BSS050-6 Strategic Management: Rolls Royce Company Analysis Report

This report provides a strategic analysis of Rolls Royce, a British automobile and aerospace company, focusing on its strategic management processes. It begins with an overview of the company and proceeds with an analysis of the competitive environment using PESTEL and Porter's Five Forces frameworks. The PESTEL analysis examines the political, economic, social, technological, environmental, and legal factors affecting Rolls Royce, while Porter's Five Forces assesses industry rivalry, supplier power, buyer power, the threat of new entrants, and the threat of substitutes. Furthermore, the report includes an internal analysis using a SWOT framework to identify the company's strengths, weaknesses, opportunities, and threats. The analysis concludes with insights into Rolls Royce's strategic positioning and recommendations for future strategies.

Running head: STRATEGIC MANAGEMENT - ROLLS ROYCE
STRATEGIC MANAGEMENT - ROLLS ROYCE
Name of the Student
Name of the University
Author Note

1STRATEGIC MANAGEMENT - ROLLS ROYCE
EXECUTIVE SUMMARY
Strategic management refers to the formulation and the implementation of the main goals and the
key initiatives that have undertaken by the concerned management of the organization on the
behalf of the owners of the concerned business organization. Rolls Royce is a British automobile
company that has been active since the year 1998. The company deals in the manufacture of
various automobile vehicles as well as has its holding in the aerospace industry as well. The
following report deals with the strategic management processes that are implemented in the
British automobile company of Rolls Royce. The report opens with an overview of the
automobile company and proceeds to put forth an analysis of the competitive environment of the
company. The report proceeds further to put forth an analysis of the internal affairs of the
company.

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Table of Contents
Introduction..........................................................................................................................3
Industry analysis..................................................................................................................4
PESTEL Analysis............................................................................................................4
Porter’s Five Force Analysis...........................................................................................6
Internal analysis...................................................................................................................7
SWOT Analysis...............................................................................................................7
Conclusion.........................................................................................................................10
References..........................................................................................................................11

3STRATEGIC MANAGEMENT - ROLLS ROYCE
Introduction
Strategic management refers to the formulation and the implementation of the main goals
and the key initiatives that have undertaken by the concerned management of the organization on
the behalf of the owners of the concerned business organization (Rothaermel 2015). The strategic
management of the organization is generally dependent on the consideration of the resources that
the concerned company might have been utilizing as well as the assessment that is made on the
basis of both the internal and the external environment that are observed in the operational
environment of the concerned business organization (Lasserre 2017). The strategic management
of the organization generally relies on the setting of the objectives of the concerned organization,
the analysis of the competitive environment wherein the company had been operating. The
strategic management of the company should also take into the consideration the analysis of the
internal environment of the concerned organization, the evaluation of the strategies that are taken
into consideration and ensures that the concerned management of the company implements the
strategies in the concerned departments of the organization. Rolls Royce is a British automobile
company that has been active since the year 1998. The company deals in the manufacture of
various automobile vehicles as well as has its holding in the aerospace industry as well. The
various business ventures of the company are inclusive of the civil and the defense aerospace, the
marine and the other energy markets (Rolls-royce.com 2018.). The following report deals with
the strategic management processes that are implemented in the British automobile company of
Rolls Royce. The report opens with an overview of the automobile company and proceeds to put
forth an analysis of the competitive environment of the company. The report proceeds further to
put forth an analysis of the internal affairs of the company.

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Industry analysis
PESTEL Analysis
PESTEL analysis is a tool that is used to look into the various environmental factors that
might affect the concerned companies that have been operating in the given market. These
environmental factors that has been affecting the concerned businesses include the political, the
economic, the social, the technological, the environmental and the legal factors that have been in
operation in the concerned market. The various environmental factors that have been affecting
the famous automobile manufacturer are the political factors, the economic factors, the social
factors, the technological factors, the environmental factors and the legal factors.
The political factors that have been affecting the Rolls Royce are those that pertain to the
various factors like the political risks that pertained to the Gulf Wars and the other terrorist
activities that seem to be affecting the confidence of the passengers, especially among those that
belong to the United States. The company is also affected by the matters that are related to the
carbon emissions of the vehicles that are manufactured by the concerned company (Huxtable and
Schaefer 2016). The other political factors that have been affecting the company relate to the
factors pertaining to the political lobbying that is generally found in the concerned countries
wherein the company has been operating. The political factors that have been affecting the
company might also include the various policies that might majorly affect the aerospace
departments of the concerned company in discussion, Rolls Royce (Sharma 2015). The economic
factors that have been affecting the company deal with the factors of the supply and the demand
of the various products and services that the concerned company has been extending to the
esteemed clients of the organization. The company is observed to have been facing an economic
crisis due to the unpredictable rise of the demands on the part of the clients of the company. The

