Select a company or organization.
It cannot be Cemex, Nippon Steel, or BA.
You could be looking for profit or a not-for-profit organization.
The performance of the company/organization relative to its main competitors/comparators between 2006 and 2016 is shown.
Do an economic analysis of the firm/organization and its markets. Also, examine its macroeconomic context.
Is your analysis of the fundamental economics’ of the firm/organization complete?
If so, why not?
What can your analysis tell you about the effectiveness and efficiency of your chosen company or organization’s business strategy, especially during the ‘Great Recession?
Companies are constantly rethinking their economic strategies in order to stay ahead of their competitors, given the increasingly ramifications of economic changes and constant changing business environments.
Before implementing business strategies, organizations must evaluate a number of micro and macro factors.
Rolls-Royce Corp. was considered for the implementation of micro and macro strategic plans.
Due to the slow market conditions, this company has experienced many ups and downs.
This company provides design, manufacturing, and distribution power system for aviation and other sectors. It is the largest company in the automotive industry in Britain.
The company is based in Derby, United Kingdom.
This report focuses on the business environment. It is a combination of economic, political, and social forces that are often outside of the control of businesses and can have a significant impact on business performance. There are also several systematic parts to this study that reflect all the strategic tools like SWOT analysis, PESTL analyses, and other matrix that allow for the evaluation of all internal and external economic factors.
The final conclusion was to assess all strategic plans that were implemented by organizations in order to analyze and overcome all the problems encountered by Rolls-Royce Corp. and General electric Limited. (Henderson 2008).
Selecting this company’s key economic factors is crucial in order to determine the design, manufacturing and distribution power systems for aviation and other industries.
This is an important factor in the development of Rolls-Royce Corp’s business strategies and economic conditions.
Each business must implement strategic plans to reduce the negative effects of external factors and to harness all the economic benefits.
Rolls-Royce Corp. and General Electric have considered all aspects of business economics in order to create an effective culture and business rules for their organizations (Rees & Smith, 2017).
Overview of Rolls-Royce Corp and General Electric Limited
Since last five years, it has been shown that the economic factors of manufacturing, design, and distribution power system for aviation have been showing positive upward images (Wirtz and Tuzovic, 2015).
The slowing global market conditions for the Automobile industry have led to a negative trend in Rolls-Royce Corp’s and General Electric’s total revenues over the last five years.
Rolls-Royce Corp has experienced many ups and downs over the years, which was due to the slow market conditions.
This industry is responsible for the design, manufacture and distribution of power systems for aviation and other industries.
The company’s portfolio is balanced and includes a leading position in civil aviation, defense and marine markets.
Rolls-Royce Corp’s core ideology is to improve integrated power solutions for aerospace and the marine/industry market (Turner 2009). However, company has increased efficiency in its value chain activities (inbound & outbound) to increase its business efficiency compared to its business competitors such as Pratt & Whitney and General Electric.
All these organizations have adopted two strategies to manage their businesses, namely product differentiation as well as cost leadership strategies. This has helped them mitigate the negative effects of global recession.
Rolls-Royce Corp needed to modify its value chain activities in order to be competitive with other companies after the global recession of 2007-2008.
This company has a strong capital structure. Financial managers and other members of the team are responsible for it.
This structure was based on.65 debts to equity. It helped reduce company’s overall financial risk and also kept its capital costs down.
Stone, 2016, stated that this helped the company implement its cost-leadership strategy in the market.
Rolls-Royce Corp, for example, reduced its capital cost by 10%. It also increased its production capacity by 10% by making the best use of its resources (Williams 2017, 2017).
However, it must penetrate the market in times of global recession with its low-cost design, manufacturing, and distribute power system for aircraft and meet clients’ needs and demands in a determined approach.
General electric capital followed the same strategy (Matelly & Lima, 2016).
General electric, however, decided to diversify its business by launching a business process outsourcing business after it had evaluated the global recession.
Rolls-Royce Corpimplementsthese strategies re-capitalize business and create core competency in capital structure maintenance to minimize the negative effects of global recession (Fioramonti 2016, 2016).
Economic Analysis of Rolls-Royce Corp and General Electric Capital in Its Markets, and Its Wider Macro Context
After analysing the market conditions and economic factors, it was found that both the UK and Britain have experienced consistent growth. They are characterized by low unemployment, stable economic conditions, and contained inflation.
