introduce an element of pricing uncertainty and future supply which might be exploited by their competitors.

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Economic

The fluctuations in the rates of foreign exchange have impacted the profit margins of the company. As per the case study of Rolls Royce, it is evident that weakening of euro value as compared to the dollar, their revenues in 2018 has dropped down by almost £300 million (press.rolls-roycemotorcars.com, 2019). Moreover, Brexit has resulted into slumping of sterling, due to which the company has to reduce £400 billion on their financial hedges value which is used to safeguard themselves against currency fluctuations.

Technological

In the year 2018, Rolls Royce has spent more than £1.3 billion on development and research and applied for approximately 700 patents for safeguarding their international capital base (press.rolls-roycemotorcars.com, 2019). In this way, the company is able to establish a seamless manufacturing process and has made restrictions or modifications on technology which leads to environmental pollution.

Socio-Cultural Factors

Within the United Kingdom, there always exists a higher awareness levels regarding Rolls Royce Brand. However, they are linked predominantly with history of automotive business which is owned currently by BMW. As per the case study of Rolls Royce, more than £3 billion of overall revenues are generated from nuclear and military sectors which can create adverse publicity and extensive lobbying due to generation of ethical and social concerns (press.rolls-roycemotorcars.com, 2019).

Legal

In 2017, an investigation was launched by Serious Fraud Office of UK, which claimed that activities of Rolls Royce are engaged into corruption and bribery. As per the case study of Rolls Royce, due to that the company had to pay an amount of £670 million due to recognition of indulgence in criminal activity (press.rolls-roycemotorcars.com, 2019).

Environmental

The company has been aiming for attaining a target for zero waste by the end of 2020. As per the case study of Rolls Royce, more than 40 manufacturing plants of the company has been able to achieve a zero waste target, despite increased manufacturing of engine (press.rolls-roycemotorcars.com, 2019).

Reference List

Press.rolls-roycemotorcars.com (2019). Rolls Royce case study. Available at: https://www.press.rolls-roycemotorcars.com/rolls-royce-motor-cars-pressclub/article/detail/T0277884EN/rolls-royce-motor-cars-delivers-outstanding-result-in-2017?language=en. [Accessed on: 25th June 2019]

Sadgrove, K., (2016). The complete guide to business risk management. Abingdon: Routledge.

Xu, L., Bo, S., Hongde, Y. and Lei, W., (2015). Evolution of Rolls-Royce air-cooled turbine blades and feature analysis. Procedia Engineering99, pp.1482-1491.

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