Rolls-Royce:The Turnaround Challenge
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Case Code: BSTR505 Case Length: 8 Pages Period: 2014-2016 Pub Date: 2016 Teaching Note: Not Available |
Price: Rs.400 Organization : -- Industry: Aircraft Manufacturing Countries: United Kingdom Themes: -- |
Abstract Case Introduction
Warren East (East), CEO of Rolls-Royce Holding PLC (Rolls-Royce), was pondering over how to convince the board to continue with his turnaround plan without splitting the company. He believed the diversified portfolio was good for the company and that Rolls-Royce could sail through turbulent times. 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. He expected to maneuver Rolls-Royce back to the growth trajectory by 2017.
Rolls-Royce, headquartered in the city of Westminster, London, UK, was one of the largest aircraft engine manufacturers in the world. The company had been growing consistently since the 1990s until 2014 and was perceived as one of the flagship companies of the UK. Rolls-Royce employed around 54,100 people in 2014 (Refer to Exhibit I).
On February 13, 2014, Rolls-Royce issued its first profit warning in a decade. The company anticipated a 15 to 20 percent reduction in defense revenue......
Exhibits
Exhibit I: Total Employees Trend
Exhibit II (A): Income Statement (Consolidated)
Exhibit II (B): Balance Sheet (Consolidated)
Exhibit III (A): Segment-wise Contribution to Revenue
Exhibit III (B): Segment-wise Contribution to Net Profit
Exhibit IV: Dividend Trend at Rolls Royce
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