The basis for the production of goods or services in Australia is economic growth.
It is usually measured as the country’s % increase in GDP (Mayor and Tol 2007).
Rolls-Royce Corp must still assess all economic factors, including employment growth, inflation rate and capital expenditure per capita.
Rolls-Royce Corp could use the GDP rate of a country to calculate the average standard living for its clients (He and Balmer 2017, 2017).
Rolls-Royce Corp will use this GDP rate and the collected data to help it consider private consumption, private investments, and export and import of goods in the UK’s economic environment.
Rolls-Royce Corp found that the UK’s real economy has grown by an average of 3.3% per year since 1991.
The GDP per capita of the UK economy is 43.734.00 USD (2015). This is a reflection of how Britain’s consumption of goods, services, and manufacturing has increased at a tremendous rate.
Rolls-Royce Corp’s annual report shows that its total turnover has been increasing over the past 5 years due to the ramified economic environment (Castles and Henderson 2014).
It had to lose a lot of its total turnover during the global recession.
The GDP rate is a broad indicator of economic health.
It is clear that the UK’s structure and policies are flexible. This means that Rolls-Royce Corp must make changes to its marketing and strategic plan in order to increase its market share and overall production.
Rolls-Royce Corp already faces many obstacles in establishing new business chains in Australia. This could be identified using PESTL analysis (Borio & Lowe 2002).
These are the economic factors that are determined by the government and other parties and have an impact on the organization’s business operation.
The Australian government has reduced the tariff and tax rate on all imports of raw materials, which has led to a low price for its assets.
Rolls-Royce Corp took full advantage of these political factors in order to lower its total tax payments to the government.
General Electric also used double taxation avoidance agreements to lower its overall tax payments (Campiglio 2016, 2016).
These include all of the personal beliefs, values, and other factors that clients have.
These factors could be used by Morrison Plc to tailor its supermarket supply chain.
These strategies were used by the company to meet low market demand and provide a customized supermarket supply chain to customers.
Rolls-Royce Corp was able to offer customized services to improve client satisfaction (Forecasting 2006).
General capital, on the other hand, provided standardised services to increase its clientele based on its international brand image as well as the quality of the services.
These are factors that are beyond the control of Rolls-Royce Corp or General Electric capital.
Rolls-Royce Corp used this information to assess the economic impact of global recession on its business.
Rolls-Royce Corp evaluated the purchasing power of clients and Inflation rate. It also calculated the return on gilt securities. This helped to increase its overall production, design and manufacturing, as well as distribute power systems for aviation and other industries.
General Electric, on the other hand, saw its production levels drop due to higher interest rates and lower purchasing power from clients in both domestic and international markets.
To cope with global recession, General Electric used diversified business strategies (Yang, and others).
With a view to increasing its overall profit, it entered into other business organisations such as factoring and mutual funds.
Each company had different strategies for competing in the market. They also developed their own economic strategies to combat the negative effects of global recession.
According to the financial behavior, there have been several stock bubbles that have had an impact on share prices at both national and international levels.
Rolls-Royce Corp’s share price has increased by 200% over the last 10 years.
Rolls-Royce Corp’s market capitalization was PS22.22billion in 2013, which increased to 32.33billion in 2017.
The market capitalization of Rolls-Royce Corp was PS22.22 billion in 2013, which increased to 32.33 billion in 2017.
Morriso1n Plc has ensured that it follows all legal requirements in a systematic way in order to improve its corporate governance.
Rolls-Royce Corp is able to demonstrate that it has implemented all policies and established effective corporate governance due to the changes in international treaties between countries.
General electric capital, on the other hand, was subject to various fees and penalties for its lack of legal compliance in its business operations.
High penalties were imposed on General electric for failing to comply with FEMA provisions and international standards in its reporting frameworks.
General electric also had legal problems in complying with international financial reporting frameworks.
Rolls-Royce Corp has complied with international financial reporting standards in order to harmonize its domestic and international reporting systems (Rudd 2009).
Before implementing any strategic plans, both organizations must consider these factors.
Rolls-Royce Corp used cost leadership strategies and product differentiation strategies to counter the negative effects of global recession.
General Electric Capital has managed global recession by using diversified business strategies (Schmitz and al.
Trend Analysis of Rolls-Royce Corp (Fundamental Analysis).
The total revenue of Rolls-Royce Corp has increased to USD 14,955 millions from USD 12161million.