5STRATEGIC MANAGEMENT - ROLLS ROYCE
other economic issues that have been affecting the company deal with the unavailability in the
matters pertaining to the cost for the major investment on the part of the company (Gwiazda
2013). The social factors that have been affecting the company changes in the global demand of
the products and the services that are offered by the company. The aerospace department of the
company have been facing various issues that pertain to the social factors that are operative in
the concerned market (Gupta 2013). There has been a rise in the population in the urban areas of
the country thereby leading to the increased management of the traffic as well as the increase in
the demand for the airbuses that are capable of holding more passengers at the same time thereby
attempting to cope up with the pressure that is exerted by the concerned clients of the
organization (Yılmaz and Ustaoğlu 2013). The technological factors that seem to be affecting the
automobile manufacturer pertain to the factors dealing with the integration of the technology in
the various products and the services that are offered by the company. The aerospace department
of the company has demonstrated the fact that the products that are offered by the company as
well as the services that are offered might incorporate the use of technology. The inclusion of the
technological matters in the company might lead to the conditions wherein the company might
have to face a risk in the matters of the obsolescence of the technology that has been
implemented in the products of the company after long tenures of having the same product in the
market (Moritz et al. 2015). The environmental factors that need to be abided by the concerned
automobile company pertain to the matters that are various weather conditions that might impact
the activity of the airlines, the reduction of the demand of the consumers due to the changes in
the weather or the climate and the scarcity of the non-renewable fuels and the other materials that
are needed for the production (Hill, Jones and Schilling 2014). The legal factors that might affect
the company are those that deal with the health and safety of the concerned employees of the

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concern as well as that of the clients of the concern. The company must also abide by the various
legislations that are related to the environmental standards like the control of the pollution,
reduction of the emissions and the abatement of the noise that is created by the vehicles that are
manufactured by the company.
Porter’s Five Force Analysis
The Porter’s Five Forces Analysis is undertaken by the concerned company in order to
make a judgement on the competitive environment of the concerned company in discussion
(Porter and Heppelmann 2014). The concerned company in discussion, Rolls Royce is known to
be one of the leading companies in the automobile industry. The company uses the technology of
the gas turbine engine that is quite mature and thus might lead to the difference advantage among
the various competitors of the concern (Eden and Ackermann 2013). The five factors that are
analyzed in the aforementioned model are the industry rivalry, the bargaining power of the
suppliers as well as the clients and the threats that are faced by the company in the matters that
pertain to the new entrants in the market as well as the substitutes that are active within the
concerned market.
The competitive rivalry that is existent for the concerned company might be considered
to be low and might be predicted to remain so in the future. The global aerospace industry is
observed to be dominated by the three major companies that include Pratt and Whitney, General
Electric and Rolls Royce. The market wherein the company operates is observed to be highly
oriented to the budget plans of the concerned companies and might require the investment of the
huge amount of capital in the field. Thus, the concerned company might have a high advantage
in the fields wherein the industry rivalry is concerned (Moutinho and Vargas-Sanchez 2018). The
bargaining power of the suppliers of the company might be considered to be low and is predicted

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to remain low. The company is observed to have a huge number of suppliers thereby providing
the concerned company with the various parts and the other items that are needed for the
production and the assembling of the parts that are procured by the company (Kozlowska 2017).
The bargaining power displayed by the buyers and the other clients of the company is also
considered to remain low since there are less buyers for the automobile company. The company
treats the consumers as the authority for the price that is set by the company as the company is
observed to have been one of the leading companies in the global automobile industry. The
company is known to have been facing a low threat in the matters that pertain to the entry of the
new organization in the market. The aerospace department of the industry faces a comparatively
low threat in the matters that pertain to the new entries due to the huge costs that are involved in
acquiring the achievements that are needed in the fields of the technology and the technological
researches in the field (Diakaki et al. 2015). The threats that are faced by the company in the
matters of the substitutes of the concern might also considered to be low due to the fact that the
company might procure the parts that they need from the concerned company that had supplied
the concerned parts in the first place. This is due to the fact that the company procures that parts
that are best suited to the products that they have been offering to the concerned clientele of the
company.
Internal analysis
SWOT Analysis
The internal analysis of any business organization might be conducted with the help of
the SWOT Analysis. The SWOT Analysis of the organization helps in the analysis of the micro-
environmental factors that might affect the company. The major factors that are identified in the

