Strategic Management Analysis of Rolls Royce

This paper analyzes and selects appropriate corporate and business strategy of Rolls Royce along with evaluation of such selected strategies. Such strategies are developed in consideration to the company’s internal and external business environment analysis. The selected business and corporate strategies are deemed to be suitable for Rolls Royce and it is gathered that it is best suited in comparison to the internal and external business environment situation of the company. The business strategies those are recommended to be implemented by Rolls Royce includes cost leadership, market penetration, consumer focus and focused differentiation.

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Strategic Management Analysis of Rolls Royce
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1STRATEGIC MANAGEMENT ANALYSIS OF ROLLS ROYCE
Table of Contents
Introduction..........................................................................................................................2
Choice of Corporate Strategy..............................................................................................2
Choice of Business Strategy................................................................................................6
Evaluation of the Strategy and Recommendation...............................................................9
Recommendation Criteria..................................................................................................11
References..........................................................................................................................14

2STRATEGIC MANAGEMENT ANALYSIS OF ROLLS ROYCE
Introduction
Corporate and business strategies developed for Rolls Royce will facilitate in analyzing
the ways in which decision is made by the organization regarding its maintenance and generation
of business level strategies. Through developing both business and corporate level strategies,
Rolls Royce will be able to develop company’s product line, competition and target market
through which it can be able to identify its competitive advantages (Rolls Royce 2017). The
objective of the paper is to analyze and select appropriate corporate and business strategy of
Rolls Royce along with evaluation of such selected strategies. Such strategies are developed in
consideration to the company’s internal and external business environment analysis.
Evaluation of the selected strategy justification along with relevant recommendations is
offered. Analysis of the existing academic literature on the subject along with data gathered
related to the automobile industry will facilitate in elaborating the concepts related with the Rolls
Royce business strategy along with selecting the most appropriate strategy (Johnson et al. 2018).
Evaluation of the proposed corporate and business strategy will be carried out through offering
suitable explanation for such strategies. Through developing effective corporate and business
strategies Rolls Royce will be sustain its reputation as an experienced and skilled British
manufacturing organization. This can further facilitate in developing unrivaled products in
international engineering market.
Choice of Corporate Strategy
In developing the corporate strategy internal and external business environment of Rolls
Royce is analyzed that indicates it is an international organization that offers exceptional

3STRATEGIC MANAGEMENT ANALYSIS OF ROLLS ROYCE
solutions for the customers within the defense and civil aerospace, energy and marine markets
(De Man, Nevin and Roijakkers 2016). The organization’s corporate strategy is focused on
maintaining exceptional commitment to investing within research and development. This offers
certain technologies along with intellectual property which facilitates the company in attaining
competitive advantage within an international basis. Such corporate strategies can generate
increased entry barriers within the global markets. The corporate strategy of Rolls Royce is
focused on employing its research and development funding for such strategy implementation
(Visnjic et al. 2017). The corporate strategy of “invest once use many times” can be
implemented by the company within products all through the four major segments of the
company. The manufacturing operations along with supply bases must be integrated and
international.
Figure 1: Proposed Corporate Strategies of Rolls Royce
(Source: Durugbo and Erkoyuncu 2016)

4STRATEGIC MANAGEMENT ANALYSIS OF ROLLS ROYCE
The corporate strategies that are proposed for Rolls Royce in attaining competitive edge
within the international market are explained under:
 Addressing the four global markets: To attain the competitive strategy of becoming a
leading producer of mission-based, integrated power systems along with services for use
within defense and civil aerospace, energy along with marine business segments (Johnson
et al. 2018). In implementing this corporate strategy, Rolls Royce must focus on
maintaining compelling consumer propositions as consumer relationships can turn out to
be the company’s greatest competitive advantages. The company must focus on
providing its consumers with a combination of innovative technologies in overall systems
solutions that can be optimized all through its life. Rolls Royce must develop a
combination of systems, technology along with aftermarket performance that can make
the company’s consumers highly competitive (Amshoff et al. 2015).
 Investing within the technology infrastructure along with the capability: Increasing
research and development expenses to £1 billion yearly along with investing increased
funds within capital projects in order to develop its global productivity along with
capability. The development of dynamic technology management corporate business
strategy will focus on dealing with complex and existing new challenges within the
technological world (Rugman and Verbeke 2017). This corporate strategy responds to the
deeper and broader collaboration with others along with making sure that the new
technology will bring increased value to its businesses and consumers. This corporate
strategy of the company must focus on maintaining pursuit and cooperation in the
application of aggressive technology commoditization.

