Rolls Royce Pest Analysis

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Rolls Royce Group Private Limited Company outlines, creates, fabricates and administrates engine for use on Air, Land & Sea. Of which, air is its major business division. The Aerospace division comprises of civil aerospace and defense aerospace while Land & Sea divisions involved of marine, nuclear and power systems (Reuters, 2015).

Rolls-Royce was once an electrical and mechanical business that established by Sir Frederick Henry Royce in 1884. In year 1904, Royce had successfully built his first motor car and was introduced to Charles Rolls. The good impression of Charles Rolls on Royce’s two-cylinder car had brought the co-founder of Rolls-Royce together (Rolls Royce and Bentley, 2012). Rolls-Royce was then founded in March,
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Macro-environmental are uncontrollable factors that influence a business’ strategic planning, decision making and operations (Chartered Institute of Personnel and Development, 2015). However, by understanding its macro-environmental factors, the business could take advantage of these factors and maximize their opportunities, whilst minimizing their threats. The 6 factors of PESTEL analysis include: Political, Economic, Socio-cultural, Technological, Environmental and Legal factors. In this case, it highlights the contextual information of the civil aviation competition of uncertain environmental, political and economic anarchy for flight…show more content…
These factors have great impact on the way we think and act (PESTLE Analysis, 2015).

For Rolls Royce, its operation was greatly affected by SARS virus in year 2002. Damage from the SARS have been done to an already ramshackling aviation division. For example, Singapore Airlines cut down 13% of its capacity due to SARS.

Another socio-cultural factor is the fear of terrorist attacks. Example would be the recent ISIS attacks in France, Russia etc. With terrorist bombing, airline companies are affected by the number of passengers traveling overseas. This could cause a drastic change to Rolls Royce’s income. Urban countries that are affected by overcrowding of air-craft are asking for larger aircraft as larger aircrafts are more powerful.

Technology factor

Technology factors affect Rolls Royce in both advantage and disadvantage way. Advance support of technology allows Rolls Royce to boost its business competitive advantage. For example fuel- efficient engines, flight control in helping pilot’s training, in-flight Wi-Fi etc. This is an important factor as Roll Royce uses advance technology for daily tasks, maintenance and production. However, it is unfavorable for Roll Royce when its rivals adopt its latest or new research and development (R&D) in manufacturing engines, turbine etc. This is because potential client might leak away as more companies
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