Abstract

Rolls-Royce, one of the largest aircraft engine manufacturers in the world had been growing consistently since the 1990s until 2014 and was perceived as one of the flagship companies of the UK. The company issued its first profit warning in a decade on February 13, 2014. The declining growth of the company since 2014 was blamed on slow defence spending, deteriorating global markets, the oil price crash and the failure of Rolls-Royce to slowing demand for its best selling engines. Warren East (East), appointed CEO of Rolls-Royce in July 2015, had been given a mandate by the management to turn the company around. By July 2016, East had implemented job cuts and dividend cuts as part of his turnaround plan. East faced the challenge to turnaround Rolls-Royce to growth trajectory as quickly as possible, persuade investors to trust his policies and convince the board members of the company to continue with his turnaround plan without splitting the company.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Learn about challenges faced by aircraft manufacturing business of Rolls-Royce
• Understand the challenges faced by Warren East, CEO of the company in the process of turning around the company
• Analyze the factors that led to the downfall of the company after two decades of consistent growth
• Analyze the advantages and disadvantages of diversification of the business for Rolls-Royce
• Critically analyze the situation of the company prepare a note East to help him convince the board to avoid splitting of the company

Keywords

Crisis Management,Quality Issue,Communication Strategy,Textile Industry,Welspun,Target