Issues in Global Business and Strategic Concepts

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This study provides detailed analysis on how Rolls Royce faced issues in implementing global strategy in civil aerospace division. It also provides recommendations on how to overcome these issues and improve their global strategies for regaining international glory. The study focuses on the background of the company, current trading environment, issues faced by Rolls Royce, civil aerospace global strategy and its future scopes, current market share of Rolls Royce and effective leadership style.

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Running head: ISSUES IN GLOBAL BUSINESS AND STRATEGIC CONCEPT
Issues in Global Business and Strategic Concepts
Name of the Student
Name of the University
Author’s Note

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1ISSUES IN GLOBAL BUSINESS AND STRATEGIC CONCEPT
Executive Summary
This specific study has provided deep insight on how Rolls Royce after facing issues in
implementing global strategy in civil aerospace division. This organization has already occupied
a predominant place in the realm of aviation craft industry. After identifying a problem in Trent
1000 of airline the company has faced immense challenges in maintaining their organizational
glory. In addition, the sudden announcement of 4000 job cut within the organization had
rendered a catastrophe for achieving business success. The study has provided detailed analysis
on how the business experts can increase their market share. Some of the major
recommendations have also been provided in this study in order to evaluate on how the
organization can overcome these major issues and improve their global strategies for regaining
international glory.
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2ISSUES IN GLOBAL BUSINESS AND STRATEGIC CONCEPT
Table of Contents
1. Introduction:................................................................................................................................3
2. Background of the company and its current trading environment:.............................................4
3. Issue faced by Rolls Royce especially in civil aerospace division:.............................................5
4. Civil aerospace global strategy and its future scopes:.................................................................7
5. Current market share of Rolls Royce:.........................................................................................9
6. Five force analysis and improvement strategy on five forces:..................................................11
7. Strategy for increasing the rate of market share:.......................................................................13
8. The reasons of business expansion of Rolls Royce in other country with proper justification:14
9. Recommendations:....................................................................................................................14
10. Conclusion:..............................................................................................................................14
Reference List:...............................................................................................................................16
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3ISSUES IN GLOBAL BUSINESS AND STRATEGIC CONCEPT
1. Introduction:
The study has identified some of the major issues of Rolls Royce while expanding global
business especially in the Aerospace sector. It has provided in-depth overview about the
importance of global strategic concepts implemented within the organization to overcome
organizational issues. Established in the year 1884, Rolls Royce is one of the most prestigious
engineering companies occupying a predominant place in the market of London. In quest of
expanding widespread wings in various geographical boundaries Rolls Royce always searches
for merger and acquisition. Rolls-Royce has won a significant boost after budget airline
Norwegian agreed a $2.7bn (£1.9bn) deal to buy engines from the company (Rolls-
royce.com 2018). Providing superior quality of products in affordable price range is the unique
selling point of the organization. The business experts by implementing participative form of
leadership style at the workplace intend to maintain a friendly environment within organization
in order to get effective services from the employees. Especially in the department of aerospace
it is observed that Rolls Royce has gained immense business image and popularity by providing
effective services to the customers.
The entire business cycle of Civil Aerospace department is constituted with five major
stages that include cutting edge technology, dynamic technology management, compelling
customer proposition long term value creation and resilient business. The company aims to build
strong heritage in mechanical engineering in quest of producing electro mechanical chain and
hybrid power system (Ellis 2015). However, while expanding their regional business wings in
the international market the organization has faced innumerable issues in the department of Civil
Aerospace especially.

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4ISSUES IN GLOBAL BUSINESS AND STRATEGIC CONCEPT
This very specific study has provided detailed overview about the key major issues that
Rolls Royce have faced in order to while making global strategy and technical barrier. By
making effective five forces of Porters’ the study has critically evaluated on how Rolls Royce
has to face threats from its competitors and substitutes in order to run the entire process of
business effectively. By identifying the issue the study has focused to provide some of the major
recommendations on how to overcome the challenges of Rolls Royce in making global strategy
and regain their organizational glory and reputation (Dobbs 2014). In addition, the study has also
focused in making critical evaluation on the reasons of business expansion of Rolls Royce in
other country. Apart from Britain if the country needs to expand its wide range of business in
other regional boundary it should be Vietnam where Rolls Royce can expand its widespread
wings.
