Importance of Strategic Management and Change Management in Rolls Royce

This document discusses the importance of strategic management and change management in Rolls Royce. It explores the process used by organizations to determine their strategy, evaluates critical models and tools used for strategy determination, and examines the application of these tools in the context of Rolls Royce. The document also highlights the significance of change management in ensuring sustainability and dealing with complexity and risk.

Strategic
Management

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
A critical assessment of the process used by organisations to determine their strategy........3
Evaluation of critical models and tools used by organisations to determine their strategy. . .4
Application of these tools in context to select company Rolls Royce...................................6
Critical Appraisal of the importance of the change management ........................................7
CONCLUSION................................................................................................................................8
REFERENCES..............................................................................................................................10

INTRODUCTION
Strategic Management is an effective approach of managing the resources of an
organisation to achieve the goals effectively and efficiently. The process help the organisation in
setting objectives, analysing the competition in the market, evaluating the affecting factors and
then formulating the policies and strategies in accordance with the ongoing environment. It
examines the flexibility of an organisation as it is easy for flexible company to adapt such
changes. Further along with the plans it also devise measures for organisation to attain its goals.
The organisation that was chosen in this report is Rolls- Royce Holdings Plc as it is one of the
most leading firm in the auto mobiles industry and maintains the strategy management to meet
its objectives. It is wholly owned subsidiary of German Group BMW. The brand was
incorporated in the year 1998. Charless Rolls & Sir Henry Royce are the founder of the
company. It has its headquarters in Kings Place, London. The brand deals in aerospace, defence ,
energy and marine industry. It is a most famous British luxury car manufacturer. AS it deals in
the product civil & military aero engines , marine propulsion system Power generation
equipment equipments. The company placed a great emphasis on the core of strategy plans to
gain competitive advantage. This report examines the strategic management analysis and its
utmost important in an organisation.
MAIN BODY
A critical assessment of the process used by organisations to determine their strategy
Critical Analysis of the strategic management defines the strategies developed by the
managers to achieve the organisational goals. As it is the managers concern to carry out the
strategies in order to meet the objectives of the company to maintain the sustainability as failure
may led an adverse effect on the growth and survival of the company. Thus, critical analysis
requires the managers to focus on evaluating all the aspects of the management process. It differs
in the companies, as without strategies the company will not be able to achieve the targets which
they are set in advance. Hence some of the prominent procedure in this context are analysed
below.
 Internal Analysis: The process that could be follow by organisation in terms to determine
their strategy is to analyse and observe the internal weakness and competencies of the
business. The respective analysis is so important with regards to having an appropriate

insight with in the firm's capabilities, whereas elements that need effective improvement.
Various essential elements are included in the process like strength and weakness to
business and several opportunities that business can grasp for the purpose of business
expansion and growth. As well as it also covers threat which is faced by company which
is mostly linked business failure and looses.
 External Analysis: The strategies for business is framed by marketers after analysing the
external environment as company do not have direct control on the situations that are
exist due to the reason of external factors. The factors are based on various elements
such as political, environmental, social, legal, technological, economic etc.
This process include analysis of industrial position of organisation in context to suppliers,
competitors, companies, substitute , new firms etc. All the forces have prominent impact on
performance and their decision making. Thus this process is effective in preparing strategies in
terms to gain competitive advantage as well as stand in sustainable position in the competitive
market place. This procedure look sound but it has many limitations also . For example, while it
plays very crucial role in relation to determining different external forces and leads to analyse its
impact on performance of the company, it tends to fails to evaluate various competencies that are
most commonly present in the company. Also several facts are not taken into consideration, that
whether exclusivity is present within the firm's offerings, which might overpower the external
forces due to its uniqueness.
Evaluation of critical models and tools used by organisations to determine their strategy
As per the above discussion, the procedure utilised by the organisation is very prominent
in context of analysing their strategies in an effective manner. In relation to this some models are
adopted by the company that offer guidelines as well as to provide support to firms. To
determine the strategy it is important to observe how best these models are use & implement so
that it gives benefit to the business organisation. These models are effective and influential when
a company use all the strategies of these model. The main reason to choose this models are all
the specific factors reflected effectively and demonstrate their positive impact to recognise the
strengths and weaknesses of the organisation and beside this these model are helpful to identify
the internal and external factors that are directly affect all the operations of the company.

For analysing internal and external environment firm is used several models in the
organisation as few their examples are explain in detail below mentioned paragraphs-
 SWOT Analysis:
The respective framework is follow by the organisation when strength & weakness of company
is need to be determine along with opportunities and threat. It is consider as most suitable model
in which less analysis is require and organisation practice can effectively overview for the
purpose to analyse potential threats and opportunities in context to same. In terms to its
implementation the respective model is tends to applied through understanding strength as well
as weakness of company after that effectively and appropriate determine threat & opportunities
which are connected to external environment. In terms of positive sides of this model. This
theory is one of the most suitable and universally applicable theories in different type of
business. Capabilities as well as competencies can easily be determine with the help of using
this model. On the basis of it only strategies are to be formulated and policies is to be framed.
With regards to their negative aspects however there are some limitation are involved in
perspective and scope where it is implemented. For example , only the organisation that make
concentrate on their core weakness and abilities can be able to formulate strategies that supports
to satisfy company's internal agenda's. On the other hand if some other important factors like
industrial or any other change exist this model is not effective in terms to its limited reach.
 PESTLE Analysis: This model is adopted by organisation to analyse external
environment . In this various factors related to political. Environmental, economic, social,
technology, legal, environmental must be consider. This framework is followed, adopted
as well as implemented by organisation to determine various factors that are included in
the external environment of the organisation. It support the marketers to determine the
market. And what was the to determine the position of the market, as well as preferences
of customers, along with legislative and political requirement, that could actually drive a
business towards success. Additionally this model could also be utilised in determining
the positive, as well as negative impacts of these factors on the organisation, which could
appropriately ensure pathways through which the organisation could gain success in the
market. The factors that are follow by the company allows most critical as well as
appropriate analysis of the marketplace, that supports to develop or formulate the
strategies which are effective. This framework is followed, adopted as well as

