business strategy outcome 1
TRANSCRIPT
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By: Romal, Jehangir, Fakhar and Moez
1 | P a g e
CONFEDSchool for Professional Studies
ContentsBusiness Strategy .......................................................................................................................................... 3
Contexts of business strategy ................................................................................................................... 3
Mission .................................................................................................................................................. 3
A clear business mission should have each of the following elements ................................................ 3
Example (Shell) ...................................................................................................................................... 4
Vision ......................................................................................................................................................... 4
Examples ............................................................................................................................................... 4
Objectives ................................................................................................................................................. 4
Example ................................................................................................................................................. 4
Core competencies ................................................................................................................................... 5
Example of (MacDonalds) .................................................................................................................... 5
Strategic control ........................................................................................................................................ 6
Example of Apple .................................................................................................................................. 7
Identifying the concepts in an Organization ................................................................................................. 7
Mission ...................................................................................................................................................... 7
Objectives ................................................................................................................................................. 7
Vision ......................................................................................................................................................... 8
Goals ......................................................................................................................................................... 8
Brief analysis ............................................................................................................................................. 8
Shells contribution to Pakistan ............................................................................................................ 8
Discussing the strategic Concepts of Shell .................................................................................................... 8
Recommendations .................................................................................................................................... 9
Stakeholders ............................................................................................................................................... 10
Stakeholder Risk ...................................................................................................................................... 10
Internal Stakeholders .......................................................................................................................... 10
Connected Stakeholders ..................................................................................................................... 10
Response Risk ...................................................................................................................................... 11
External Stakeholders ......................................................................................................................... 11
Response ............................................................................................................................................. 11
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Stakeholder Analysis ........................................................................................................................... 11
Stakeholder Roles ............................................................................................................................... 12
Dependence on Stakeholder ............................................................................................................... 12
Stakeholder Interest Areas ................................................................................................................. 12
Stakeholder Map ......................................................................................................................................... 13
Stakeholder Grid ..................................................................................................................................... 13
Shell and its internal stakeholders ......................................................................................................... 14
Share holders ...................................................................................................................................... 14
Employees ........................................................................................................................................... 14
Suppliers .............................................................................................................................................. 15
External stakeholders - interest groups .................................................................................................. 15
Shell ............................................................................................................................................................. 17
PESTLE ..................................................................................................................................................... 17
SWOT Analysis............................................................................................................................................. 19
SWOT Analysis of Shell ............................................................................................................................ 19
Strengths: ................................................................................................................................................ 19
Weaknesses: ........................................................................................................................................... 19
Opportunities: ......................................................................................................................................... 20
Threats: ................................................................................................................................................... 20
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Example (Shell)
Shell mission statement is manufacturing and supplying oil products and servicethat satisfy the needs of our customers.
Shell continues to deliver a great amount of quantity to our stakeholders byproviding a great rank or a quality station and maintaining our high
performance plus improving our standards.
Vision
Vision defines as what the organization actually wants to be or where they can see their
self in the future as a successful company. Sometimes a vision statement describes as a
picture of your company but itsmuch more than that its your inspiration actually.
Examples
Some charity is working with the poor people and their vision statement will be a world or
any area without poverty.
Shell vision statement
They want to be the market leader and to deliver the best quality value to ourstakeholders
To be on top list performing and most admired refinery in Asia.Objectives
When we talk about objectives or a goal here we mean a target which we would like to
achieve in the future within an expected timeframe plus with available resources.
Sometimes objectives give the business a clear-cut target view that what have to be
achieved. Objectives are the statements of specific outcomes that are to be achieved; it is
desired or needed results which have to be accomplished in a specific time period.
Example
Some main objectives of shell;
To meet our customer requirements. To provide continuous sustainable health, safety, environment and security
excellence.
Give benefits to our shareholders.
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Core competencies
First of all the term Competency refers to a combination of skill and behaviour which are
directly related to successful performance on the job.