2. Background of the company and its current trading environment:
As already mentioned Rolls Royce is one of the most remarkable engineering companies
occupying a predominant place in the market of London (Yunna and Yisheng 2014). This
particular brand has already established its entire business wings in Africa, America, Asian
Pacific, Europe and Middle East. Among most of the Asian pacific zone Azerbaijan, China,
India, Indonesia, Japan, Malaysia are the most prominent. However, it is observed that Roll
Royce is still intending to have new market entry based on which the company can easily drag
the attention of international customers (Indiatsy et al. 2014). Airline, Business Aviation,
Helicopters are the three prime stakeholders of Rolls Royce. Among three Airline $2.7bn
(£1.9bn) has made the deal to buy engines from the company due to which Roll Royce has
achieved a huge success. However, Trent 7000, Trent 1000, Trent XWB, Tend 900, Trent 700,
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5ISSUES IN GLOBAL BUSINESS AND STRATEGIC CONCEPT
Trent 500 are the core products that are delivered to Airlines on behalf of Civil Aerospace
department.
However, this very specific study has focused to make detailed overview on how Airlines
has faced innumerable challenges with Trent 1000 engines as a result of which the company has
decided to render huge job cut as a consequence (Porter and Heppelmann 2014). However, this
specific incident has rendered immense disaster in maintaining entire business image and
reputation. As a result, the current trading environment has become in turmoil situation based on
which the business experts are unable to gain customer loyalty.
3. Issue faced by Rolls Royce especially in civil aerospace division:
Rolls Royce has received a complaint that Trent 1000 engines is getting affected with its
compressor durability. The primary purpose of making this engine is fast services than
expectation. In order to fulfil this need Trent 1000 engines have failed to meet its sustainable
compressor durability (Sassen 2016). However, it has become a major problem in the realm of
aviation industry due to which Rolls Royce has lost customer loyalty to some extent. After
finding the issue within “Package B version” with compressor durability, Rolls Royce has tired
to fix up the flaw by launching “Package C”. However, the issue faced by the British Airways
and Norwegian cannot be avoided even after launching the next version of Package C in the
market (Lasserre 2017). Aircrafts powered by trent1000 was compelled to be grounded due to
compressor issue. Due to the sudden cancellation of leading flights such as Airlines, Virgin
Atlantic the entire transportation system has become demolished. As a result, it has become a
major challenge for international business experts and other international visitors as well.
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6ISSUES IN GLOBAL BUSINESS AND STRATEGIC CONCEPT
Due to the raise of this kind of sudden problem the economic strength of the company has
faced a major downfall (Taylor et al. 2014). In this situation, the organization has announced for
4,000 job cuts for this industry which resulted a massive catastrophe on the overall reputation of
the organization. Large number of employees had to lose their job due to this sudden mechanism
issue raised within Trent 1000. In this very specific condition the spokesman of Rolls Royce has
stated in an occasion “We are proposing to move to a considerably simplified staff structure,
with fewer layers and greater spans of control across the group” (theguardian.com 2018).
The major two issues that are identified within the business sector of Civil Aerospace
department include compressor durability issue of Trent 1000 and job cut issue due to its
consequence.
