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Rolls Royce - A Strategic Analysis

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Aaron Russell

on 29 January 2016

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Transcript of Rolls Royce - A Strategic Analysis

Tuni Masi
J "Gene" Hackman
Laura Mason
Aaron Russell

A Strategic Analysis
Content
Rolls-Royce Overview
Strategy Definition
Current Strategy
Strategic Analysis
Key Findings
Goals
New Strategy Statement
Lessons Identified
IS Recommendations
Questions

Rolls Royce - A Brief Overview
Some Facts
Power Systems customers across all divisions
2nd largest Defence Aerospace engine supplier in the World (25%)
Provides Systems and Services to 50% of reactors worldwide
Supplier to 70 Naval Forces (Including UK, US and Korea)
However...
5th Profit warning issued in November 2015
Strategy - Defined
"The direction and scope of an organisation over the long term; which achieves advantage in a changing environment through its configuration of resources and competencies with the aim of fulfilling stakeholder expectations"
Johnson & Scholes (2006)
Strategic Analysis
Conducted twice - Brainstorm & Research
PESTLE 1
SWOT 1
Reputation
British
Established
Skills & Experience
Whole Lifecycle
International
STRENGTHS
Expensive Workforce
Declining Workforce
Low Morale of Workforce
WEAKNESSES
OPPORTUNITIES
THREATS
Education Investment
Greater International Partnerships
Technological Advances
Offshore Ability
Exciting Competitors (Attract Workforce)
Trade Unions (Workforce)
Global Trends
Political
Economic
Social
Technological
Legal
Environmental
British Based, Defence, Reputation, Apprenticeships, International Agreements
EU Departure, Nationalisation
6th Largest Defence Provider, Apprenticeships
Stagnant Defence Budget,
Reduced Demand, Fuel Costs
Outsourced Labour,
Offshore Workforce
Political/Union Influenced Workforce,
UK Redundancy Uncertainty
IPR, Global Reach, Reputation
R&D Funding
Offensive/ISR Cyber Threat,
Competition
5EYES, US/UK, UK/Fr,
Joint Contracts
ITAR,
Legislative changes (Country Specific)
Nuclear through-life control,
Fuel Technology
Green Energy
"Business (or Strategic) management is the art, science, and craft of formulating, implementing and evaluating cross-functional decisions that will enable an organization to achieve its long-term objectives"
Arieu (2007)
PESTLE 2
Political
Economic
Social
Technological
Legal
Environmental
British Based, Defence, Reputation, Apprenticeships, International Agreements,
Nuclear Power in UK (HMG)
EU Departure, Nationalisation
6th Largest Defence Provider, Apprenticeships
Stagnant Defence Budget,
Reduced Demand, Fuel Costs,
Market Evolution,

Population/Power Requirement Growth (RR)
Outsourced Labour,
Offshore Workforce
Political/Union Influenced Workforce,
UK Redundancy Uncertainty,
Aging Population/Workforce
IPR, Global Reach, Reputation
R&D Funding,
Long-Term Nuclear Investment
Offensive/ISR Cyber Threat,
Competition
Lack of R&D Investment (WE)
Poor IS Strategy Focus (RR)
5EYES, US/UK, UK/Fr,
Joint Contracts
ITAR, Legislative changes (Country Specific),

Proprietary/Sole-Contract Issues
Nuclear through-life control,
Fuel Technology
Sustainability Focused (RR)

Green Energy,
Climate Change driving demand for lower emissions (RR)
SWOT 2
Reputation
British
Established
Skills & Experience
Whole Lifecycle
(Growing Sector)
International
Balanced Portfolio (Different Timescales)
Wide Investment Portfolio (International)
STRENGTHS
Expensive Workforce
Declining Workforce
Low Morale of Workforce
Market Evolution (Increased Competition (GST))
WEAKNESSES
OPPORTUNITIES
THREATS
Education Investment
Greater International Partnerships
Technological Advances
Offshore Ability
Chemistry Evolution (Fuel Emissions, Efficiency)
Travel Demand Increase (100% by 2045 (GST))
Growth in Nuclear Industry
Exciting Competitors (Attract Workforce)
Trade Unions (Workforce)
Global Trends
(Oil Developments)
Public Nuclear Opinion
THREAT OF NEW ENTRANTS
International Competition (non-IPR)

Prevention - Long Lead-Time for Competitors, Compliance Legislation is a Barrier to Entry

Emerging Markets in a Rapidly Developing World
COMPETITION WITH COMPETITORS

Differentiated by Being British

Lack of R&D (WE)

Good Reputation
THREAT OF
SUBSTITUTE PRODUCTS
Discover New Technology (Fusion)

3D-Printing

Quantum Computing

Scram Jets

Other Energy Sources

UAV

BARGAINING POWER OF CUSTOMERS
International Defence Agreements
(MoD not Wanting Capability Offered to International Market)

Knowledge of Demand

MOD Information Strategy Demands Greater Capability and Underpins Defence Activities (MoD IS Strategy)

Innovative Solutions to Customer
Service Needs (GST)
BARGAINING POWER OF SUPPLIERS
International Competition (non-IPR)

Knowledge of Demand

List-X Companies

Finite Resources (GST)
Key Findings
Goals
New Strategy Statement
Lessons Identified
IS Recommendations
R&D Investment

"Revolution, not Evolution"

Alternate Technology

Developing (not Developed) Markets

Investment in Workforce

Annexation of Defence Division
Gain competitive edge through innovation

Expand portfolio

Seek growth in new markets

Increase skills and motivation of workforce

Align Business Units to influences

Rolls-Royce will maintain its reputation as a highly skilled and experienced British manufacturing company, synonymous with producing unrivaled products for the global engineering market. Through investing in our workforce and innovative R&D we will evolve with changing global markets - remaining at the forefront of of engineering innovation.
Limited by available models

TOWS Exploitation

MOST implementation

Wargaming
Global IS

Complex integrated systems

Training and support of workforce
?
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