Unformatted text preview: Rolls Royce Case Study Rolls Royce: the most powerful symbol of British manufacturing.
● ● A British MNE & the
world's second biggest
manufacturer of large
About 85% of its
revenues are derived
from abroad Context Main Issue The jet engine industry
offered fierce competition
& no company could
maintain a technological
edge. The challenge of creating
and maintaining a
competitive advantage in a
highly evolved, global
Diamond Firm Strategy, Structure & Rivalry
● Conservative Government nationalising the company in 1971. ● In 2001, the British taxpayer lent £250m to Rolls-Royce to help develop bigger jet engines; in 2006 it
agreed to give grants of £47m to a group led by Rolls-Royce to design an environmentally friendly
engine. ● However, other nations have been far more generous & the lure of subsidies and other incentives
from foreign governments has become increasingly strong. Demand Conditions
● Ignited by British Military demands in 1914. ● Sustained by ‘local’ demand (British Airways and Airbus). ● Demand evolved from international airlines (Air China, Qatar Airways, Emirates). ● To better compete in the international playing field Rolls-Royce had to
differentiate themselves to create demand for their product. ca
wo skil n se
rkf led cto
) stry Aero engine
industry indu Ed
u R&D Raw
m Related and
Supporting Industries Factor Conditions
● ● Basic factors
—— Institutional resources light - touch regulations —— Capital resources tax - breaks —— Human resources foreign talent Advanced factors
—— R & D bundle service What we have learned.
Rolls-Royce's embrace of globalisation remains the chief cause of its success &
an essential precursor to its innovations, which begs the question:
How important is taking a national advantage?
National Advantage ---> Consistent Innovation ---> International Success Questions
What do you think was the foremost factor that contributed to Rolls Royce’s
Should Rolls Royce move its manufacturing facilities abroad in search of
incentives & subsidies? Why/Why not?
What ethical considerations might there be when blending services and
manufacturing as Rolls Royce have?
How is having a National Advantage key to an organization's ongoing
International Success? Thank you. ...
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