INNOVATION MANAGEMENT

Innovation Management

Innovation Management

Introduction

The term paper discusses the innovation management strategies of the chosen firm Rolls Royce PLC. Further, it explains various management elements that are required to control the operational activities. Research and Development projects are explored in depth to have a better understanding of the company's current core operations. In addition to this, the intellectual property rights of the company are also discussed.

History Overview

In 1904 the company Rolls-Royce was founded by Henry Royce and Charles S. Rolls. The first engine was made for the First World War in 1914. This engine was called the Eagle to be used among others. The first flight with this engine flew from UK to Australia. In that era, 20 different constructed units were running its operations During World War II, producing Merlin engines that were used in aircraft, Super marine Spitfire, Hawker Hurricane and North American P-51 Mustang. In 1953 they started producing parts for jet engines, including the aircraft Boeing 707. In the 60's other innovations made their appearance, such as Harrier, which was used in aircraft that assisted in vertical take-off. Further, there were Pegasus engines produced by Rolls-Royce. In 1995, the company acquired the American labeled Allison Engine Company.

In 1973 there was a division of the Rolls-Royce plc and Rolls-Royce Motor Cars, which has been producing cars. In 1998 Rolls-Royce Motor Cars was sold to Volkswagen, but retained the rights to the name of the company BMW, which became the owner of the venerable brand in the year 2003 (rolls-royce.com).

Financial Overview

Rolls Royce Holdings Plc has been growing tremendously and it has performed well in the past year 2011. Rolls Royce Plc has been able to set high targets and achieve them with extreme hard work and dedication. Rolls Royce Holdings Plc recorded £11.124million sales in 2011, while the net income was increased to £850 million, recording 21 percent growth. Further, as far as shareholders are concerned, Rolls Royce holdings Plc proposed to pay 10.6 pence for each share and the complete payment of 17.5 pence per share was made for a full year. This reflects an increase of 9 % and consequently, it depicts the continuing confidence of Board in the upcoming future of Group. The financial highlights of the group can be seen in the below table: 1.

Table: 2 represent the capital structure highlights of the firm. According to the table it is clear that total equity has significantly increased from £3,979m to £4,519. Further, cash flow hedges increased from 37 to 52. In addition, the capital of the Capital increased from £4,016m to £4,571m. However, the net funds have significantly decreased because the company made heavy investments in 2011 (rolls-royce.com).

Actuals in M GBP

Estimates in M GBP

Fiscal Period December

2009

2010

2011

2012

2013

2014

Sales

10 414

11 085

11 124

13 023

14 676

15 553

Operating income (EBITDA)

1 298

1 377

1 616

1 823

2 074

2 244

Operating profit (EBIT)

983

1 010

1 206

1 447

1 668

1 810

Pre-Tax Profit (EBT)

2 957

702

1 105

1 470

1 692

1 881

Net income

2 221

539

850

1 081

1 155

1 299

EPS (cts GBP)

119

28,8

45,3

58,1

63,0

68,6

Dividend per Share (cts GBP)

15,0

16,0

17,5

19,3

21,3

23,0

Yield

1,79%

1,91%

2,09%

2,31%

2,55%

2,75%



Capital summary - £ million

2011

2010

Total equity

4,519

3,979

Cash flow hedges

52

37

Group ...