Rolls Royce: International Marketing Strategy & Country Analysis

This report provides a comprehensive analysis of Rolls-Royce's international marketing strategies, focusing on its potential expansion into Australia and Canada. It utilizes various frameworks and models, including PESTLE analysis, Porter's Five Forces, the CAGE model, the OLI framework, and Hofstede's cultural dimensions, to evaluate the opportunities and challenges associated with international market entry. The report assesses the political, economic, social, technological, legal, and environmental factors in both countries, comparing cultural dimensions and analyzing the marketing mix. Ultimately, the analysis supports informed decision-making regarding market entry modes and strategies for Rolls-Royce's successful global expansion. Desklib offers a wealth of resources, including past papers and solved assignments, to support students in their academic endeavors.

International Marketing
Management

Table of Contents
Executive Summary.........................................................................................................................3
INTRODUCTION...........................................................................................................................4
Overview of the organisation...........................................................................................................4
Critical Evaluation of Models..........................................................................................................4
PESTLE Analysis.......................................................................................................................4
Porter's Five Forces Analysis......................................................................................................6
CAGE Model..............................................................................................................................6
OLI Framework- Market entry...................................................................................................7
Hofstede's model of international culture...................................................................................9
Justification of models to be used.............................................................................................10
PESTLE Analysis of Rolls Royce in Australia..............................................................................10
PESTEL Analysis of Rolls-Royce in Canada................................................................................12
Hofstede's Cultural dimension- A comparison..............................................................................13
Cage model....................................................................................................................................15
Marketing mix analysis- Country comparisons.............................................................................16
Justification of choice of country...................................................................................................17
Mode of entry strategies.................................................................................................................18
CONCLUSION..............................................................................................................................18
REFERENCES..............................................................................................................................19

Executive Summary
The mentioned report was aimed at global expansion of respective business organisation
i.e., Rolls-Royce (A British Car manufacturing company). For instance, it was comprised of
various frameworks and models in order to accomplish the standards and goals of completion of
this particular report assessment. The entire assessment was basically aimed at international
expansion of company in Canada and Australia.

INTRODUCTION
International Marketing Management is determined as process of carrying out
multinational marketing practices in different economic nations. For instance, it includes
development of strategic plan and further execution of plan including strategies for promotion,
pricing, and supplying products in order to fulfil consumer demands. There are various elements
involves in essential process of international marketing management including research, product
localisation, communication, inbound & outbound marketing, etc. Within this report, Rolls
Royce is a UK-based organisation that is taken into consideration for demonstrating different
aspects of this report (Akter and et.al., 2021). This report assessment will be comprised of
significant and insightful information and knowledge regarding International marketing with
context of Rolls Royce. Furthermore, it will further highlight risk factors as well as opportunities
associated with respective organisation in carrying out international marketing practices for
growth and expansion.
Overview of the organisation
Rolls Royce Motor Cars Limited is UK based auto-mobile manufacturer engaged in
manufacturing of luxury motor cars. Moreover, respective business organisation was established
in the year 1904, and has been headquartered in Westhampnett, United Kingdom. The company
operates worldwide by providing customers of richer section of society as motor cars offered by
respective organisation are quite costly as compared to other competitors in the market. The
respective organisation is functioning for the purpose of developing administrative as well as
production facilities that are opened in the year 2003 (Baack, Czarnecka and Baack, 2018). After
this year, the company has expanded its product range in order to involve two-door coupe,
extended wheelbase along with the convertible versions of Phantom Sedan and smaller ghost
four-door sedan, Dawn Convertible, Wraith two-door coupe as well as Cullian SUV.
Critical Evaluation of Models
PESTLE Analysis
It is a tool that is used to analyse the impact of macro-environmental factors that are
influencing the functioning of an industry. This tool helps the managers of Rolls-Royce in taking
strategic decisions and building remedies for the strategic management of the company. The
Pestle Analysis of Rolls-Royce is given as under:

 Political factors: UK Union has strong stability and has less trade restrictions because of
this it provides opportunities for firm like Rolls Royce to trade freely at global level. It
brings positive impact on company as the organisation can expand it business throughout
the world. But impact of pandemic situation in the year 2019 has highly influenced the
performance of company as government of country has made various guidelines such as
social distancing, etc (Cantoni and et.al., 2019). This has resulted in declining the sales of
company as thereby its profitability and efficiency too.
 Economic factors: Economy of UK is globalised and market oriented which brings
positive impact on company such as Rolls Royce. It helps in encouraging business
worldwide which increases sales volume as well as profitability of the company.
However, impact of pandemic situation of COVID-19 such as economic lockdown has
greatly influenced the business operations due to which, the company has suffered loss
and negatively impacted.
 Social factors: Social market of UK is well developed along with fair as well as strong
society. Rolls Royce is a status icon and a brand which is popular across the world by
making positive impact on society. The company is producing the cars by knowing and
understanding the perceptions of its market share. It positively impacts business
operations of company as the sales of organisation will get increase through capturing a
large number of customer-base.
 Technological factors: UK has upgraded technological sector which impacts positively
on ventures like Rolls Royce as the company is using latest technologies that facilitates it
in saving the cost and time of the overall business. It brings favourable influence on
organisation and enhance its productivity and profit margins within the business.
 Legal factors: UK authority has legislations like Health and Safety at Work Act, 1974,
Employment Rights Act 1996, Equality Act 2010 (Cateora and et.al., 2020). Rolls Royce
follows legislations to work ethically which ultimately brings good impact on it.
 Environmental factors: UK environment is pleasant and has temperate climate and
Rolls Royce introduced electric vehicles to reduce pollution level which positively
impacts company's performance as it will attract a large number of customers within the
market place.

Porter's Five Forces Analysis
The model of Porter's Five Forces will help company in analysing the level of
competition within the industry through examining surplus potentiality of industry and therefore
its attractiveness. There are five forces within this model and all these forces are discussed as
below:
 Competition in existing market: This force helps the company in determining the level
of competition within the industry of automobiles. Therefore, there is a high threat for the
organisation as market share can switch to another competitors who is offering the same
products at lower cost in comparison to first company.
 Threats of new entrant: The political system of UK has made certain barriers and
regulations within automobile industry for new entrants. There is a requirement of license
in order to enter into the markets of respective industry. Hence, there is a low threat of
new entrants for company because a large amount is required to enter into the industry.
 Bargaining power of suppliers: There are a large number of suppliers in automobile
industry so if a supplier charge high prices then the respective company has an option of
switching to the another supplier who offers same raw material at lower cost than others.
So there is a low threat of bargaining power of suppliers for company.
 Bargaining power of buyers: Buyers are large in number who are demanding modified
and innovative cars having unique features at low rates. Though, the company has
maintained customer loyalty but its market share can switch to other competitors who are
offering identical products at less cost than respective company (Czinkota and et.al.,
2021). Hence, there is a moderate threat of bargaining power of buyers for company.
 Threats of substitutes: When the price of substitute car products is more than the
company, then the customers will not switch to other company as the organisation will
offer products at less cost with same benefits. Thus, there is a low threat of substitutes for
business.
CAGE Model
This is a model that helps an organisation in making comparison of a possible target
market to the home market of a company on the basis of certain dimensions such as culture,
administration, geography and economy (Farrell, 2020). Rolls-Royce use this model because it
gives insights to company in key differences between target and home markets and permit the

organisation in assessing desirability of that market. The Cage Model of Rolls-Royce is given as
under:
Cultural distance Administrative
distance
Geographic distance Economic distance
Different languages Absence of colonial ties Physical remoteness Difference in income
of consumers.
Different ethnicities Absence of shared
political or monetary
association
Lack of a common
border
Differences in cost and
quality of natural
resources, financial
resources, human
resources, information
technology and many
more. A diverse
workforce will capture
a similar crowd into
Rolls Royce hence
process of recruiting
new people while
managing diversity
ratio will be much
easy.
Different religions Political hostility Lack of sea or river
access
Different social
norms
Government policies
will help Rolls Royce in
enhancing its business
into international
markets.
Size of country

