Roll Royce External Analysis

Topics: Internal combustion engine, Turbine, Jet engine Pages: 5 (1353 words) Published: March 8, 2011
This report will analyze and discuss the most important elements of the marketing environment for Jet Engine Industry, that is to say the main 3 levels of the marketing environment: the micro-environment through the Degree of Rivalry, Treat of new entry, Treat of substitutes, Bargaining of customers power, and Bargaining of supplier power, while, the macro-environment through Political, Economic, Social, and Technology forces. Finally, Opportunity and Threat that use to measure the risk for company to enter jet engines market. The analysis for the micro-environment is based on Porter’s 5 forces model and the one on the macro-environment is based on PEST analysis. Porter’s 5 forces is a technique to analyzing the industry and competitors. It is based on the insight that a corporate strategy should meet the opportunities and threats in the organizations external environment. While, PEST analyse is beneficial strategic tool for organisation to understand market situation such as market growth and decline. Moreover, it is also useful for analyzing business position, potential, and direction for operation (Kolter, 1998). However, Opportunity and Threat analyse are based on SWOT analyse model. The report will also give an interpretation for each of these aspects, a conclusion with a rating of the attractiveness of the Jet Engine Industry in worldwide current marketing environment.

Political Factor
European Aviation Safety Agency (EASA) is one of others aviation authorities in the worldwide who set the rules and regulations for airlines industry and jet engine providers to follow. EASA’s mission is to the highest common standards of safety and environmental protection in civil aviation in EU and worldwide. Therefore, for the jet engine industry, EASA is concerned in airworthiness and environmental concerned of aircraft and related products (EASA, 2011). As in 2010, EASA dropped emergency mandates to inspect Trent 900s engines after every 20 flights, moved to require repetitive inspections of the most engines, due to the explosive failure of a relatively new Trent engine on the Qantas Jet shortly after takeoff from Singapore (Online.WSJ, 2010a). While, U.S. aviation regulator is also scrutiny on safety issue for jet engine providers to concern more in the part of engine’s design that will help jet to slow down after landing, which will reduce the risk in any accident such as a flurry of incidents in which devices called thrust reversers malfunctioned on the ground, or pieces broke off in flight (Online.WSJ, 2009).

Economic Factor
Although, the demand in business air travel dropped because of the business downturn in worldwide. However, demand in air travel is still high only passengers just likely changed in service types. Passengers are still using airline services but solely preferable in economy class and no-frills carriers (Online.WSJ, 2010b). Therefore, Jet engine providers are now still able to sell the engines because the demand in jet engine is still stable. Due to economic environment remained challenging and it seemed merely that world growth would be slower in the years ahead than it has been in the past decade but there are still has a strong demand in transport and infrastructure because airlines are now waiting for new engine-option for fuel saving (Online.WSJ, 2010c). Social Factor

Presently, global warming issue is an important factor to companies to consider because consumers now are preferred to consume green products such as organic products. Airplane is one of significant factors that produce Carbon-dioxide in the air. Fuel and jet engines are main cores of airplane that effect to the environment because when engines burn fuel will procreate to carbon emission. Besides, jet engine is not only effect in carbon emission but it is also effect in engine noise when the airplanes are landing in the airports that can destroy...
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