Core competencies are the skills, attributes and behaviour which are considered important
for all the staff of the organization. It is a unique ability that a company acquires from its
founder or develops which cannot be easily imitated. They are the sources of competitive
advantage and are the building blocks to future opportunities.
Example
The core competency of Apple
Customer
benefit
Yes, the customer clearly benefi t f rom the
great user.
Dif ficult to
imitate
Yes, the companies have been trying for yearsand not yet succeeded
Uniquely
identi fy the
organization
Yes
Can be leverage Yes, this core competency has been rolled outto the iphone. Ipod and ipad recently
Goal
In future if you really want to see your business as successfully then its important to
describe and set your business goals to achieve it, especially before you started. At simple, a
goal is something that what you aim for but remember goals are one of the powerful
benefit factors for the growth of a successful business in future in a several ways.
Example of (MacDonalds)
In the next few years MacDonalds aim is to achieve these goals in future.
To develop more new menu offerings so that there will be a large variety ofchoices for our customers which will be provided in coming future.
To develop more happy meal choices, including non-carbonated beverageswithout added any sort of sweet.
Focuses on to our time-table for new nutrition information. To make sure that we are advising by best scientific information regularly.
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Strategic control
Strategic control is a type of management strategy that managers use to manage their
employees and to control the behaviour and performances the employees. This can also be
defined as the process of monitoring as to whether to various strategies adopted by the
organization are helping its internal environment to be matched with the externalenvironment. Strategic control process allows managers to evaluate a companys program
from a critical long term perspective.
Types of strategic control
Premise control. Implementation control. Special alert control. Strategic surveillance.
On going
process
Shaping and
achievingbroad plan
Broad plans
are for
achieving
strategic
External
environment
Topmanagement or
internal
environment to
achieved
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Example of Apple
Any organization with their strategic capabilities becomes a
leading icon in strategic development and when they start
exploiting and expending their capabilities in such an innovative
way so it becomes harder for other competitors to compete or to
produce new markets opportunities. E.g. like Apple has always
been using its leading IT knowledge in introducing every new
product with revolutionary IT techniques to capture the new market.
Identifying the concepts in an OrganizationThe organization which we have selected is Shell. Shell is a worldwide group of energy
and petro-chemical companies. They have around 93,000 employees in more than 90
countries internationally. Shell helps in to meet the worlds growing demand for energy in
environmentally, socially and economically. Shell has been helping to meet the worldsenergy needs for over a century and is ready to help tackle the challenges of the new
energy future.
The concepts which are identified in the shell business organization
Mission. Objectives Goals Visions.Mission
Shell continues to deliver a great amount of quantity to our stakeholders byproviding a great rank or a quality station plus to maintain our high class
performance in the future.
Constantly achieving operational excellence. Conducting our business in a safe and secure environment. Manufacturing and supplying oil products and services that satisfy the needs of our
customers.
Objectives To deliver structure cost reduction. To maximise refinery margins. To meet our customers requirement. To safe guard assets integrity. And provide benefits to our shareholders.
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Shell says that their vision is to reinforce their position in the world as a leader in the oil
and gas industry in order to provide a competitive shareholder return while helping to
meet the energy demand in a responsible way.
In the upstream the company focuses on exploring for new oil and gas reserves and
developing major projects where their technology adds value to the resource holders, whilein the downstream their emphasis remains on sustained cash generation from their
existing assets and selective investments in growth markets.
Shell is improving its customer experience every day. With the
experience of years, Shell has been able to develop new
technologies to enhance the customer experience as it offers a
wide range of products for different customers like improved
petroleum quality for the customers having high performance cars etc. Shell has also made
major strategic retreats in the few years. Recently, it has retreated from alternative energy
and is again refocusing on its core oil and gas business.
Recommendations
Shell is ranked as the eight largest company in the world so it should take a lot of care
about its reputation as it has been involved in many controversies lately. It has been
involved in cases including oil spillages, environmental pollution human rights and has also
been accused of bribing the military in Nigeria. So, it should try to take more care so that its
reputation is not harmed or these can affect the companys progress as it wants to be the
worlds leading company providing oil and gas.
