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Rolls Royce-Business strategy

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Introduction The objective of this assignment is aimed to critically evaluate a change management towards to the world class operations at Rolls-Royce plc, ascertain a range of reasons for either success or failure to implement a world class operations management and to propose further improvements for the company's performance. The annual Rolls-Royce report was used a primary source of business data. It was found that the firm's strategy and operations management conforms to the current trends in the world class operations, i.e. environmental needs, customised quality of products and flexibility of production, etc.; however, certain risks and global challenges may affect a success of the business, leading to losing a share in the market niche. Rolls-Royce in Contemporary Business Environment Rolls-Royce is a global company providing a world class power product, judging on a basis of customer's demand or a niche market position - "it's me", for land, sea and air (Rolls-Royce, 2006). The company has a balanced business portfolio with the leading positions in civil aerospace, defence aerospace, marine and energy markets. One of key factors of Rolls-Royce's success is continuing expansion of its business globally. In the past five year RR started work on or opened facilities in Europe, the United States and Asia. Company employs over 38,000 employees, 22,700 are in the UK with the balance primarily in the US, Asia, Germany, Scandinavia and Brazil, which represents a global expansion of business operations, human resources for implementation of process and technology, i.e. resources for the world class status. Rolls-Royce is a highly focused power systems business, concentrating on manufacturing and services of power systems, including a gas turbine engine. There are approximately 54,000 Rolls-Royce gas turbines in service. With annual sales of around �4 billion and a forward order book of nearly �22 billion, its technology is applied over a wide range of products that generate high-value services throughout their operational lives. ...read more.


In addition RR is developing renewable fuel cell systems that have the potential to be clean, quiet, cost effective and highly fuel efficient. A company is successful if it has stable growing sales and thus financial resources for further business development towards to the world class level. 3 Sales and Operations Management Any threat to security of aftermarket revenues through a failure to provide an operational service which meets customers' expectations, would threaten a RR's level of profitability. Therefore Rolls-Royce is focused on providing a high standard of service to all its customers, investing in capabilities such as its recently established Operations Centres, which monitor engine operations in real time, co-ordinating and integrating data to enable Rolls-Royce to provide better predictive information and operational performance. These sum up how the business has done in relation to their strategies mentioned previously. But the markets in which company operates are highly competitive that is another challenge faced at Rolls-Royce's strategy mix to be the world-class. As Rolls-Royce does not offer products that can be sold over a till but more order based products over long periods, it is risky to have lots of pre-ordered products and therefore important to offer a good stock price to encourage potential investors. Majority of Rolls-Royce's programmes are long-term in nature and access to the key platforms is critical to a business success. Although there is clearly a positive feeling to these four statements it is hard to measure these long-term objectives. One mentioned objective is that there is no reference to in their annual report is whether harmful waste has been disposed, protecting the environment, or it has resulted to increased emission tax, reducing a financial outcome. However the Managing Director of Rolls-Royce said that "2006 is developing, overall, in line with our expectations". Particular emphasis is being made on the most profitable engine market for long-haul aircrafts (Fig. 3, table 2). ...read more.


However this form of communication is open, as it is not used for restricted information such as redundancies. Externally RR's business uses e-mail to place orders or inquire about business. However it isn't entirely fool proof if a company urgently needs to contact supplier e-mail, although may take a few days before it is read and replied too. Apart from contacting suppliers or customers Rolls-Royce has the website. It provides an alternative way of selling products and giving information away to the public such as potential buyers and shareholders. Dramatically increased IT and operations costs due to market growth and disruption caused by shortages of raw materials could diminish the RR's aims towards to operating and unit cost reduction at UK factories. Conclusion The Rolls-Royce achievements indicated that WCM practices were related to competitive performance, and that the addition of new manufacturing and management practices has resulted in further improvements in competitive performance - such as gas turbines assembly linereplicated for four key markets and after-sales services, including training. The WCM implementation was recognized as having been an economic success by the company itself and by partner-businesses. Being a world-class company gives to Rolls-Royce a certain advantage on a stock market, where so-called "alpha and beta investors" do prefer using rather a traditional approach (quality of management and production) to analyse a financial performance of a company, than quantitative approach to investment analysis. Thus more investors do believe in RR, especially after a series of financial crunches on the world markets. Rolls-Royce aero engines aims to maintain the no. 1 market position by offering industry leading technology at the best environmental and operational performance, minimising airline costs throughout a total product lifecycle, and innovative technical and business solutions maximising customer value. Combination of the technology and after-sales support has created the growing demand at stable price for the new engines. In my opinion, further improvements towards to the world-class require four components: Vision, Active Leadership Involvement, Hierarchy of Trained People, and Constancy of Improvement Activity. ...read more.

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