OLI Framework- Market entry
OLI stands for Ownership, Location as well as Internationalisation and as per the OLI
framework, Rolls-Royce is required all the three advantages of ownership, location and
internationalisation in order to get successfully engaged in the Foreign Direct Investment (FDI).
The respective organisation should develop a different strategy of the market entry in case id one
or more these advantages are lacked (Hüttner, 2018). It is a three-tier evaluation model that can
be used by the managers of Rolls-Royce at the time of attempting to ascertain whether it is
beneficial to pursue FDI or not. The OLI framework of Rolls-Royce is given as below:

 Ownership advantage: First of all, Rolls-Royce requires an ownership advantage to
overcome the responsibility of foreignness (İpek, 2020). Ownership is defined to
possession of certain valuable, rare, hard-to-imitate as well as organisationally embedded
resources which permits respective company in having a competitive advantage over
competitors in foreign markets. In context of Rolls-Royce, the company is having
ownership advantage.
 Location advantage: Secondly, there should be some type of location advantage within
the market that a company like Rolls-Royce is trying to enter. Given the well-known
liability of foreignness, UK must offer compelling advantages to make it worthwhile in
order to undertake FDI (Jiménez-Asenjo and Filipescu, 2019). Such advantages can be
conveniently geographical or are exist due to the presence of low wages, cheap raw
materials, skilled workforce and other particular tariffs as well as taxes.
 Internationalisation advantage: In order to select between the FDI and licensing, the
management of Rolls-Royce must look at the last advantage. The administration of the
company is required to consider whether it would be more sensible in getting value chain
activity operated locally along with their own team or outsource it to the foreign country.
Advantages of outsourcing from various countries can involve better skills and low cost
in order to operate value chain activities or effective information or knowledge of
markets of home country.
Hofstede's model of international culture
The model of Hofstede's Cultural Dimensions is used by the organisation for
understanding the differences within the culture across the nations as well as to recognize the
approaches that business is operating across different cultures. The six different categories of this
model is described as under in context of Rolls-Royce:
 Power Distance Index: It refers to power index which is adopted by executives of Rolls-
Royce in order to reduce inequalities as well as managing alterations that empowered the
authority among members of team along with improving organisational performance.
 Individualism versus collectivism: In context to Rolls-Royce, the main focus in on
collectivism where all the human resources are invited to sacrifice their own comfort for
the greater good sake of other people (Kotler and et.al., 2019). The employees also take

part in activities and adopt relevant cultures within the international country that are
advantageous for organisation and workers.
 Uncertainty avoidance index: It shows uncertainty or ambiguity and is used by
organisation for operating its business in international markets. In context of Rolls-
Royce, there is low index level of the employees that shows intense tolerance as well as
acceptance of uncertainty.
 Masculinity versus femininity: Such kind of culture is concerned with femininity as
well as masculinity and is used by Rolls-Royce for developing its performance (Lu,
Scholz and Nguyen, 2018). Within the company, masculinity is followed by managers of
the organisation that can help in enhancing the business performance and concentrates on
wealth-building and material achievements.
 Pragmatics versus normative: Within Rolls-Royce, pragmatic approach is preferred by
the management of the company in order to concentrate on future and includes delaying
success of short-term for meeting success of long-term. This puts focus on perseverance,
persistence as well as growth for lomg-term.
 Restraint versus indulgence: In context to Rolls-Royce, the culture of indulgence is
followed by the administrators of the company in which it indicates that the society
permits comparatively free satisfaction in relation to enjoy life as well as have fun.
Justification of models to be used
From above explanation of the different models, it is justified that the managers of Rolls-
Royce are required to develop and frame effective business strategies for improving the
performance of the organisation. The company should consider political, economic, social,
technological, legal as well as environmental factors at the time of operating its business for
understanding wider market in which it is operating. In relation to Porter's Five Forces model, it
is justified that the company can gain competitive advantages through analysing the level of
competition within the industry and making strategic decisions. From the CAGE model, it can be
justified that the managers of Rolls-Royce are required to analyse cultural, administrative,
geographical as well as economic factors for comparing its own market functions with the
marketing functions of foreign organisations (Mansour, 2021). In context to Hofstede's cultural
dimensions, it is also justified that the company can easily understand the differences in the
culture of different nations and their impact on the business performance. Overall, it can be

