Rolls Royce Business Strategy Analysis Report - BUS 101

This report provides a comprehensive analysis of Rolls Royce's business strategy, examining its external environment through PESTLE analysis, assessing competitive forces using Porter's Five Forces, and evaluating its internal value chain. It also includes a SWOT analysis to identify strengths, weaknesses, opportunities, and threats, along with the application of Ansoff's matrix for growth strategies and recommendations for business development. The report covers various aspects of Rolls Royce's operations, including political, economic, social, technological, legal, and environmental factors, as well as the bargaining power of suppliers and buyers, the threat of new entrants and substitutes, and the rivalry among existing competitors. It emphasizes the importance of adapting to technological advancements, understanding customer preferences, and maintaining a strong brand image in the luxury car market. The report concludes with strategic recommendations for Rolls Royce's continued success and expansion.

Business strategy
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Table of Contents
Introduction......................................................................................................................................3
Task 1...............................................................................................................................................3
PESTLE analysis....................................................................................................................3
Porter's Five Forces model.....................................................................................................5
Value chain analysis...............................................................................................................7
SWOT analysis.......................................................................................................................8
Task 2.............................................................................................................................................10
Ansoff's matrix.....................................................................................................................10
Recommendations................................................................................................................12
Conclusion.....................................................................................................................................13
References......................................................................................................................................14
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Introduction
Business strategy is considered as all activities and decisions taken for overall
development of business. Strategy is prepared to achieve organizations goals and to implement
overall success of organization. Strategy provide a way to business to work on to increase
profitability of their business. Each and every organization needs strategy for development of
their business (Aithal, 2016). To gain competitive advantage over competitor and to grab new
opportunities n different markets. Strategy help to accomplish over plan of organization. Rolls
Royce is an British auto mobile company and manufactures luxury products to provide quality
lives to their customers. In this report we will prepare develop a pestle analysis of Rolls Royce to
know external environment effects on their working and how they will work effectively in
different environment. Porters forces help to know their competitors and organizations issues in
development of business. Value chain analysis help company to gain competitive advantage and
its effectiveness on overall success of their business. Report will show Swot analysis and how it
will effective towards overall achievement of goals and to increase profitability of business.
Ansoff's matrix is used to develop business in new markets and prepare new products according
to customers wants. Provide recommendations on overall development of business.
Task 1
PESTLE analysis
Rolls Royce is an British auto mobile company and produce luxury cars(Scholes, 2015.).
This is owned by German group BMW. The firm was established in the year of 1998. It
provides Phantom, Dawn, Ghost. Firm has hired 1300 employees across the world. Company is
working with different facilities and wants to develop their business at a large scale and in new
developed economies to improve effectiveness of their organizations products and services. To
develop business new territory they need to analyse external environment of those territories and
its impact on their overall working (Bammann, 2019).
PESTLE analysis
Political factors
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Company need to know the policies by government of new territory where they are going
to develop their business. Impact of government on overall working of organization. Due to their
luxury products and services government charges huge amount of taxes on their working in an
economy. Rolls Royce analyse the political stability of new economy and innovate their services
according to the rules and regulations in a new economy (Bammann, 2019). Trade restriction in
some economies become a problem for Rolls Royce to expand their organization services.
Government intervention on transport facilities will effect their overall business(Johnson, 2016.).
For example government reduces prices for transportation facilities like trains and buses it
reduces overall demand for company services. Political stability in an economy help Rolls Royce
to develop plan to expand their business in an new economy (Bohari, Hin and Fuad, 20170.
Economic factors
Company need to analyse economic performance of nation. Need to know economic
growth rate, interest rates by government, income of their consumers, unemployment rates.
Purchasing power of their customers have a huge impact on overall working of organization.
Growth in developing economies help Rolls Royce to develop their business. Economic stability
in developed countries help them in smooth working of their business. Increase in customer
income also increases their demand for luxury services. Economic condition of a nation effect
overall profit of company (Gürel and Tat, 2017). Unemployment rate on a nation effects sales of
company and reduces their profitability. Overall growth in an economy help Rolls Royce to
expand their business.
Social factors
Company need to analyse customs, values, norms in which they are going to expand their
business. Need to attitude of people and cultural barriers that impact overall growth of business.
Social analysis help Rolls Royce to develop new models according to their customers preference.
Company produce new SUV according to demand of their customers to provide them lifestyle.
Company need to target their customers by analysing different preference and choices of their
customers for overall impact on growth of their business (Hamilton-Hart and Stringer, 2016).
