Strategic alliances and competitive strategies in the European aerospace industry: the case of BMW Rolls‐Royce GmbH

Strategic alliances are an important feature of the aerospace industry and many studies have sought to evaluate their performance. Most have taken a policy perspective exploring the economic and political benefits claimed for collaboration of this type. The perspective is a reflection of the political origins of many aerospace alliances. This study seeks to evaluate, from a managerial perspective, one of the newer alliances established on a strictly commercial basis. It focuses on BMW Rolls‐Royce GmbH, one of a small number of truly European alliances. The study concludes that, although Rolls‐Royce bought out its German partner after a decade of operation, the alliance was a success. The two engines developed by the alliance over this period were a technical success, overall sales were well on target and the alliance was about to break even. In addition, the study concludes that the alliance formed a key element in Rolls‐Royce’s successful strategy to extend its product portfolio, a strategy that elevated the company to second place in the global aero engine market.