Significance of Managing Innovation in Business

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MANAGING INNOVATION IN BUSINESS
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Executive Summary
This report examines innovation trends in the Rolls Royce holding. The report analyses
the company and reviews its history with innovation. The report goes further to analyses the
capabilities of the firm as far as innovation is concerned. This capacity is evaluated by subjecting
the company to an external analysis model (Porter % forces) and an Internal Model VRIO. The
report then examines the trend experienced in the industry in the year 2016 and mentions some
of the changes related directly to Rolls Royce. The automotive industry is one of the industries
that has been causing a lot of environmental pollution. The manufacturing process of automotive
yields a lot of wastes in terms of solid wastes and also gaseous wastes. Solid waste includes
scrap metal and metal oxides while gaseous wastes include carbon and its oxides plus Sulphur
gases. With the rising concerns in environmental issues and global warming, manufacturers are
compelled by environment regulatory authorities to reduce their carbon emissions and wastes in
a bid to safe the world’s climate. Manufacturers have therefore been forced to employ innovative
waste management practices to eliminate the release of carbon into the atmosphere and to reduce
the carbon content in the exhaust fumes produced by automobiles. This has been made possible
through the adoption of widespread innovative ideas and practices for both production and
operation of the final product.
Additionally, with increase cost of living, manufacturers have been forced to find new
ways of manufacturing to reduce the cost of their final products in order to remain relevant to the
world’s population in terms of costs. This struggle has forced innovation and creativity in areas
such as material science and solid mechanics which have developed new principles and
materials including composites and polymers for use in manufacturing of cheap products. These

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innovations are promoted by the application of science in conjunction with engineering. Product
developers work towards the realization of even cheaper products every day. Innovation is only
advantageous if it is managed properly. To manage innovation and to accommodate it, producers
have shifted to the creation of more flexible production lines with provisions for improvement
and systems that can accommodate expansion and addition of innovative processes and
equipment into the production process. Innovation is being used as tool to gain competitive
advantage. This truth is examined by subjecting Rolls- Royce to a detailed analysis in this report.

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Table of Contents
Executive Summary.............................................................................................................2
Introduction..........................................................................................................................5
Organization and Industry Overview...................................................................................5
Rolls Royce Holdings and Its Innovation History...........................................................5
Rolls Royce Innovation Performance and Capabilities...................................................7
Internal analysis – VRIO.............................................................................................7
External Analysis- PORTER 5 FORCES..................................................................10
The Industry In 2016......................................................................................................12
Conclusion.........................................................................................................................14
References..........................................................................................................................15