The first issue faced by the organization has left a major impact on the overall customers’
purchasing behaviour of their products and services. Customers who intend to use the services of
Airlines for maintaining their business deal or any other purposes have showed their reluctant
attitude in purchasing services from Airlines (Murray, Skene and Haynes 2017). In addition, due
to the frequent cancellation of flights the travellers had to go through immense difficulties in
maintaining their regular life. Automatically, the brand reputation has been immensely hampered
due to this kind of inconvenience. This very specific study has focused to make detailed
overview on how employees after the decision of sudden job cuts have faced severe challenges
in leading their life effectively. The rate of unemployment status in the aviation industry has
raised a major concern (Smith 2014). The business experts were not able to deliver the services
to the customers within affordable time due to the lack of sufficient workforce strength. Rolls
Royce had to be answerable as they were not maintaining corporate business ethics while
running a successful brand so effectively in the market of aviation industry. As per corporate

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7ISSUES IN GLOBAL BUSINESS AND STRATEGIC CONCEPT
business ethics the organization should serve a notice period before discharging a specific
employee from the business services (Nummela et al. 2014). Sudden announcement of job cut is
a sever decision from Rolls Royce due to which the company has to be answerable in front of
media personalities. These two specific issues have left major negative impact on the overall
business growth of Rolls Royce. As a result, both the internal as well as external stakeholders are
getting affected.
4. Civil aerospace global strategy and its future scopes:
After facing these kinds of major issues mentioned already in the previous part, the
organization such as Roll Royce has decided to implement effective global strategies in quest of
fulfilling the future challenges (Dragoni et al. 2014). While evaluating the global strategy of
Civil Aerospace it is observed that the organization tends to follow four major strategies which
include champion electrification, vitalize existing capabilities, reinvent with digital and
transformation of business. This specific part has also decided to analyze the future scope of
the global strategy that has been formed for overcoming the global issues that Rolls Royce has
faced due to mechanism issue as well as sudden job cut issues.
Champion electrification:
The key statement of this business strategy is to invest in new power solutions for long
term success. As per the belief of business experts of Rolls Royce long term business strategy is
the ultimate way to maintain business sustainability (Gandini, Gennari and Cassano 2014).
Therefore, the organization while providing effective services to the customers would have to
focused on maintaining superior quality of machines.
Vitalize existing capabilities:
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8ISSUES IN GLOBAL BUSINESS AND STRATEGIC CONCEPT
Vitalize existing capabilities believes that the organization has to develop their
technology up to next generation so that the product can meet the needs and demands of current
trend of market. The organization is investing momechanical products for ensuring that they
provide the safest and most competitive solutions for the customers (Engert, Rauter and
Baumgartner 2016). This very specific strategy would help the customers in gaining competitive
advantages from the other competitors. Automatically, the competitors would be receiving
immense market threats due to its product quality as well as service flexibility.
Reinvent with digital:
This particular strategy has implied that Rolls Royce has rendered digital solutions in
order to provide effective services to the customers. With the help of digital solutions the
customers by sitting at their own workplace can get necessary information regarding the services
(Demoly et al. 2014). On the other hand, people belonging to various geographical backgrounds
and attitudes may not be flexible in visiting the stores of Rolls Royce. In this kind of situation,
digitalisation can enable the customers in getting detailed overview about products and services
by using their Smart devices. With the help of using mobile application the customers can
directly access the services of Rolls Royce.
Transformation of business:
Business transformation strategy followed by the civil aero scope department of Rolls
Royce implies that the organization needs to render a change within operation system. As
mentioned by Murray, Skene and Haynes (2017), employees within the aviation department
would have to be well trained and professional based on which they can maintain a collaborative
outlook towards the services. However, it is observed that Rolls Royce is constantly trying to
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9ISSUES IN GLOBAL BUSINESS AND STRATEGIC CONCEPT
enhance digital twin of the physical activities for seeking new data innovation. In this kind of
situation, the organization can effectively maintain performance quality as well as services.
Effective leadership style:
The leaders of Rolls Royce have observed that participative form of decision making
style is the most effective ways of dealing with the employees from cross cultural backgrounds.
Participative form of leadership style ensures that both the business experts and the employees
would equally participate in decision making (Dyllick and Muff 2016). As a result,
psychological barrier would not come among the employees. On the other hand, the business
experts believe that employees’ decision is also very important for motivating them towards the
services. However, this very specific style of leadership can give the scope to employees in
sharing their views and thoughts.