5STRATEGIC MANAGEMENT ANALYSIS OF ROLLS ROYCE
 Developing a competitive portfolio related with Rolls Royce products and services:
Developing more than forty major engineering programmers under management. In
implementing the corporate strategy, Rolls Royce must focus on introducing new
products such as the Trent 1000 (Kwak and Kim 2016). The major products of the
company must explain the power systems markets for the future years. In implementing
its corporate strategy, the company must focus on redefining its business system that is
used all through Rolls Royce business units. Investing within R & D for developing
cutting edge technologies can facilitate Rolls Royce in addressing increased consumer
needs. The company must focus on perusing new technologies that can facilitate the
company in offering safer, clear and developing highly competitive solutions. In
developing the key horizon technologies which can develop a competitive advantage for
the company in the long term (Böhm et al. 2015).
 Increasing the market shares along with the company’s installed product base: All
through the company the increasing installed product base along with developing
integrated systems is necessary in generating high returns in future. In following such
corporate strategy Rolls Royce must focus on developing renewable fuel cell systems
which has the potential to be clean, cost effective and quiet along with being highly fuel
efficient. The company will be able to attain increasing stable sales and for such reasons
financial resources must be invested by the company for further business development
(Cushman, Kahl and Suarez 2015).
 Add value for the consumers by means of product related services provision: It has
been observed from the business environment analysis of Rolls Royce that most of its
revenues are derived from its exceptional services. The company must develop long term

6STRATEGIC MANAGEMENT ANALYSIS OF ROLLS ROYCE
consumer relationships by means of long term service contracts through which it can
enhance its strong business collaboration (Bo et al. 2015). In this corporate strategy, the
company focuses on maintaining resilient business that can have a major impact on the
global economy and the company’s community. This strategy must focus on the fact that
the company is free to operate and invest within the long term through employing its
financial resources. In developing this corporate strategy, the company must implement
and improve its “Rolls Royce Operating System” (Grubic and Jennions 2017).
Developing digitization can facilitate the company in developing innovative ways of
manufacturing along with serving consumers all across the geographical locations.
Through developing activities in which electrification is important like micro grids Rolls
Royce will be placed better in the global market through developing better electrification
of aero engines.
Choice of Business Strategy
Business strategy of Rolls Royce is focused on retaining the leading position within the
international market. The company identifies an increasing number of customers get loyal
towards its brand based on the company’s effective business strategies. The business strategies
that are recommended for Rolls Royce are explained below:
 Cost leadership strategy- Cost leadership strategy can be implemented by Rolls Royce
in positioning its competitive position among the low cost car manufacturers of the
world. Through attaining the competitive advantage of becoming a low cost car
manufacturer, the company will be able to reduce its costs each year (Jovanovich and
Jerbrant 2015). It can also be indicated that decreasing expenditure along with the

7STRATEGIC MANAGEMENT ANALYSIS OF ROLLS ROYCE
reduced cost must be a part of the company’s management policy. Cars offered by Rolls
Royce is deemed to attain benefits from its decision to maintain a reasonable profit
margin, particularly when the cars are in short supply and ask for an increased premium.
This results in increased demand growth along with providing it the opportunity of
positioning itself as a profiteering organization. Value pricing business strategy of Rolls
Royce is relied on the assumption that the pricing objective is not focused on recovering
expenses but also to realize the product value perceived by the consumers. The
advantages of the cost leadership strategy for the company can facilitated it in offering
consumers with great value for money (Vladimirova 2015).
 Focused differentiation strategy- Business strategy of Rolls Royce must also focus on
implementation of proper focus strategy as this considers the strategic plan within which
the company can focus its resources on tapping within narrowly defined market segment.
In implementing this strategy, the company must focus on a narrow niche market within
which to develop a strong competitive advantage. It must also be used in case Rolls
Royce identifies its target consumer segment along with having products that can
competitively satisfy the needs of its consumers. In implementing this strategy, Rolls
Royce can aim to differentiate within just one target market segments (Baines 2015). For
instance, the company can act as niche players of the automobile industry and it can have
niche of its niche products that is available in a premium price. Certain competitive
strengths can be attained by the company in implementation of focus strategy for the
reason that the competitors do not have capability to attain specific needs of target
consumers. This business strategy can also facilitate Rolls Royce to compete on basis of