Technological factors
Rolls Royce need to adapt new technology that have ability to satisfy their customers
wants and desires (Johnson, 2016). Company need to know the level of innovation they require
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for overall development of their business. Need to make proper research on working of their
organization. Technology awareness in minds of people of economy where company is going to
develop need to be analysed effectively to develop their organizations business. Before
developing their business in a new economy company need to analyse effectiveness and
availability of technology that help them in smooth working of their organization in a new
economy. Technology availability in economy help Rolls Royce to save money for their
business(Rastogi and Trivedi, 2016.) . Company has an opportunity to develop electric vehicles
that have ability to attract large number of customers. Or develop fuel efficient vehicles.
Legal factors
Rolls Royce need to analyse different laws in an new economy where they are going to
develop their business. And this laws effects their overall profitability. Company need to know
health and safety laws in economy and develop their products according to safety consciousness
of their customers. Different environmental and taxation laws that need to be analysed by
company for their smooth working in an new economy. Company need to design the products
that have ability to sustain their business in a long run (Kharub and Sharma, 2017).
Environmental factors
Company need to analyse availability of raw materials that are required to develop their
business in a new economy. Need to analyse laws related to pollution and impact of their
products on overall pollution in an new economy. Company need to work on their corporate
social responsibility to develop their image in market. Changes in climate patterns are become
opportunity for their business to develop. Rolls Royce need to test fuel efficiency of their
vehicles before entering in a new market (Mudambi and Puck, 2016).
Porter's Five Forces model
Five forces model help Rolls Royce to understand their organizations structure and level
of their competitor in market and its effects on their overall working. Company is one of the
biggest auto mobile company and need to develop effective plans and policies for overall
development of their business. Analysis help them to know issues in working of their
organization (Perera, 2017).
Threat of new entrants
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Rolls Royce is an already established company working effectively for overall
development of their business at a large scale. For new companies to enter their market need a
huge amount of capital investment(Perera, 2017.) . Require high cost for competing with Rolls
Royce need time to develop their brand image. New entrants have less impact on overall growth
of company. It new company has an effective product with new technology then it reduces
overall customers loyalty for Rolls Royce.
Bargaining power of suppliers
Strong Bargaining power of suppliers in a new market help them to sell raw materials at
higher prices. If suppliers for raw materials are low than it increases their bargaining power.
Whereas Rolls Royce manufacture large number of raw materials on their own for their vehicles
which reduces power of their suppliers (Phadermrod, Crowder and Wills, 2019).
Bargaining power of buyers
When large number of competitors are available less customers in market then it
increases bargaining power of buyers. Because switching cost is low there are many substitute
for their products. Due to an effective brand image and less substitute for their products in
market reduces overall power of their buyers to bargain. Company provide luxury products and
services that have less substitute in market which make them one of the leading company.
Threat of substitutes
When customers are able to find a substitute product with quality to satisfy their
customers wants(Zahari and Romli, 2019.) . Buyers feel better quality of products from
substitute then they are able switch for another product. Due to less availability of substitute for
Rolls Royce they are able to develop their business and innovate their services. Customers are
not able to switch cost for their products and services which make them effective and leading
company in market.
Rivalry among existing competitors.
Large number of competitors are available in market which effects overall growth of
companies. Customers loyalty are decreasing with increasing competition, competitors have
equal quality of products. Due to less availability of firms to compete with Rolls Royce.
Automotive industry have high exit barriers and differentiated products and luxury vehicles of
company help them to compete in market (Rastogi and Trivedi, 2016).
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Value chain analysis
Value chain analysis is very crucial for the business management as well as firms that desires to
accomplish gain customer's value and competitive advantage. It is considered as the series of
activities that able to contribute the value regarding products more than its cost. Here the
products can go through many challenges with value added phase so that it can serve the
consumers with full and Finalized valued regarded product (Bammann, 2019).
Rolls Roycle is considered as one of the reputed over the 100 years regarding manufacturing
experiences. The firm has gone through different kinds of evolution as well as restructuring
includes both of its management and resources with acknowledges and great significances
its role for accomplishing of its strategic objectives and mission (Scholes, 2015).
Primary activities.
These are the activities that are directly included within producing as well as selling the products
to the targeted consumers. By evaluating the primary chain activities can improves the
performance of the firm Rolls Royce Holding mention below.
Inbound Logistics
It is crucial to develop and maintain strong relationship with suppliers is significant to
store,receive as well as distribute the products. Firm can focus on each and every point of
transformation regarding raw materials to the finished products (Hamilton-Hart. and
Stringer, 2016).
