The Sources Of Competitive Advantage Of RollsRoyce Plc
Recognizing the numerous changes in the businesses’ market environment, this paper will complement value chain analysis with a method introduced by Shawn Cartwright, the value web analysis. It should be noted that this tool brings into consideration the analysis of the competitive advantage of dotcoms or firms whose operations are conducted online or whose brick and mortar strategies are complemented by the online presence (Cartwright and Oliver 2000).
This report will be organized as follows. The first section will take a look at the operations of Rolls-Royce Plc. A brief organizational profile will be presented together with the company’s identified core competencies. The paper will then evaluate Rolls-Royce’s competitive advantage in light of the value chain and the value of web analysis. The second section will also evaluate Tesco Plc in the same manner. This paper will conclude with a comparison and contrast of the previously identified competitive advantages.
Rolls-Royce is currently the world’s second-largest airline engine manufacturer behind the General Electric Aviation.
Aside from aero-engine, the company is also involved in other industries like defence, marine, and energy markets. The business organization traces its origin in 1971 and was founded by Henry Royce and CS Rolls. With its humble beginning, it has now ascended in the global business marketplace with its cutting edge technology and diverse product offerings. The company is not just a provider of high-quality products but also offers unmatched after sales service to its clients. It’s market base spans over 120 countries around the globe, becoming a significant supplier of the engine to important customers worldwide. Also, in order to complement its product, Rolls-Royce has established an online presence through Aeromanager in offering aftermarket services.
The success of Rolls-Royce in the global aero-engine industry is attributed to its core competencies. A core competence, according to Prahalad and Hamel (1990) is something that a firm can do well and meet three specific conditions: "it provides customer benefit. it is hard for competitors to imitate, and it can be leveraged widely to many products and market." A company’s core competencies are the capabilities which the company needs in order to build a competitive advantage.
In the case of Rolls-Royce, its core competency is apparent in the production of the engine. It should be noted that the expertise of the business organization in the creation of aero-engine is applied to a wide range of industries where it operates such as defence, marine, and energy.