Rolls-Royce Holdings Plc: Environmental Analysis and ICT Strategy

This presentation provides an analysis of the general business environment of Rolls-Royce Holdings Plc, focusing on political, economic, and social factors to identify major opportunities and constraints. It assesses the impact of ICT and technological changes on the company's overall technology strategy as a source of competitive advantage. The analysis covers political tensions, taxation rates, economic stability, labor market conditions, and social norms. It also explores how technology, particularly research and development, contributes to Rolls-Royce's competitive edge in marine, civil, energy, and military sectors. The presentation references various academic sources to support its findings and recommendations.

K
ROLLS-ROYCE
HOLDINGS PLC

Political factors of Rolls-Royce Holding Plc
Political factors regulate the activities of a company according to the law and policies of
government of the country. As for the Rolls-Royce Holding group is operating in multiple
countries providing industrial goods and services hence the company face various political risk
and threats such as political stability, policies and government system, corruption and taxation
policy.
 Political tensions of the country the company is operating in can influence the industry
growth and minimize the opportunity available to Rolls-Royce Holding.
 Rolls-Royce Holding can study the current policies of the country’s government as
government can changes policies toward the development of the related industry.
 High taxation rates affect the import and export also international business hence Rolls-
Royce Holding should enter in a market where taxation rates are low and create more
profit that can be invested in research and development activities.
Economies factors that influence the Rolls-Royce Holding Plc
Economic factors include inflation rates, foreign exchange rates, completion rates and
interest rates. It is important for Rolls-Royce Holding to understand these economy factors
as they determine the economy environment of the company. A comprehensive
understanding of the economy can help the industry in estimation of the growth. Following
are the economies factor that the Rolls-Royce Holding Plc should consider:
 Type of economy system and stability of economy in the country company is operating.
 Economy growth rate of the operating country.
 The company must analyze the labor market conditions to attract talented workforce to
improve business performance. Along with this company should also analyze the availability
of skilled labor as their shortage can affect efficiency of business.
Social factor of the Rolls-Royce Holding Plc
Social factor affect the culture of an organization. Beliefs and attitudes of the public play
a large role in understanding customer’s behavior. Following are the social factors the
Rolls-Royce Holding Plc should analyze:
 Rolls-Royce Holding Plc analyzes the demographic characteristics that help the
company in selecting the best market segment with high growth opportunity.
 Online shopping has increased after the e-commerce initiation and customers are
giving more consideration to online shopping. Thus the Rolls-Royce Holding
Plc also needs to understand the shopping behaviors of customers and develop
their marketing strategies according to new social pattern.
 Each country and society has different social norm and culture and Rolls-Royce
Holding Plc should make local teams to understand the societal values and

develop their marketing strategies according to the culture and values of the
society.
Opportunities and Constraints Company is facing in general environment of
the company
 Political factor: Rolls Royce is a global company that works in multiple
markets and face different political reasons that directly affects its sales.
1. Opportunities: Company got the benefits from political factor while
working for air force and army there is certain power is connected
with them thus can influence political situations in company’s favor.
2. Constraints: Political situation of European market is not as stable as
other Asian market hence the business operation has been affected.
Company has another area of operation that is supplying advanced
vehicle engines to military and armies. But the company have to
bend down it operations due to the pressure from particular countries
and countries in power.
 Economic factor: Since the company operates in multinational market
economic stability is important for maintaining the company’s position in
market. Economy stability, employment rates, economic growth rate are the
essential factor for Rolls Royce to remain profitable in automobile industry.
1. Opportunities: The segment market for the company is premium
with upper social class people who can afford the automobile
product of the company. Fluctuation of exchange rates of a country
can affect the company but not much extent because buyers belong
to the premium group who can easily pay for their product and
service.
2. Constraints: Company gets affected by a recession period during
2008 and sale of the company went down. Thus economy down
can impact the company’s profitability.
 Social factor: Rolls Royce is a popular and established brand known for
beautiful automobiles in international market. Social factors such as
education level in company, attitudes of the people. These cars are the art
and symbol of status for people. The company also manufactures civil air
jets and engines which increased the stakes for the company.

1. Opportunities: As customers are more attracted toward its civil air
engines Rolls Royce can become more profitable and influential.
Company can get rise in sales expanding its market in developing
countries lie Asian market.
2. Constraints: There is also a challenge company can face is
competition in the aircraft market. Company needs to remake its
finance strategy for maintaining profit when more companies enter in
aerospace market.
Effect Of technology on the Rolls-Royce Holding Plc:
In the age of technology advancement across the world it is necessary to consider and
understand the technological factor in the process of strategic decision making. Analyze of
technological environment can help the Rolls-Royce Holding Plc to introduce new technological
trends and helps in sustaining competitive advantage by increasing profitability developing new
innovating process and boost the efficiency. Sometimes the technology factor can also hinder the
business growth if the company does not adopt new technologies. As for the Rolls-Royce
Holding Plc technology advancement has created a completive advantage for the organization
and it can be understood y the points described as below:
 Research and technology is the core of the company’s innovation. Company
constantly focuses on improving engineering expertise industrial knowledge
and high performance ideas to provide better services to the customers
across the world.
 Company made huge investment in R&D for developing new product and
launched the new civil engines for the aviation market.
Rolls-Royce holding overall technology strategy as a source of competitive
advantage
Competitive advantage can be defined as the conditions which help the company to work
in an efficient and high quality manner as compare to its competitive brands. Technology helped
the Rolls-Royce Holding Plc in sustaining and developing new competitive advantage which can
e understood y the following points:
 The respective company has achieved the competitive advantage as because
it mainly focused on marine, civil, energy and military sectors and at present
they are the top in the world.

 Company constantly invests in research and development activities and new
product that is the core strategy for the company to maintain a competitive
advantage in industry.
 Rolls-Royce Holding Plc is making all kinds of engines and increased the
quantity of world’s civil jets which accounts for their revenues.
 Company always seek and try to add more after sell service to retain their
customers that will improve their product reliability and will add more value
to competitive advantage of the firm.

References
Books and journals
Aziz and et. al., 2021. Factors affecting International Finance Corporation. Journal of
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Shtal and et. al., 2018. Methods of analysis of the external environment of business activities.
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
Buckley, P. J. and Casson, M., 2020. The internalization theory of the multinational enterprise:
past, present and future. British Journal of Management. 31(2), pp.239-252.
Goldstone, J. A., 2019. An analytical framework. In Revolutions of the late twentieth
century (pp. 37-51). Routledge.
Drobyazko and et. al., 2019. Factors of influence on the sustainable development in the strategy
management of corporations. Academy of Strategic Management Journal. 18, pp.1-5.
(Drobyazko and et. al., 2019)
(Goldstone, 2019)
(Buckley and Casson, 2020)
(Hamilton and Webster, 2018)
(Shtal and et. al., 2018)
(Aziz and et. al., 2021)