8STRATEGIC MANAGEMENT ANALYSIS OF ROLLS ROYCE
differentiation, low cost along with rapid response along bigger businesses with increased
resources.
 Consumer focus strategy- This business strategy must be implemented by Rolls Royce
in order to attain a better competitive position in the market along with attaining huge
market shares through tapping new geographical segments (Jovanovic, Engwall and
Jerbrant 2015). Based on the demands of the consumers, the company must also focus on
maintaining its position as a motor car brand that offers luxurious drive. For instance,
Rolls Royce Ghost can be introduced in the untapped geographical segments such as
Asia. Moreover, along with luxury it must also offer a low price in comparison to the
company’s previous models for instance, (Phantom Holt Brown and Walker 2016). The
consumer focus strategy must also focus on offering best care for the car service attained
by the consumers through providing service from best technicians of the world. The
company must centre its business strategy on fixing its consumers and considering the
same the company attempts to develop and sustain consumer equity so that the market of
the company remains the same. The target consumers of Rolls Royce are observed to
belong to high income group segment and buy its products for increasing company
revenues and growth. It must offer differentiated products to its consumers based on
consumer focus strategy that should center on offering luxurious drive with simplicity,
effective after sales service, calm environment within the cars and offering hand finished
personalized features.
 Market penetration strategy- This business strategy of Rolls Royce must focus on
penetrating new business segment through implementing better generic strategy (Morden
2016). This can facilitate the company in attaining better competitive advantages against

9STRATEGIC MANAGEMENT ANALYSIS OF ROLLS ROYCE
other business rivals within the automobile industry. The market penetration strategy of
the company is focused on offering advanced technologies within its electric vehicles to
the nations where there is high demand for pollution less cars. Market penetration
strategy of Rolls Royce Company must also serve as an intensive growth strategy that can
facilitate the company in increasing its sales revenues within current markets. For
instance, with the help of aggressive marketing, the organization must focus on selling
and rollout all its electric cars within the nation. In this manner, the company can increase
its revenues from the markets within which it do not operate its business (Mendibil,
Rudberg, Baines and Errasti 2016). Rolls Royce can increase its market reach for through
establishing new facilities and offices in Asian market. This strategy also facilitates
international businesses of the company through maintaining alliances with other
organizations that makes it simpler to tap new markets.
Evaluation of the Strategy and Recommendation
The selected business and corporate strategies are deemed to be suitable for Rolls Royce
and it is gathered that it is best suited in comparison to the internal and external business
environment situation of the company (Ramirez et al. 2017). The business strategies those are
recommended to be implemented by Rolls Royce includes cost leadership, market penetration,
consumer focus and focused differentiation. Moreover, the corporate strategies that are
considered to be implemented within the company are Addressing the four global markets,
investing within the technology infrastructure along with the capability, developing a
comparative portfolio related with Rolls Royce products and services, increasing the market
shares along with the company’s installed product base and adding value for the consumers by
means of product related services provision. There are many ways in which the strategic

10STRATEGIC MANAGEMENT ANALYSIS OF ROLLS ROYCE
capabilities are diagnosed by the company in implementing the strategies (De Man, Nevin and
Roijakkers 2016). The strategic capabilities attained by the company are deemed to be highly
effective in facilitating Rolls Royce to attain competitive advantages. The value chain framework
of the company is highly effective in supporting its corporate as well as business strategies.
The corporate strategy of implementing focused differentiation strategy is supported by
Rolls Royce Company’s effective value chain that focuses on effectively maintaining the process
of receiving, warehouse and inventory control of the input materials (Mendibil et al. 2016). Such
operational activities of the company are deemed to add value to its newly developed financial
services and cars. Differentiation and market penetration strategy of Rolls Royce is deemed to be
feasible as marketing and sales capabilities of Rolls Royce makes sure that availability and
maintenance of all its car products. Through benchmarking the suitability of the company’s
business and corporate strategy can also be analyzed by means of evaluating the effectiveness of
the company’s strategic capabilities in comparison to its competitors. The benchmarking
strategies that are employed in analyzing feasibility of its strategies are historical, industry and
best in-class. Improved internal and external communications capability, high net profit margin,
better asset turnover position of the company indicates better performance of Rolls Royce in
addressing its strategic goals (Skertic and Myer 2017). The focused differentiation and consumer
focus strategy along with its other business and corporate strategies are deemed to be achievable
by Rolls Royce. With all the major people, resources along with effective financial resources it
can be able to attain high advantages from attaining opportunities from its recommended
strategies. The company can also excel themselves in implementing the strategies and in
maintaining larger commitments within research nod development within engine along with
manufacturing processes.

