CASE STUDY OF ROLLS-ROYCE

Case study of Rolls-Royce

Case study of Rolls-Royce

Introduction

In the present times, not a single business operates in a vacuum without being affected by the forces of markets. The nature of business activities is competitive in nature. In a rapidly changing environment of business, producers are continuously penetrating and leaving markets. Simultaneously, the dynamic nature of customer preferences indicates that businesses are required to come up with new product and strategies in order to meet the requirements of their customers. Some businesses succeed through prompt responding to and catering the changing needs of the market, whereas others are unable to give good performance. In recent years, some industries have changed in so far as civil aerospace. In the last decade, 950 million people used to travel by air, 5 years back the total number of travelers reached to 1.1 billion and this total was climbed to 2.5 billion in 2009. The aviation sector makes a significant contribution in the world economy, and it provides employment opportunities worldwide. In the year 2009, the contribution of aviation sector in the world economy was estimated $1800 billion. At present, 33% of the manufactured exports of the world are transported by air. However, twenty years back, this proportion was only 1/10th (Hitt, et al., 2007, pp. n.d ).

Growth in the aviation industry has lead to stimulation in the competition between the organizations that conduct business operations in it like airlines. This also places a knock-on effect on the suppliers, the manufacturers of aero planes and the engine manufacturers. Rolls-Royce is among those engine manufacturers of the world, which has proven capacity to develop, design and manufacture larger gas turbine aero engine. In present business era, the organization has been put through several challenges that have impacted the position of the organization in aeroengine industry (Barron, 2013, pp. 395-396).

In this paper we will analyze the strategic approach of Rolls-Royce in light of the given case study. Moreover, we will also discuss the framework of Porter five forces and their importance for Rolls-Royce in analysis of the industry. Furthermore, we will also discuss the industry structure for Rolls-Royce and significance of game theory in improvement of strategies of Rolls-Royce. In the end we will discuss the concept of competitive advantage and explain this concept for Rolls-Royce.

Discussion

Strategic Approach of Rolls-Royce

The strategic sourcing initiative of Rolls-Royce involves the association of Rolls-Royce with organizations to considerably curb the costs of material and increase the availability of material. With this strategy, Rolls-Royce management use the industry wide procedures like excess inventory, bulk purchases, shared raw-material, strategic alliances with suppliers, substitute suppliers for the assurance of meeting the needs of site and support of PM together with Commercial Grade dedication, emergent tasks while reducing expenses (Hitt, et al., 2007, pp. n.d ).

For this reason, the strategic approach of Rolls-Royce is better categorized as deliberate approach. However, the emergent and deliberate strategies identify the objectives of actions taken by the organization. The business falls under the categories of deliberator or emergent approach ...