| Summary: | The market value for 150 seater engines in the next 20 years will be approximately US $185 billion. Rolls Royce's market share is only around 5% of the current 150 seater market. In addition, the company is currently facing various operations and organisational issues. After considering these factors and the price elasticity demand of the 150 seater engine market, it is recommended that the company should not attempt to increase market share by competing in price but rather it should differentiate its engine and sell it at a premium price. At the same time, the company should improve its operations efficiency in order to maximise profit in the market.
Based on Gattorna's supply chain model, in order to respond to market demand, the company needs to configure its operations to be an 'agile' supply chain, characterised by responsiveness and flexibility. It is expected that by having an agile supply chain configuration, the company will be able to respond to the demands of the new 150 seater market.
There are six major aspects in which the company should improve in order to be responsive as well as efficient. These are to improve supply chain visibility and effectiveness of both engine manufacturing and aftermarket, to introduce a dual supply chain system, to offer different options of TotalCare' agreement, to implement modular organisation structure, to implement effective performance and reward systems and to increase IT/ERP and business alignment maturity levels.
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