5. Current market share of Rolls Royce:
As per current business scenario, Rolls Royce is holding 33 to 34% of market share in the
region of Britain. Underlying pre-tax profits were significantly ahead of expectations, rising from
£813m to £1.1bn in 2017 (centreforaviation.com 2018). Free cash flow also beat forecasts,
jumping from £100m to £273m. It is observed as per several departments of Rolls Royce the
organization is holding 42% of market share for globally only due to civil aerospace. After
facing a serious downfall on the overall market of Roll Royce the company is holding maximum
number of market share due to their civil Aerospace sector.

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10ISSUES IN GLOBAL BUSINESS AND STRATEGIC CONCEPT
Figure: market share of Rolls Royce in terms of business and in terms of Geographic
region
(Source: centreforaviation.com 2018)
While evaluating the entire market growth structure of Rolls Royce it is identified that the
organization has made least entry in the Asia pacific region in comparison to other geographic
boundaries. 53% revenue of the company is brought from Civil Aerospace division.
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11ISSUES IN GLOBAL BUSINESS AND STRATEGIC CONCEPT
Figure: Sales growth of Rolls Royce due to Civil Aerospace
(Source: centreforaviation.com 2018)
However, it is undeniable that after the catastrophic consequence happened after Trent
1000 issue, the organization has still maintained its business glory in the international market to
some extent (Dyllick and Muff 2016). The business experts have faced immense challenges in
dealing with the customers effectively due to their mechanical issue and poor rate of customer
services. Still the market share scenario has not faced a serious downfall.
6. Five force analysis and improvement strategy on five forces:
Porters’ five forces analysis helps the organization in evaluating the industry analysis on
how the bargaining power of the suppliers and buyers is standing in the current market. This part
would help in providing effective recommendation on how to improve five forces for gaining the
business glory and image of the organization.
Power of the Suppliers At the current market scenario the power of
the suppliers is high as Rolls Royce has already
faced a major issue in their Civil Aerospace.
Therefore, the suppliers get more chances for
bargaining (Derber 2018).
In order to improve the situation, the
company would have to improve their current
market status so that suppliers’ power can be
decreased and they can get the raw materials in
affordable prices.
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12ISSUES IN GLOBAL BUSINESS AND STRATEGIC CONCEPT
Power of the buyers As per current market condition, the power of
buyers is high as they get more opportunities to
bargain with the service providers due to Trent
1000 consequences.
In order to regain customer loyalty the
organization would have to focus on increase their
brand value by investing innovating machines and
aircrafts.
Threats from the substitutes JET Blue, Delta Airlines and other
substitutes have immense power to downing the
market of Rolls Royce for creating this new crisis
(Bordo and Haubrich 2017).
In order to improve this situation, the
organization would have to focus on enhancing
their quality of products and services.
Threats from new market entry As per current scenario, Rolls Royal would
have to face immense difficulties in getting new
market entry effectively. In order to gain customer
loyalty the organization would have to face
challenges.
In order to get their organizational glory
Rolls Royal need to make promotional activities
effectively (McDermid et al. 2018). Based on
proper pro motional activities the organization
would be able to drag the attention of international

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13ISSUES IN GLOBAL BUSINESS AND STRATEGIC CONCEPT
customers
Competitors’ rivalry Competitors’ rivalry is a major factors
based on which the market share of the
organization is clearly evaluated (Hartl et al. 2015).
Gulfstream Aerospace, Bombardier Aerospace are
some of the most recognizable competitors of Rolls
Royce who has received major market threats from
its competitors after the incident of Trent 1000
issue.
In order to gain competitive rivalry, the
organization would have to focus on improving
their global strategies to regain the attention of
international customers.
7. Strategy for increasing the rate of market share:
Some of the most effective strategies of increasing market share are as follows:
Rolls Royce would have to render product innovation and superior quality of services that
would help the employers to create a differentiation from others.