This means that the company’s total revenue has increased by 16% over the last six years.
Due to the global recession, company was forced to deal with high stock bubbles in business operations and fluctuations in total revenue.
Rolls-Royce Corp’s overall turnover has increased throughout this period regardless of its capital value or share price (Whitelegg 2000).
Total revenue (millions)
Trend Analysis of General Electric Capital
The revenue of General electric capital has decreased to USD123,693 millions from USD172,488million.
This indicates that the company’s total revenue has declined by 40% over the last six years.
These numbers show that General Electric has seen a 40% drop in its total turnover due to technical developments and ramified economic change.
These comparisons show that Rolls-Royce Corp has performed better than General Electric company.
Rolls-Royce Corp’s cost leadership and product differentiation strategies have helped to overcome the negative effects of the global economic downturn.
Total revenue (millions)
The decreasing graph of General Electric’s total revenue reflects a company that is experiencing poor business performance, which is reducing its business value.
The analysis shows that Rolls-Royce Corp has been experiencing a negative slope in total revenue over the last five years due to the slow global market for Automobiles.
Rolls-Royce Corp, despite all the slow market conditions, has seen various ups, downs, but has maintained an effective growth in its business operations (Shahiduzzaman & Alam, 2014).
Both Companies Use Capital Structure Strategies in Global Recession
Global recession has had a negative impact on both companies’ business operations.
Rolls-Royce Corp has made improvements in its manufacturing, design and distribute power system for aviation.
Rolls-Royce Corp has a core competency in selling and manufacturing as well as the distribute power system for aviation. (Forecasting 2006).
Rolls-Royce Corp has made significant changes to its capital structure due to market bubbles and other environmental factors.
In 2010, Rolls-Royce Corp wanted to increase its total capital. To do this, it issued shares on the market.
This capital raising strategy was used to lower its overall capital cost and increase its financial leverage.
General electric, on the other hand, suffered high losses from its business due to its poor capital structure and low productivity.
Businesses can be effective in coping with adverse global economic shocks
According to UK’s economic factors, it has been shown that demand for design, manufacturing, and distribution power systems for aviation and other industries has declined by 17% after the global recession and slow market conditions. This is in comparison with data from 2007 and 2016.
After evaluating economic conditions, the demand and supply of these companies are analyzed.
Rolls-Royce Corp is a leader in energy consumption and power drilling services. Its products are very affordable and of better quality.
General Electric, on the other hand, did not lower the prices of its products or services, which led to a 40% decrease in its total turnover in both its domestic and international markets (Gossling & Upham, 2009).
The UK Market Tax Policy and Provision
Rolls-Royce Corp has been working towards effective tax planning in order to lower its total tax payments to the UK government.
It had invested in various charities and other provisions to allow it to take tax deductions from its net tax payable amount.
General Electric, on the other hand, has not maintained effective taxation policies and had several cases to eliminate the cascading effect of its tax payments.
The company also had problems paying tax under the double tax avoidance agreement between the UK and other countries (Capoccitti Khare, Mildenberger 2010).
Market Share of Companies that Provide Design, Manufacturing and Distribute Power Systems For Aviation And Other Industries
All current and potential clients are accompanied by it.
Rolls-Royce Corp is believed to have been successful in capturing the business-to-business segment market.
It has captured 20% of the domestic market and 10% international market to provide design, manufacturing, and distribute power systems for aviation.
General Electric has also been active in capturing the business to client and business to business markets to increase its overall turnover.
According to its evaluation, General electric adopted business strategies to diversify its business due to slow market conditions and the low business environment that was triggered by the global recession.
General Electric Corporation’s diversified business plans help it to protect itself from all negative effects of global recession (Barker, Ekins, and Foxon 2007).
After looking at all economic factors, including design, manufacturing, and distribute power system, for aviation, in which Rolls-Royce Corp has operated, it is clear that both companies have done their best to withstand the global recession’s negative effects.
Rolls-Royce Corp has seen an increase in profits and a rise in its international and domestic market share.
General Electric, however, has suffered losses and a decline in total turnover due to slow market conditions.
Both organizations made the best decisions to combat the adverse effects of recession and slow market conditions.
Rolls-Royce Corp nevertheless adopted the most appropriate strategic plan for cost differentiation and product differentiation strategies in order to capture business to business clients both domestically and internationally.
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