Political Factors:

The political factors in the Rolls Royce PESTLE Analysis can be explained as follows:
Rolls Royce is a British company that operates across the globe. Since the automaker sells
across various countries in the world, various political reasons are prevailing in these countries
that directly affect its sales. In the European market since the conditions haven’t been as stable
as those in the Asian countries, the company’s operations have been affected. With post-Brexit
news, there were certain issues that the company faced, in terms of increased costing and
lower sales, and reduced ease of operation. Rolls Royce has another area of operation that is
related to the army and aircraft. It supplies the various advanced vehicle engines to the armies.
With the existence of lobbying and pressure from certain US/EU countries, the company has to
bend its course of action according to the country in power. A benefit that Rolls Royce gets is
the power associated with when working with the army and air force. It has a good hold and
can try and influence various political situations in its favor.

Economic Factors:
Below are the economic factors in the PESTLE Analysis of Rolls Royce:
Since Rolls Royce operates across various countries, the level of economic stability in that
region plays a major role. The segment in which it operates is a premium, and its customers are
usually high-end people who can afford the automobile. The change in exchange rates might
affect the company, but not so much, since the buyers are already premium. The Rolls Royce
company might get affected by a recession, like in 2008-2009, and the sales might go down. The
production is more than that is required in the market, which again leads to increased
inventory cost, but again since the demand is unpredictable and depends on the season. There
might be periods where the sale is increased due to multiple buyers of the automobile,
followed by periods of no or minimum sales. With the duopoly of Airbus and Boeing, it is tuff
for Rolls Royce to capture a large segment in the commercial aircraft market.

Social Factors:
Following are the social factors impacting Rolls Royce PESTLE Analysis:

Rolls Royce t is a brand that is widely known across the world, for beautiful automobiles. These
cars are a piece of art and are a status symbol. Owning Rolls Royce means a lot and is known to
make an impact on the society. Though the company is now owned by BMW, the brand still has
a standalone name in the market. Since the company’s venture into the aerospace segment is
not much known, it is less appreciated. Rolls Royce is also involved in the manufacture of civil
aircraft engines, and with the recent rise in air travel, the stakes are high for the company. With
more customers for its civil aircraft market, the company can become more profitable and
more influential. One challenge the company might face is the tuff competition in the
aerospace segment. With more players trying to enter in, Rolls Royce might have to redo its
finances to maintain its profit. The company will see a rise in sales, especially in the developing
countries in the Asian market. The income levels have increased in the urban areas and owing
to an automobile from the company is of significance. Since the company operates in the posh
and premium segment and has its own value, it cannot be sabotaged by any other company
easily.

Technology Factors:
The technological factors in the PESTLE Analysis of Rolls Royce are mentioned below:
With Rolls Royce working in the aerospace segment, the latest technology is a mandate to stay
in the market. The company is expected to invest more in its R&D projects related to
developing new and upgraded technologies. In 2016, the company had applied for around 700
patents to protect its intellectual property. The company has various classic cars in store, and
with the changing trends, it might think of going emission less. There are various startups like
Lunaz from the UK, who are willing to work with classic models of automobiles, and strip them
down to their exterior body, and remodel them to be electrified. Rolls Royce also has an
opportunity to go completely electric or produce hybrid vehicles, in its latest lines. The
company has been working on cars in the future and has launched a prototype of the 103-EX,
which seems to be from a different world. The car is the perfect amalgamation of present
technology and all the necessities of the future.

Legal Factors:
Following are the legal factors in the Rolls Royce PESTLE Analysis:
When company’s like Rolls Royce work across various countries, there are various legalities
they need to follow. Various environmental laws change, which affects the production of
automobiles. An example of this is the shift in India from BS4 to BS6. Though the change was
spread across a period, it was still a drastic one for the company. In many countries, the rules
for hybrid and completely electric vehicles have not yet been defined appropriately which
poses a further threat to the company if it launches its hybrid vehicles before the rules are
established. A change in any of the legalities, will lead to the implementation of major changes
and thus affect profitability. To avoid being sued the company needs to keep a tab on the
quality of all automobiles it produces. It needs to abide by the anti-bribery act that has been
established by various countries. A recent example is when the CBI booked Rolls Royce in a
bribery case, that involved paying an agent to get the HAL and other public sector contracts.
These cases tarnish the name of the company and also affect them monetarily when the
damages to be paid are high. Beyond the legal difficulties faced, Ford needs to work on the
pricing policy according to the different countries it operates in. It needs to keep the legal
framework of different countries in view when manufacturing different models, since the
regulations related to product design and safety may vary.
Environmental Factors:
In the Rolls Royce PESTLE Analysis, the environmental elements affecting its business are as
below:
Rolls Royce believes in the fact that, what they do, matters! With various players venturing into
the renewable sources market, it is expected to become more and more competitive in the
future. These efforts will reduce the cost of electrical energy by making it more flexible, and
also reduce the usage of fossil fuel. Rolls Royce is working towards attaining maximum use of
these renewable sources. It has laid down one of the largest sustainable supply chain systems
and wishes to deliver more efficient products and services through all its segments of
operations. The engines that the company produces have become more advanced with hybrid
technology and low emissions. This ultimately leads to a lower impact on the environment.