justified that the company can effectively operate its business in international markets through
developing effective business strategies and working in an ethical environment.
PESTLE Analysis of Rolls Royce in Australia
 Political Factors: The essential factor of political stability plays a crucial role in
influencing or affecting operations and activities carried out by business organisations.
For instance, Parliamentary democracy regulated in Australia facilitates in providing
respective economic nation with Political stability (Nes, 2018). In addition to that,
business organisations always look out for economic nations with political stability as it
facilitates in stable business environment as well as eliminating uncertainty in
environment.
 Economic Factors: The respective economic nation has been facing a downfall in
economic growth by 7% in the quarter of June 2020 (Reserve Bank of Australia, 2022).
For instance, arise of these situations have been resulted in a barrier to crossings of
international border. The recent rise of this conflict could contribute negative values
towards economy with degradation of existing scenario. Therefore, this factor or aspect
could lead to negative impact upon operations and activities carried out by respective
business organisation.
 Social Factors: As the luxury motor cars offered by respective organisation are very
expensive, target customer base of Rolls-Royce is richer and wealthy section of people in
society. For instance, preferences and behaviour of customers in society is inclining
towards fulfilment of social status with purchase of luxurious and expensive products and
services. Moreover, this factor of increasing preferences of people towards purchase of
expensive products will result beneficial for respective business organisation in attracting
their target customer base.
 Technological Factors: The technological environment within Australia is highly
upgraded and developed which will help the managers of Rolls-Royce in performing its
business operations within the country. As the company is already using latest
technologies and machines in order to conduct business transactions, it will bring positive
impact on the organisation.
 Legal Factors: Within Australia, the legislative system of the country has framed The
Competition and Consumer Act 2010 which is a national law that facilitates the

businesses in regulating fair trading process within the country (Oyewole, 2018). Rolls-
Royce must have to consider and adhere this law in order to operate its business functions
in an ethical way. This will enhance the brand image of the company within the country
and will also increase its productivity and efficiency.
 Environmental Factors: The major environmental law that is framed by the government
of Australia is The Environment Protection and Biodiversity Conservation Act 1999.
When Rolls-Royce will operate its business in Australia then it has to follow this
environment law as it will help the company in protecting the environment of the country
through developing the electrical vehicles that emit less pollution to the environment.
PESTEL Analysis of Rolls-Royce in Canada
 Political Factors: The respective economic nation has been considered among least
corrupted economic nations in the world (Ozturkcan, 2019). For instance, according to a
survey of World population Canada has been ranked 12 for least corrupt countries which
is quite a higher rank among total of 180 countries. This positive aspect of respective
economic nation will facilitate respective organisation in carrying out their business
operations without any unethical practices due to corruption. Furthermore, with low
corruption rate in respective country, Rolls-Royce will be able to attain efficiency as well
as minimising cost incurred in carrying out operations and activities (Least Corrupt
Countries 2022, 2022).
 Economic Factors: In order to expand business units in another economic nation, it
incurs huge cost which is needed to be raised from that particular economic nation. For
instance, financial markets in Canada are highly efficient which results in a positive
aspect for respective organisation to look out for further expansion of business unit. In
addition to that, Financial market of respective country is determined one of the largest
contributor towards GDP of Canada (Sangra, 2020). Furthermore, efficient financial
market in respective country will facilitate Rolls-Royce in upright accumulation as well
as allocation of funds.
 Social Factors: The level of education among people in an economic nation is an
important factor of macro environment which impact upon operations and activities of a
business organisation. Referring to OECD, Canada is among most educated economic
nations with maximum educated population. In addition to that, this aspect will result in