Abstract

The case discusses how, over the years, after-sales service has grown to be an important component of the business portfolio of Rolls-Royce plc (Rolls-Royce), a leading manufacturer of aero engines. It begins with the early history of the company and describes its foray into automobiles and aerospace. The case also discusses the company’s bankruptcy in the early 1970s and its subsequent turnaround. It describes the various after-sales services offered by the company, and mentions the benefits and disadvantages of giving so much importance to after-sales service, as a source of revenues as well as a differentiator for its products. The case concludes with a brief discussion on the challenges faced by the company and its future outlook.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Understand the importance of after-sales service, both as a source of differentiation, and as a steady source of revenue. Identify the advantages and pitfalls of being heavily dependant on after-sales service to drive sales and earn additional revenues.

Keywords

Rolls-Royce, Service, Rolls-Royce, Civil Aero engines, Power by the hour, Aerospace industry, After-sales service, Airline industry, Differentiation strategy, Product line extension, Diversification