Operations
It involves both service operations and manufacturing activities that able to raises raw materials
and the firm ready the raw materials into the finished products. Evaluation targeting
operational activities is vital for maximizing the efficiency ,improves the productivity,as
well as assuring the competitive benefits sources as well as achieves the growth of the
business objectives (Takata, 2016).
Marketing and sales
This stage focuses on the benefits as well as differentiation points that can be offered products to
the consumers better than its competitors. Producing high quality products at the reasonable
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prices as well as unique features unable to create value until and unless Rolls Royce
holdings plc invests on the sales and marketing activities (Hamilton-Hart. and Stringer,
2016). Here the sales agent as well as marketers plays a crucial roles
Services
The post and pre sales services offered by the firm will also plays an important role within
developing the loyalty of the consumers. Post sales services can be considered by the
modern consumers as they are also as crucial as promotional and marketing activities. The
negative power e-WOM because of the poor support services that unable to undermined
within current advance area I.e. technological advance area (Zahari and Romli, 2019). Here
Firm must evaluating its support activities to avoid damaging the reputation of the brand
and rather than that uses it is as tool that consider as a positive word of mouth because of
timely, quick as well as efficient support services.
Secondary activities
Company's infrastructure
It able to denotes a various activities such as legal matters,financing,accounting,planning and
strategic management. By the help of the effective infrastructure management can enables
Rolls Royce holdings as it can evaluates the value regarding the whole value
chain(Bammann, 2019).
Human resource management
By analysing various HR aspects that includes training, selecting,performance
management,recruiting as well as other management activities. The firm achieves its
objectivities of the cost minimization by hiring and training cost with the help of their
relative return (Mudambi and Puck, 2016).
SWOT analysis
Help Rolls Royce to analyse their strength and weakness to achieve their organizational
goals and objectives(Takata, 2016.) . Swot analysis help them to develop their organizations
vision and work towards improvement of their business.
Strength
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Strength means some products and facilities that help company to achieve their goals and
objectives on time and to improve overall effectiveness of their organizations services. Due to
their brand image that help them to attract large number of customers towards their business.
Provide luxury products and vehicles that help them to develop their overall presence. Superior
design and technology help them to compete with their competitors. They have large number of
luxury variants of vehicles to satisfy their customers wants. Skilled employees working regularly
to develop new technology to manufacture products. And their global presence help to engage
customers easily. Their brand image help them to enter new markets towards achievement of
their organizations goals (Kharub and Sharma, 2017).
Weakness
Help company to analyse factors or areas that need to be improved to maintain
profitability of their organization. High prices of their vehicles make them unaffordable for lower
class to buy(Kharub and Sharma, 2017.) . Their luxury products are developed to provide high
status and dignity to an individual. Designs of their products look similar. Due to high prices of
their products only customers from higher class are able to purchase that reduces overall sales of
their product. They are largely depended on a particular group of customers.
Opportunities
Opportunities help company to analyse market or areas that help them to develop their
business. Company need to take advantage of some factors that increases their overall
profitability. Due to high growth rate in developing economies help them to increase sales of
their products and adapt new market. Due to development in technology that help Rolls Royce to
innovate their services (Hamilton-Hart and Stringer, 2016). Company has opportunity to develop
self driven cars to provide facilities to their customers. Increase in income of consumers
increases their spending on luxury products and growing need for products and services help
them to establish their business.
Threats
Company need to analyse the threats that affect their overall business environment. Need
to analyse factors that effect overall growth of their business. Increase in competition from big
brand like Audi, BMW, Lamborghini decreases sales of their products. Due to their luxury
products they need effective raw materials and increase in prices of raw materials reduces their
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profitability(Aithal, 2016.). Development of different policies towards environment protection
and increase in prices of fuel will effect their overall success.
Task 2
Company need to analyse platforms and strategies that help them to achieve their
organizations goals. Develop different strategies that help them to attract large number of
customers.
Ansoff's matrix
Matrix help Rolls Royce to analyse and develop plans that help in overall growth of their
business. Strategies help company to grow their business and adapt new market that help them to
develop their overall presence and improve presence of their business. Help company to know
the risk and try to overcome those risks (Bammann, 2019).
Market penetration
Market penetration help firm to use products and services in their existing market to
increase their overall market share. Rolls Royce need to develop strategies to decrease prices of
their products to engage new customers(Bammann, 2019.) . Need to develop promotions of their
products and services to attract customers. Need to gain a competitive advantage in market to
achieve their organizations goals. Company need to use all available resources in their
organization to increase sales of their products. Developing business in already established
market help company to reduce overall risk and able to develop their business easily as compare
to new market. Company aim is to engage customers in established market to develop their
overall presence.