11STRATEGIC MANAGEMENT ANALYSIS OF ROLLS ROYCE
Recommendation Criteria
The objective of the paper was to analyze and select appropriate corporate and business
strategy of Rolls Royce along with evaluation of such selected strategies. Such strategies are
developed in consideration to the company’s internal and external business environment analysis
(Scholes 2015). Through developing effective corporate and business strategies Rolls Royce will
be sustain its reputation as an experienced and skilled British manufacturing organization. This
can further facilitate in developing unrivaled products in international engineering market. It was
gathered from the paper that in developing the corporate strategy internal and external business
environment of Rolls Royce is analyzed. This indicates it is an international organization that
offers exceptional solutions for the customers within the defense and civil aerospace, energy and
marine markets. The organization’s corporate strategy is focused on maintaining exceptional
commitment to investing within research and development. Business strategy of Rolls Royce is
focused on retaining the leading position within the international market (Larson and York
2017). The company identifies an increasing number of customers get loyal towards its brand
based on the company’s effective business strategies. It is gathered from the existing literature
along with company’s strategic position; cost leadership strategy can be implemented by Rolls
Royce in positioning its competitive position among the low cost car manufacturers of the world.
Through attaining the competitive advantage of becoming a low cost car manufacturer, the
company will be able to reduce its costs each year. It can also be indicated that decreasing
expenditure along with the reduced cost must be a part of the company’s management policy
(Cusumano, Kahl and Suarez 2015).
The business and the corporate strategies that are considered to be highly suitable to be
implemented in the Rolls Royce Company among all the strategies explained are increasing the

12STRATEGIC MANAGEMENT ANALYSIS OF ROLLS ROYCE
market shares along with the company’s installed product base and focused differentiation
strategy. Focused differentiation strategy of the company is deemed to be effective and highly
feasible for the reason that the manufactured cars of the company have been highly competitive
and different in comparison to its competitors. As the company is an aero engines producer, the
cars will be manufactured by the company, through employing high investment in its research
and development (Mansor et al. 2015). This strategy is feasible as the company has efficient
resource and capabilities in the engines manufacturing sector, particularly core technology along
with technical abilities. Another selected strategy of company’s installed product base is deemed
to be highly feasible for Rolls Royce for the reason that the company has been very effective in
satisfying changing consumer needs and has been focused on manufacturing different cars. For
attaining competitive advantages over its major business rivals. In developing technologically
advanced engines, the company must employ various equipments so that there is huge cost
within the company’s manufacturing abilities. The company must focus on providing its
consumers with a combination of innovative technologies in overall systems solutions that can
be optimized all through its life. Rolls Royce must develop a combination of systems, technology
along with aftermarket performance that can make the company’s consumers highly competitive.
The company has enough resources along with better profitability position within the
global automobile market because of which it can produce small quantities of special products.
For accomplishing this strategy successfully they have attained some special equipment that
requires low utilization. In addition, because of the reason that Rolls Royce have increased
number of facilities that can combat external and internal competition between its new and old
products (Wheelen et al. 2017). Focus strategy is deemed to be suitable for the company in
attaining competitive advantages for the reason that Rolls Royce aero engines based market

13STRATEGIC MANAGEMENT ANALYSIS OF ROLLS ROYCE
focus strategy has been highly efficient in offering better services to its consumers. Focus
differentiation strategy of implementing electronic ERP system, turbo propeller engine, and fuel
jet and turbo jet engine will be highly efficient in alignment with its exceptional technical
research and development abilities.

14STRATEGIC MANAGEMENT ANALYSIS OF ROLLS ROYCE
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