Rolls Royce: SWOT Analysis, Industry Analysis, and Financial Performance

Running head: ROLLS ROYCE
ROLLS ROYCE
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Executive Summary
The given report discusses the performance of the company Rolls Royce. The report is in a
structured format whereby the introduction of the report has discussed the different strengths and
weaknesses of the company followed by the strategic environmental analysis. The later half of
the report discusses the financial performance of the company followed by pricing strategies
recommendations.

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Table of Contents
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Introduction
Rolls Royce Holdings plc is a leading automobile company from Britain formed back in
1904. The company designs, manufactures and distributes different systems for international
companies and aviation industries. The Rolls Royce is the second largest maker of air craft
engines in the glove (Williams 2014). The company is listen in the London Stock Exchange and
is a constituent of the FTSE 100 Index. The market capitalization of $30 billion roughly and is
headquartered in London.
SWOT Analysis of the company
Strengths
The strengths of the company have been given as follows:
 Brand Image- As the company has been in business since a long period of time, the brand
image of Rolls Royce is very strong and comparatively very re- owned as and when
compared to the other companies in the similar industry.
 Quality- Rolls Royce is famous for proving quality products. Whether in the domain of
energy or in the domain of automobiles, Rolls Royce is quite famous for its quality
offerings.
 Suspension System- The suspension system used in various products of Rolls Royce is
very strong.
 Heritage- Rolls Royce has a rich cultural and a noteworthy heritage.
Weakness

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 Not a high turnover- The primary weakness of the company is that it has not been able to
engage in high turnovers. This is specially related to the automobile sector where the
income has been restricted since the last few years.
Opportunities
The opportunities available to the company are as follows:
 Aircraft engines- The Company can expand more into the aviation industry and start a
full time operations and productions of the aircraft engines (Harrison and John 2013).
 Limited editions- It can start exploring more into the limited edition products as they
assist in creating sustained demand in the country.
 China as a country- The Company can look out for ample opportunities in the country of
China. The economy is a developing one.
Threats
 Economic crisis- The global economy has not been doing that well and due to this reason,
the comp any might face problems during its growth phase (Weil, Schipper and Francis
2013).
 Emissions- The emission reduction and other policies act as a barrier.
The given report will be discussing the strategic positioning of the company using
various industry analysis tolls like Pestle analysis and Five Forces analysis. The financial
statements of the company will also be reviewed and the certain pricing strategies shall be
provided.

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Industry Analysis
In order to analyze the industrial environment of Rolls Royce, the first tool to be used is
the Michael Porters five forces. The given tool assist in the understanding of the extent of
competition present in the industry and assist the company from making long term plans. The
different components in this tool are as follows:
 potential entrants and the threat of entrants
 power of buyers
 power of suppliers
 threat of substitutes
 Competitive Rivalry
Competitive rivalry
The industry to which Rolls Royce belongs to is highly capital incentive and there exists
constant investment in advanced technology along with research and development in the given
industry. Hence, there does not exists a single manufacturer and the rivalry is thus moderate. The
competition which exists in the primary market in relation to aero engines increases considerably
as it is linked to the secondary market for the sales and services. As each company has been
trying to improve their market share, the competition is intensified in that segment. Furthermore,
the competition in the turbine engine gives rise to rivalry. The main competitors of the company
are
Power of Buyers