By using STP analysis the organization would have to be specific and systematic in thei
market segmentation strategy
The business experts would have to render promotional innovation to grab the attention of
global customers
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14ISSUES IN GLOBAL BUSINESS AND STRATEGIC CONCEPT
The business experts would have to render effective innovation on promotional methods and
technique
8. The reasons of business expansion of Rolls Royce in other country with proper
justification:
The above scenario explains the uncertainties faced by Rolls Royce in developing their strategic
functionalities for the aerospace services. It is quite essential for the companies to conduct an
extensive market research prior to make any suitable decision for the company that would lead
towards the sustainable benefits. Business expansion is one of the most suitable strategies that
help the organisations to derive the considerable benefits in terms of sustaining the competitive
positions and generating the profitable revenues (Visnjic et al. 2017). However, business
expansion in a new country or market is not an easier approach. It requires the complete
understanding of the market feasibility and appropriate direction for conducting the operational
process. Considering the past misfortunes faced by Rolls Royce, it is important for the company
to identify the suitable business location that can derive more benefits for the future. Expanding
business to Vietnam is one of the suitable options that Rolls Royce can avail to create the
sustainable positioning of the business.
According to Baines (2015), expanding business to a new market requires understanding
of the best prospect sectors, significant government procurement, and major infrastructural
opportunities. Every business seeks the opportunistic scenario that would lead towards deriving
the considerable benefits. The growing economy, ongoing reformation and larger population of
93 million in Vietnam creates the quickly evolving and dynamic environment for the sustainable
business (Durugbo and Erkoyuncu 2016). The overview of the current Vietnam market ensures
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15ISSUES IN GLOBAL BUSINESS AND STRATEGIC CONCEPT
the association with the equipment sales, consulting and technology management, and
infrastructure project development. These reformations in the business market are quite
opportunistic for Rolls Royce to develop the greater infrastructural benefits for the aerospace
project (Brower 2016). In April 2017, the Asian Development Bank declared Vietnam as the
highest public and private investors in Infrastructural projects in Southeast Asia. It accounted for
an average of 5.7% of the while GDP rate of the country (Export.gov 2018). In addition to this, it
was observed that the disposable income rate in the urbanized areas is much opportunistic for the
consumer and service sectors.
The larger population of Vietnam is also another positive factor for expanding the
business. It is noticeable that many of the University Students who have been pursuing their
higher studies in the universities of United States stay in Vietnam. Along with this, the
increasing numbers of middle class Vietnamese prefer US as their vacation destinations (Holt,
Brown and Walker 2016). In addition to this, the growth of the environmental project,
telecommunication sector, and infrastructure construction project is much suitable for the foreign
business marketers to develop their sustainable position. It is important to mention that the
government of Vietnam plays the commendable role in dealing with the economic factors. The
government of Vietnam has been concentrating more on the aviation, telecommunication,
banking, and energy sectors. The remarkable investments on these sectors are quite feasible for
equalization process that generally leads towards more opportunistic values for the foreign
marketers (Jalonen, Tuominen and Wahlström 2016). Moreover, the country has the extensive
network in more than 75 countries, which also initiates more opportunities for the foreign
businesses.

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16ISSUES IN GLOBAL BUSINESS AND STRATEGIC CONCEPT
The observable scenario in Rolls Royce requires such opportunistic market where they
can invest their capital resources and ensure the return on investments. It is quite essential for
Rolls Royce to derive the benefits from Government and invest particularly on the necessary
segments. In addition to this, the larger population in Vietnam is much significant for the
company to gather more international talents that can lead the business and accomplish the
objectives (Haran and Rajashekara 2018). The nearby US market is also another most beneficial
segment that can ensure growth to the Aerospace business of Rolls Royce. The company would
derive the benefits of high quality aircraft parts to ensure the better services in this context.
Hence, it can be inferred that the business expansion in Vietnam would be much opportunistic
for the company in developing the sustainable business.
9. Recommendations:
The study describes the enormous challenges faced by Rolls Royce in launching their aerospace
business. Due to the mismanagement of the aircrafts part and the inadequate investments on the
manufacturing process, the company might face more challenges in future. Observing the
challenges encountered by Rolls Royce in establishing their aerospace business, the following
recommendations are provided.
