Global company providing
Rolls Royce is a global company providing power for land, sea and air. It employs some 40,000 people in more than 30 countries, including over 25,000 in the UK, 5,000 in the rest of the Europe and over 8,000 in North America. The company has a balanced business portfolio with leading positions in civil aerospace, defence aerospace, marine and energy markets. With annual sales of around 5 billion and a forward order book of nearly 17 billion, its technology is applied over a wide range of products that generate high-value services throughout their operational lives.
Rolls Royce is a worldwide organisation that deals in many areas; because of this it is a Public Limited Company. There are both benefits and drawbacks to been a Public Limited Company. As you are selling shares on the stock market, the company gets a huge capital injection allowing the company to expand quicker and invest in new products. In Rolls Royce’s case it allows them to use high quality machinery and materials to produce expensive goods such as motor vehicles and aeroplane engines.
Within a Public Limited Company such as Rolls Royce there is also a limited liability and continuity as their turnover is huge per annum. Been on the stock market also can have a positive effect on your publicity and suppliers are more willing to offer you credit as they can see how secure your finances are. However a Plc. has its drawbacks, as the company is sold on the stock market it therefore entitles the shareholders to dividend at the end of each financial year.
Therefore any profit made has to be paid out amongst the shareholders. Also the shareholders as they have financed the company believe they have a part to play in running the company. This leads to a divorce of ownership and control, leading to decisions taking a long time to be made. A problem with having your business on the stock market at certain points the stock market may fail losing the company shareholders. It is also hard to keep information from competitors as a large amount of financial information is published for shareholders to look at.
For the year 2002 Rolls Royce had to set up a restructuring programme after September 11th 2001. It meant they had to rethink there strategy. Rolls Royce’s main of objective is to be the best. In its annual press release it mentions that the company invests in technology and capability that can be exploited in each of these sectors to create a competitive range of products. This is clearly an objective of the Rolls Royce chairman who wrote the article. It is essential for a company like Rolls Royce to ensure their customers as well as their shareholders what their intentions are. These objectives shown in the review are backed up with figures.
It is known as Quantitative. Apart from this the company believes that customer satisfaction is essential. In the Chief Executive statement he mentions due to customer relations which can last up to 25 years or more that the aftermarket services of Rolls Royce are essential to there strategy. Its target was to get a total a total of 40% of sales revenue from aftermarket service. Service revenues have grown and are expected to grow even more due to customer relationship.
The Chief Executive also mentions how its long term aim was completed after floatation in 1987, they have know established themselves as a major, global competitor with a broad range of technology power and propulsion products and services. There mission statement is Rolls Royce offers customers’ business solutions from superior power systems and services. Another important aim or objective of Rolls Royce is to help the environment. The company itself has set up a program to stop as much harmful waste damaging the environment. When making objectives for a business you can use the anagram SMART:
S = Specific M = Measurable A = Achievable R = Reliable T = Time based. As Rolls Royce is a Plc they have to publish there figures so shareholders and potential investors can see them. This is why they come up with strategies at the beginning of each year. It is known as a robust business model.