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analysis pertain to the various strengths, weaknesses, opportunities and the threats that might be
faced by the company while operating in the concerned market.
The strengths of the company in discussion, Rolls Royce lie in the fact that the company
has been one of the best in the market and is known to have been providing the clients with the
best quality of the products. The company is known for manufacturing one of the best engines in
the market. The aerospace department of the industry is known to best manufacturer of the
aircraft engines. The company is known for the huge worldwide base that it has all over the
world and receives a high amount of remuneration from the countries wherein the company
operates. The company is known to have been operating in almost 130 countries and employ a
huge workforce in the concerned countries (Rolls-royce.com 2018.). The reaches that the
company has all over the world helps in the earning of the fair revenues from all the various
markets and thereby avoids the risks that the company might face from the various volatile
industries in the concerned market.
The weaknesses of the company lie in the spheres that pertain to the dealings of the legal
matters that might arise within the society. The company might face the various legal matters in
cases wherein the company might face the conditions wherein there might be the impositions of
the damages and fines on the various products and he services that are provided by the company
(Vitasek 2016). These impositions might lead to damaging the image as well as the goodwill of
the company and the business of the company, the position that it holds in the market and the
operations that the company might be involved in. The damage to the image and the goodwill of
the company might also be reflected on the reputation of the company in the global market and
the position held by the company at the share market price lists. The company, in discussion,
Rolls Royce has faced a huge decrease in the operations budget that the concerned management

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of the company has been following since the year 2009. This decline is attributed to the lack of
the cost-effective measures that have been implemented by the concerned management and the
worse abilities that were demonstrated by the authorities responsible for making and the planning
of the financial decisions that are to be implemented within the concerned business organization.
The opportunities that might present themselves to the company are the matters that deal
with the increase in the demand of the automobile engines that are used in the various
automobiles manufactured by the concerned company. The aerospace department of the
company is known for being in high demand due to the fact that there has always been a high
demand for the new models of the aircrafts all over the world in order to deal with the increase in
the population of the country. The other opportunity that might be availed by the organization
refers to the acquisitions that have been planned by the concerned management of the
organization (Parthiban, Zubar and Katakar 2013). The aerospace department of the organization
also faces a huge opportunity due to the massive growth in the demand of the turbine helicopters.
The replacement of the old engines of the helicopter with the new engines might lead to a
massive growth in the market division of the company (Jarillo 2013). The threats that are faced
by the company are majorly found in the matters that pertain to the high levels of competition
that is faced by the company in the markets wherein they might operate. The high-end
technology that the company uses is rarely found in the competitors of the company. This leads
to a very high competition in the market and industry wherein the company has been operating
(Frishammar, Dasselaar and Parida 2015). The other factors that pose to be a threat to the
organization refer to the compatibility of the policies of the organization to the various policies
that are implemented by the governmental body of the country wherein the company has been

10STRATEGIC MANAGEMENT - ROLLS ROYCE
operating and the risks that are involved in the supply chain of the company in discussion, Rolls
Royce.
Conclusion
Thus, from the above discussion, it might be pointed out that the above analysis helps in
the determination of the competitive advantages of the company that has been analyzed by using
the various models. The PESTEL analysis of the company helps in the determination of the
external environment of the company while the Porter’s Five Forces model of the company helps
in the determination of the competitive advantage of the company. The internal environment of
the company is analyzed by implementing the SWOT Analysis of the company. The analyses
point out the fact that the company is one of the best performing automobile companies that has
been operating in the global market.

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References
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Eden, C. and Ackermann, F., 2013. Making strategy: The journey of strategic management.
Sage.
Frishammar, J., Dasselaar, M. and Parida, V., 2015. When product meets service: Digitalizing
industrial innovation. Ericsson Business Review, (2).
Gupta, A., 2013. Environmental and pest analysis: An approach to external business
environment. Merit Research Journal of Art, Social Science and Humanities, 1(2), pp.13-17.
Gwiazda, A., 2013. System Approach Concept as Teaching Tool of Strategic Management
Fundamentals. Education of Economists & Managers/Edukacja Ekonomistow i
Menedzerow, 27(1).
Hill, C.W., Jones, G.R. and Schilling, M.A., 2014. Strategic management: theory: an integrated
approach. Cengage Learning.
Huxtable, J. and Schaefer, D., 2016. On Servitization of the Manufacturing Industry in the
UK. Procedia CIRP, 52, pp.46-51.
Jarillo, J.C., 2013. Strategic networks. Routledge.
Kozlowska, J., 2017. Servitization Of Manufacturing Companies–A Proposition Of Factors For
STEEPVL Analysis. In Economic and Social Development (Book of Proceedings), 23rd
International Scientific Conference on Economic and Social (p. 619).