The company requires attract the international talents who have the high-end expertise in
dealing with the advanced technologies (Derber 2018). Involving millennial would be much
beneficial in such cases since they are much inclined towards exploring the innovative
technicalities. Moreover, the tech-savvy millennial can develop more opportunistic values for
the services that can strengthen the competitive position for the company.
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17ISSUES IN GLOBAL BUSINESS AND STRATEGIC CONCEPT
Secondly, the company requires cut down the cost from the extra supply chain process and
invest more on the aircraft parts (Baines 2015). In other words, it is important for the
company to pay attention towards the manufacturing process with high quality raw materials.
The high quality materials would ensure the long term durability and capacity building
segment.
The company needs to involve the quality check team for each of the aircrafts in the
aerospace business (Brower 2016). The team would be involved in checking the aircraft part
before the flight takes off. Rechecking the technologies and the quality monitoring would be
beneficial in protecting the situational hazards or accidents.
The company needs to take the hands-on initiative to train their existing system engineers to
make them more technologically competent (Jalonen, Tuominen and Wahlström 2016). The
current advancements in the technologies is threatening for those who have been using the
traditional methods. Hence, it is quite necessary for them to get used to with the advanced
equipment that is much helpful to manage the innovations. The fruitful training session for
these system engineers in aerospace business would thus be helpful enough to improve the
manufacturing process.
Rolls Royce needs to concentrate on the above mentioned recommendations to make
improvements in their business profitability parameter. In order to keep pace with the continuous
advancements, it is quite essential for the company to develop their ocmptency level and
accomplish the business goals. These strategies would be much beneficial in achieving these
determined purposes.
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18ISSUES IN GLOBAL BUSINESS AND STRATEGIC CONCEPT
10. Conclusion:
The entire study has provided in-depth overview about the importance of implementing
global strategic concepts in Rolls Royce. The purpose of this study is to overcome organizational
issued faced in the civil aerospace department. The company aims to build strong heritage in
mechanical engineering for producing electro mechanical chain and hybrid power system. This
very specific study has provided detailed overview about the key major issues that Rolls Royce
have faced while making global strategy and technical barrier. In addition, the study has also
focused in making critical evaluation on the reasons of business expansion of Rolls Royce in
other country. However, it is observed that Rolls Royce is still intending to have new market
entry based on which the company can easily drag the attention of international customers.
Moreover, this specific incident has rendered immense disaster in maintaining entire business
image and reputation. It is undeniable that the primary purpose of making this engine is fast
services than expectation. For fulfilling this need Trent 1000 engines have failed to meet its
sustainable compressor durability. Large number of people had to lose their employability
opportunity for this sudden mechanism issue raised within Trent 1000. Compressor durability
and job cuts are the two major issues that Rolls Royce has faced as a global issue.
Rolls Royce had to face while running a successful brand so effectively in the market
major challenges in maintaining corporate business ethics aviation industry. As per corporate
business values the organization should drop a mail before discharging a specific employee from
the business services. As a result, stakeholders both internal and external are getting affected.
As per the belief of business experts of Rolls Royce short cut business strategy is not the ultimate
way to maintain business sustainability. However, it is observed that Rolls Royce is constantly
trying to enhance digital market for rendering the global attention and get back their lost glory.

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19ISSUES IN GLOBAL BUSINESS AND STRATEGIC CONCEPT
The leaders of Rolls Royce have decided to implement participative form of leadership style at
the workplace based on which both the employees and employers can equally participate with
decision making process. Some of the major recommendations have also been provided in this
study. It is recommended that Rolls Royce should hire those employees within business services
who have effective knowledge and competency with advanced technology of aviation crafts.
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20ISSUES IN GLOBAL BUSINESS AND STRATEGIC CONCEPT
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22ISSUES IN GLOBAL BUSINESS AND STRATEGIC CONCEPT
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