Power-by-the-hour: the role of technology in reshaping business strategy at Rolls-Royce

Abstract

There is a recognised trend of manufacturing companies offering not only products, but also services and even complete solutions to business problems. Research has highlighted economic, market demand and competitiveness factors as responsible for the reshaping of business strategies that this has involved. This study analyses the extent to which another factor, technology, has been a significant factor in the switch from product oriented to service-oriented strategies. A case study of the aero engine manufacturer Rolls-Royce is used to analyse the impact of technology, which is found to have led manufacturers to reshape their business strategies. The study finds that developments in one technology in particular, namely digital electronics, have been a powerful enabling factor facilitating the implementation of service strategies. This provided original equipment manufacturers like Rolls-Royce with a competitive advantage relative to conventional service providers, by enabling them to acquire new knowledge management capabilities.