implemented by organisation to determine various factors that are included in the
external environment of the organisation. It support the marketers to determine the
market.
However after analysis it is observe that both the models plays a cruicial role in business as they
both have their own demerits and benefits which needs to analyse organisation so that it become
possible for mangers to develop strategies so that agendas of model can be fulfill.
Application of these tools in context to select company Rolls Royce
Political: Political factors play a crucial role in determining various factors which make
impact on Rolls Royce long term profitability. It operate their business in industrial goods and
services in more than dozen countries and expose itself in different type of political environment
and political system risk. Across various countries the success is achieved by it in context to
industrial goods and services for the purpose to diversify the risk of political environment. As the
organisation Rolls Royce deeply analyse the factors before taking entry in certain market or to
make investment. The factors that affects its business are level of corruption, military invasion
risk. Bureaucracy as well as interference in various industrial goods and services by government.
Legal framework in regards to contract enforcement, Trade regulation and tarrifs, intellectual
property protection. Taxation, mandatory benefits to workforce, safety regulations in industrial
sector.
Economical: As inflation rate, interest rate, saving rate and foreighn exchange rate
determine agree gate demand as well as investment in an economy. On the other hand micro
environment factors like competition norms make impact on the competitive advantage of firm.
The brand Rolls Royce consider economic factor of the country like inflation rate , growth rate,
audience power to spend etc to forecast the growth of company. At the time of performing
PESTLE analysis Rolls Royce consider various economic factor such as cost of labour,
availability of skilled human resource, economic growth rate, unemployment rate, infrastructural
quality in context to industrial goods and service industry, inflation rate etc.
Social: Culture of the society as well as the manner of performing the activity make
positive or negative effect on the culture of the company in an environment . Attitudes and belief
of audience plays an important role to determine how marketers of Rolls Royce will understand
clients and how they design marketing message. Social factors which leaders or managers of

Rolls Royce should analyse for the purpose of PESTLE analysis are Leisure interest, culture in
regards to social convention, gender role, etc.
Technological: Rolls Royce not focus only on technology But also make emphasise on
sped at which technology disrupt the industry. Analysis of technology include understanding the
impact of factors such as technological diffusion rate. Technology's affect on product offering
etc.
Legal: Legal factors that brand Rolls Royce should consider at the time of launching new
product in the new market. Such factors are relates to discrimination law, intellectual property
law, employment law , consumer protection etc.
Environmental: As different market posses different environmental standard which
affects profitability of company in those market. In country different states have various
environmental Laws. Before launching new product in competitive market Rolls Royce must
consider various factors such as weather, recycling, waste management , regulations related to air
and water pollutions, attitudes towards renewable energy.
Critical Appraisal of the importance of the change management
On the basis of above analysis it is to be conclude in context to chosen organisation Rolls
Royce that to run the business smoothly it is important to business to make various essential and
positive changes in the company which tends to support organisation in complying with
changing environment condition like subsidiary company make suitable changes in the business
as per the suggestions of holding company. As it is notice that this structural variation &
emergence of the parent company has been quiet profitable for the firm in context to copying up
all the above mentioned external factors.
Thus it is need to appraise the importance of change management critically. It is the most
common process that were adopted by the company with regards to make changes in the firm. In
context to organisation Rolls Royce significance of this aspect is reflected by explaining various
points as these are as follows- Complexity: The most prominent aspect in context to complete change management is
complexity. It is due to restructuring as it is one change that reflects on every
department & organisation level. With regards to Rolls Royce , heavy resistance
between employees is created by it at first. Thus in this situation , all the forwards
anticipated benefits are leads to be communicated by manager or employer with the

workforce. On the other hand research & development in regards to effectiveness as in
terms to future appropriateness must be analysed. Risk: With regards to structural changes, there are various suitable and effective risks
are leads to associated with the same. Like , risks are very much related to the
management of the change within an organisation. As, if it involves ineffectiveness than
it tends to increase the chances of complete failure of the business plans of company.
Thus, the factor risk is quite critical in context to the organisation and the change that
are related with it. So to deal with the same, there is need to develop risk management
plans in the organisation, which would be subjected towards dealing with risks related to
the change. Sustainability:Every action of an organisation directed towards ensuring sustainability
within a company. However, in context, the company took a step towards change seeing
the current environment conditions previously, along with analysing the need for
expansion and better sustainability. Hence, this positively reflects the need for change
management in he company, so that it could lead to a sustainable growth and betterment
in the future.
 Cost : It is necessary or an organisation in relation to analysing its cost in context of the
change planned in the company. With respect to the structural change, there are certainly
several things is required to be considered by a firm. For example, new technical and
human resources are required to be analysed. In addition to this, additional training costs,
along with marketing and promotional aspects would also be counted in prominent
expenses. Hence, this aspect is somewhat unfavourable in terms of such change within
the company.
CONCLUSION
On the basis of deep analysis it is to be conclude that for every establishment strategic
management is very important in order to attain a competent position in the competitive market
place However it is most essential to analyse the process that are used by the company for
determining their strategies in relation to develop competent strategies for firm. Additionally by
using different models and tools smart managers of the organisation easily realise which tool as
well as model is more effective to business and after that smart strategies are made by marketers
to implement these models in the firm. And at last the process change management must be

appraised as it most necessary for every company to appropriately as well as effectively tends to
ensure competence in most competitive as well as on dynamic environment of the business.

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