Thomas Friedman refers to the car company, Rolls-Royce in his book as an example of a company that needed to take advantage of a flattened world. I remember hearing about Rolls-Royces when I was a child. My parents told me that it was the height of motor vehicle technology. That was probably 15 years ago. Today, while they are still known as a luxury brand, there are many automobiles that are superior in price, design, and amenities. I have seen it replaced by the Bentley and Maybach as the vehicles of choice for celebrities and rappers. However, there are few other brands that hold the mystique of a Rolls-Royce.

Because of the extreme price and level of dedication it takes to manufacture these automobiles, there is obviously a very small market. Few people can afford a vehicle costing over $200K, and of those that can afford the price, many people choose to purchase something different. It is for this reason I believe it was wise for the company to spread throughout the world. Think of the people in the UK that may purchase a Rolls-Royce. Few people have the money, fewer people want to spend the money on a car, and fewer still want to spend the money on a Rolls-Royce. Then, think of those people who want one, how many of them already own that brand? This is not a car one replaces every few years. Their price tag and durability ensure that the same people will not be buying a new car very often.



Clearly, the market for extreme luxury automobiles is not very large in the UK. Rolls-Royce has been exporting their fine automobiles for many years, but that can also only reach so far. The company needed to find some way to ensure they would not run themselves out of business.

Before the cars became as popular as they are today, Rolls-Royce was manufacturing airplane engines during the World Wars. I flew to Belize over spring break, and the engines powering the aircraft were manufactured by non other than Rolls-Royce. According to Friedman, the manufacture of engines for applications other than automobiles accounts for about 60% of business (particularly for military purposes). This is one of the smart business decisions that helps the company remain in business.

The main reason it is beneficial for Rolls-Royce to spread out is it enables the operation be closer to the customer. By placing representatives and facilities near the customer, it cuts down on company costs (by not having to ship replacements parts overseas). Rolls-Royce has customers in areas all over the world. The royal family in Thailand are transported by Rolls-Royces, Chinese businessmen prefer them, American celebrities are seen driving them, and of course many European people enjoy this fine automobile. With business spread throughout the globe, there needs to be some way for the customers to feel connected to the company.

A world-wide presence can also benefit the consumer because mechanical technicians can be closer to repair and maintain the automobiles. The complex nature of the vehicle makes it near impossible for anyone but a certified technician to perform work on the automobile. Wealthy individuals do not want to drive their car may miles to see a factory trained technician when something is wrong. It makes the customer happy and ensures good business to make everything as convenient as possible.