Competing within a changing world
A Rolls-Royce case study

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Page 3: The changing external environment

The commercial aero-engine business of Rolls-Royce operates within two distinct market sectors. These are:

  • new engine sales to the two manufacturers such as Airbus Industrie and Boeing, as well as airlines;
  • engine parts sales to airlines that service and maintain aircraft.

Rolls Royce 6 Diagram 1Competitors in this secondary market include specialist maintenance companies. The new engine market is the primary market, which provides access to the secondary market for the sales of engine parts.

During the 1970s, Rolls-Royce controlled less than 10% of the civil aerospace market. The sector was characterised by intense commercial and technical competition from General Electric and Pratt & Whitney of the USA.

Market share could only be increased by major investment in new engines, and developing an improved range of services for customers. This required the company to become focused on service rather than products with services such as information management, inventory management and on- and off-wing maintenance.

Rolls-Royce | Competing within a changing world
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