Rolls-Royce Holdings PLC has grown from an almost bankrupt corporation in the 1960s to one of the major aero-engine manufacturing companies that produce luxury cars and provide power systems for ships, aircraft, and land applications. Currently, the company has a global footprint in the provision of the power systems and serves 45 of the 50 major airlines. The growth of the company from a loss-making and near-bankruptcy entity to an internationally successful company shows the effectiveness of its strategies since the ‘60s. Its growth began with a change of its corporate strategy and placing its emphasis on the improvement of process efficiencies. Rolls-Royce Holdings continues to record high profit efficiency and growth/expansion into new foreign markets, which form a greater percentage of its market share. Analyzing the case using the Hayes and Wheelwright model helps in outlining the operations contribution, the order winners, and order quantifiers in its main markets, and importantly, informing recommendations for effective operations strategy for Rolls-Royce’s future.
Slack and Brandon-Jones (2018) highlight the Hayes and Wheelwright four-stage model of operations strategy, whose application in the case of Rolls-Royce Holdings helps in identifying the corporation’s operations in the 1960s and now. Rolls-Royce was experiencing various challenges that resulted in limited to no growth or expansion. The company faced difficulties in penetrating new markets or expanding its operations. The company was on the verge of bankruptcy as a result of operational, profit, and process inefficiencies. The first stage (internally neutral) of the Hayes and Wheelwright model asserts that a company focuses on minimizing the negative impact of operations to remain afloat and overcome the challenges (Slack & Brandon-Jones, 2018). Rolls-Royce objective in the 1960s was to minimize the negative impact of its operations, which aligned with Hayes and Wheelwright’s internally neutral stage, where a company regularly underperforms in comparison to market requirements and makes mistakes that result in low-quality products and services, which further affect its reputation. Now the company lies within the fourth stage (externally supportive) of the Hayes and Wheelwright model, where, as described by Slack and Brandon-Jones (2018), the corporation views the operations function as fundamental to the provision of competitive success. Rolls-Royce operations currently focus on the long-term and identify possible changes in supply and markets as described in the fourth stage. While in the 1960s the operations resulted in losses, currently, the operations strategy is focused on improved competitiveness and the achievement of a competitive edge and a greater market share. The improvement can be attributed to effective operations and corporate strategies (Wheeler, 2010).
Rolls-Royce’s growth resulted in improved market share over the years. The growth and expansion were achieved through the effective implementation of strategies such as the differentiation of products, quality improvement, and matching of market requirements with the corporation’s capabilities, among others. Currently, Rolls-Royce produces, sells, and services its products. Additionally, the development of new engine designs and new engines for aircraft and ships resulted in the attraction of new airlines and customers for the different services/products. The order winners include the complex and new efficient designs that improved efficiency in fuel use, addressed the issue of wear and tear adequately, provided in-service remote engine monitoring, and guaranteed improved quality, which enhanced Rolls-Royce’s competitiveness. Other order winners include customer-focused services like pay-by-the-hour service, among others. Further, the order quantifiers were the spares, blades, after-sales services, and in-service remote engine monitoring, among others (Wheeler, 2010; Slack & Brandon-Jones, 2018).
The future growth and expansion of Rolls-Royce Holdings PLC depends on the corporation’s adoption of effective strategies and aligning its capabilities with the market requirements. While the company has adopted new technologies and embraced innovation, research and development, and effective order-winning strategies, there is a need for integrating the approaches into corporate and operations strategies. The approach will guarantee an improvement in process efficiencies, the quality of products and services, and the manufacturing of products that meet the market and customer needs. Additionally, the company should develop strategies that distinguish its after-sale services from those of competing manufacturers and further develop a follow-up strategy that will continue to promote client satisfaction and the quality and efficiency of the engines and other products after use (Slack & Brandon-Jones, 2018; Wheeler, 2010).
References
Slack, N., & Brandon-Jones, A. (2018). Essentials of operations management. London: Pearson UK.
Wheeler, J. C. (2010). Rolls Royce. New York: ABDO Publishing Company.