Market development
When a company enters in a new market with their existing products and services to
engage large number of customers. Business aim is expand at a large scale to innovate their
services. Rolls Royce is an already established company and wants to develop their business in
an new economy with an existing products and services. Rolls Royce need to develop strategy
after analysis of their customers in an new economy. Company need to enter into a foreign
market with effectiveness of their organization products and services. Need to analyse a new
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market before entering to know effectiveness of market towards their products (Kharub and
Sharma, 2017).
Product development
Companies develop new product to grow their business in already established market to
improve effectiveness of their products(Mudambi and Puck, 2016.) . New product development
help companies to satisfy their customers. Rolls Royce need to develop strategies and invest on
research and development of new product on the basis of their customers preference. Develop
product by analysing their competitors product to gain a market share. Need to make an effective
use of resources to develop and innovate new product(Hamilton-Hart and Stringer, 2016.). Rolls
Royce develops a new SUV name Cullinan to establish their business in an SUV market.
Development of new product in existing market is to satisfy their customers wants.
Diversifications
When a company enters in a new market with a new product. Strategy comes with a risk
on overall development of business. Rolls Royce need to develop new market as well as develop
a new product with effective technology to satisfy their customers. Company has a positive
brand image in market. Company need to develop their business for overall development in
future (Takata, 2016).
Strategic directions
Vision
Rolls Royce company has a vision to develop and innovate their services at a high level.
Wants to attract customers all over the world. Establish their business at a large scale to improve
effectiveness of their services.
Mission
Companies mission is to increase overall sales of their products(Phadermrod, Crowder
and Wills, 2019.) . To provide quality products and services to their customers to improve
effectiveness of their services. Aim to increase profitability of their business.
Culture
Rolls Royce need to know the culture in an new economy to establish their business.
Culture of an individual plays an important role in development of business at a large scale and
to improve effectiveness of their organizations products and services.
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Values
Company need to take care about environment and develop products that have less
impact on overall environment of a nation (Scholes, 2015).
Recommendations
Rolls Royce is one of the leading company wants to develop effectiveness of their
business to engage large number of customers with their products and services. Wants to
establish their business all over the globe and satisfy their customers wants with quality of their
products and services. Company wants to grow their business and for that they need to develop
and innovate new products like innovation in existing models or develop new design for their
vehicles to attract customers (Phadermrod, Crowder and Wills, 2019). Rolls Royce need to
develop electric vehicles that provide an unique experience to their customers it help them to
reduce overall pollution in environment. Need to develop technology in their products to attract
customers towards their organizations products and services. Company need to develop self
driving cars technology that provide facilities to their customers and they are ready to buy
companies products. Development of global market all over the nation help them to expand their
capabilities. Increase in overall income help company to develop new models with effective
technology. Company need to develop different connectivity technology and develop new
features to develop an innovative exp[experience of their customers. Develop products after
analysis strength and weakness of their competitors to innovate a new product for their
customers. Company need to work on their safety measures as increasing concern for health in
an individual help to develop. Need to bring changes in design of their products like their
competitors Audi, Lamborghini. Develop quality of their vehicles. Develop an unique design to
attract young customers. Need to develop business in new segments like SUV, sedan (Gürel and
Tat, 2017).
Rolls Royce need to develop strategies to reduce overall price of their products and
services. Reduction in pricing help them to attract customers from lower level. Develop fuel
efficient product to attract middle level customers. Company need to develop all raw materials
that their vehicles require on their own or to find new suppliers to reduce cost of raw materials.
Implement new technology on the basis of market analysis and for overall effectiveness of their
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products and services. Company need to increase brand loyalty of their customers by providing
them after sales services. Need to implement new policies for their business. Hire skilled
employees that are able to develop new features in their vehicles that are easily engaged with
customers (Kharub and Sharma, 2017).
Conclusion
Business strategy helps in overall development of business and to improve effectiveness
of organization services. It help to develop facilities for business and adapt new technology.
Rolls Royce have an unique brand image that help them to develop their business. But company
need to bring innovation in their vehicles to develop their business in new markets. Pestle
analysis help company to analyse external environment and its effect on their overall
development. External analysis help them to develop business in new market to gran
opportunities for their business. Porters five forces help them to grow their business and to earn a
competitive advantage for their services. Value chain help them to increase effectiveness of their
vehicles. Swot analysis help to identify areas which help in overall development of their
business. And to implement new strategies for their business. Ansoff's matrix help to innovate
new products and services according to their customers wants and desires. Company need to
reduce prices of their products to gain customers from different segments.
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