Defence contractors and diversification into the civil sector: Rolls-Royce, 1945–2005

Abstract

A number of studies have shown that defence contractors have exhibited a marked reluctance to diversify away from defence and develop civil applications. However, the aero engine manufacturer Rolls-Royce is one defence contractor to which this does not apply. Over a 60-year period it has moved from being almost entirely dependent on defence work to a point where defence now constitutes barely one-fifth of its turnover. This article examines the development of the company's civil aerospace business over the period since 1945. It focuses specifically on the strategies used by Rolls-Royce in the civil aerospace field. These strategies are explored in the context of changes in market conditions, technology, and governance arrangements. The effectiveness of the various strategies, including their contribution to the company's current position, is evaluated.

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