Rolls-Royce

Founded

1904



Overview:
Rolls-Royce was a British luxury car and later an aero engine manufacturing business established in 1904 by the partnership of Charles Rolls and Henry Royce. Building on Royce's reputation established with his cranes they quickly developed a reputation for superior engineering by manufacturing the 'best car in the world'. The First World War brought them into manufacturing aero engines. Joint development of jet engines began in 1940 and they entered production.

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Industries:
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Transportation
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Automotive



Similar firms (based on pattern co-occurrence):
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2 shared patterns
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2 shared patterns
Business Model Patterns:

Experience Selling

How they do it: Rolls-Royce, sold via luxury dealerships, legitimizes their high sticker-prices – the average vehicle price is over $600,000 – with the image and positive associations of the brand. Promotion activities are similarly aligned with this highly exclusive approach.

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Performance-based Contracting

How they do it: The aerospace manufacturer Rolls-Royce achieved success in the 1980s with its ”power-by-the-hour” model for its aircraft engines. What was billed to the customer was not the price of the aircraft engine – the customers did not purchase the engine, and Rolls-Royce kept ownership and maintenance obligations. Rather, the customer was billed for every hour of performance of the engine. This business now accounts for 70% of Rolls-Royce’s revenue.

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Ultimate Luxury

How they do it: In 2016, Rolls-Royce only sold a total of approximately 4,000 vehicles. These low production quantities reflect in very high margins and with a very high average price of about $600,000. The customers are attracted by the extremely high quality and exclusive branding. A marketing survey in 1987 showed that only Coca-Cola was a more widely known brand than Rolls-Royce.

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