Subject category:
Strategy and General Management
Published by:
IBS Case Development Center
Length: 12 pages
Data source: Published sources
Topics:
Rolls-Royce; Global aero engine market; Civil aviation industry; Divestments; Customer driven strategies; Competitive strategies; Aircraft service and maintenance; Battle of Britain; Trent engine; Mergers & acquisitions (M&A); John Rose; 1977 bankruptcy; Cost cutting strategies; Total care; GE (General Electric Inc) and Pratt & Whitney
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https://casecent.re/p/66448
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Abstract
Rolls-Royce, the world''s number two commercial airline engine manufacturer, started as a car-maker and then diversified into aero-engines and power generation machinery businesses. With increasing demand for aero-engines, the company divested many of its businesses to increasingly focus on aero-engine manufacturing. However, faced with intense competition from companies like General Electric Inc and Pratt & Whitney, its revenues started declining. This prompted the company to enter the growing market of aircraft services and maintenance where the margins were usually 30%, much above the margins from engine-sales. By 2005, due to increased customer focus, servicing revenues contributed 59% of the total sales of Rolls-Royce. The case, while highlighting the growth of Rolls-Royce in the global civil aerospace business, offers scope to discuss its customer-driven competitive strategies for its growth in the future.
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Abstract
Rolls-Royce, the world''s number two commercial airline engine manufacturer, started as a car-maker and then diversified into aero-engines and power generation machinery businesses. With increasing demand for aero-engines, the company divested many of its businesses to increasingly focus on aero-engine manufacturing. However, faced with intense competition from companies like General Electric Inc and Pratt & Whitney, its revenues started declining. This prompted the company to enter the growing market of aircraft services and maintenance where the margins were usually 30%, much above the margins from engine-sales. By 2005, due to increased customer focus, servicing revenues contributed 59% of the total sales of Rolls-Royce. The case, while highlighting the growth of Rolls-Royce in the global civil aerospace business, offers scope to discuss its customer-driven competitive strategies for its growth in the future.