Strategic management Essay Example | Topics and Well Written Essays - 2250 words

Strategic management - Essay Example A major makeover happened for the company in 1990 when it joined hands with BMW of Germany for manufacturing of aero engines. â€Å"Today it is the world's second largest civil aero engine company, the world's second largest defence aero engine company, a global leader in marine propulsion and a leading supplier of energy solutions. All of these businesses have gas turbine technology at their heart.† (Rolls Royce, 2011) Aero engine manufacturing is one of the largest engineering industrial sectors in the world. Some of the leading aero engine manufacturers in the world are Rolls-Royce Engines, BMW, Bristol Engine Company, CFM International, Pratt & Whitney, Daimler Benz, GE Aviation, Hispano-Suiza, Napier and Son, Volvo Aero, etc. Among these, Rolls Royce is one of the leading market players. Rolls-Royce Engines holds nearly one third of the business aircraft engine market. Some of the main customers of Rolls-Royce include Airbus, Bombardier, Embraer and Raytheon. Quality, Rel iability and Tradition has been the main driving force behind the success of Rolls Royce Aero Engines. The key success factors of aero engine manufacturing industry are very critical. ... Research and Development is the next success factor. R&D is the factor that drives every other success factors. Better technology is developed only through innovation. Technological innovation is possible only through better investment of time and resources into R & D. Innovative product offerings are the next success factor of the industry. Merely supplying engines is not the game plan currently. Some of the innovative plans of the industry are Corporate Care, power-by-the-hour, pay-as-you-fly program, etc. (George, 2011) Similarly, better after sales service and customer relationship management are another key success factors. The aviation industry segment can be classified mainly into two categories that are wide body engine market and narrow body engine market. As of now Rolls-Royce has considerable market share in the wide body engine market with the second position in the segment. But Rolls-Royce still needs to develop its presence in the narrow body market. Currently, Rolls-Ro yce participates in the narrow body segment in a joint venture with Pratt & Whitney and others. â€Å"Rolls-Royce is well positioned in the wide body market, but about to lose 25% of the narrow body market in which it has a 40% joint venture share by 2015.† (GLG Expert Contributor, 2010) Analysis of External Factors Like any other industry, external factors have great influence on the prospects of aero engine manufacturing industry. Some of the key external factors influencing the aero engine manufacturing industry are as follows. 1. Raw material cost 2. Competition 3. Bargaining power of customers 4. Environmental impact 5. Regulatory Pressures 6. Currency risk 7. Other external events Raw material