The company has also tried to diversify its core oil, gas and
chemical businesses. These include nuclear power, coal and
metal, hydrogen and electricity generation. None of these were a
success and all have now been divested. It suffered a huge loss.
Shell should be more careful in investing in other business and
should lay its emphasis on oil and gas. It should mostly invest on resources of oil and gas.
The overall vision of the organization should be to lead the oil and gas industry and to
develop itself according to the change in demand of their customers in a profitable way but
at the same time this should be environmental friendly and should not cause any harm to
the social values. Shell should also work for many social causes by operating different NGOs
for deforestation, betterment of education and for the help of disaster affected people
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StakeholdersThey can be any Individuals, groups or entities which have a certain interest in the
company or firms activities or get affected or influenced these activities or the firms
performance. The strategies of organization to meet these objectives will also be affected
by the external factors.
Stakeholder Risk
Some Strategies that are put into use by the company or firm may have risk involved that
may vary to the interest of different stakeholders. For example if a company increase the
price of its product and maximize their profits stake holders like shareholders and the
owner of the company would be really happy as they are making more money but stake
holders like the consumers of the product may not be pleased by this decision and certain
prices may even seem outrageous to the consumer and may boycott your product and even
form groups of protesters which will be bad for the reputation of the company and also it
may affect sales.
Internal Stakeholders
Are those individuals or groups which reside from within the business as executives,
managers, board members, employees, and trade unions they may benefit directly from
their contributions to the growth of the business and they may also be affected negatively if
the business does not perform well.
The internal stake holders are mostly interested Jobs/careers, Money, Promotion, Benefits,
Satisfaction. For example potential employees will be stake holders for jobs and careers the
investor and other stake holders such as shareholders and board of directors will want thecompany to make more money in order to get more money out of the business for personal
use.
Connected Stakeholders
Different stakeholders have different Interests such as shareholders have a common
interest of increase in the companys profits for better dividends and it may increase share
value while banks are looking forward to charge maximum interests on loans while
suppliers want their payments as soon as possible which does not allow the company with
good liquidity while the customers want good quality goods at low prices with little profit
margins, what a good manager or a leading role in the company should do is to keep all thestakeholders happy or at least satisfied by balancing out the conflicts between the
stakeholders and reaching a comfort point for all the stake holders for a smooth running of
the business
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Response Risk
If the stake holders are not satisfied by your arrangements they may react in a manner that
can have a negative impact on the business such as unhappy shareholders may sell their
shares which may bring down the market price per share and this can also sometimes
connect a chain reaction as people start selling their shares other people panic and sell
their shares out of fear for losing more money if they sell it later and this keeps going on till
the shares are almost worth nothing. If the suppliers are not kept happy and there
payments are not reached on time then they may deny credit terms with the company or
firm and demand advance payments which might be impossible to provide by the company
and may slow down any production processes. If any type of law is broken which may be
human rights or environmental issues then the city or an effected individual can sue u and
the business might lose a lot of money if the judge finds him guilty. If there is any defect in
the product or its quality the customer or consumer may start buying elsewhere or choose
a substitute for your product.
External Stakeholders
Individuals or groups such as customers, lenders or suppliers that are influenced by the
decisions of a business but are not members of the business. It is important to get the
perspective of both groups.
External stake holders have key interest in the quality of the products produced; efficient
tax collections pollution control and some interest groups will also have a look out for any
environmental violations.
Response
The govt. agencies may pass bills that include a higher tax on either supplies or your
finished goods which will increase the cost of production and higher prices may not be
accepted by the consumers. Violations regarding environmental and ethical issues may
bring about a bad image for the company and the consumers may boycott its products. For
example a fur production company in china made its products from fur that was skinned
from wolves rabbits and other animals that were killed and skinned brutally and spent
their whole in a small cage that did not even allow them to move properly. A wild life
protection agency took notice of the situation and filmed the process put it on the internet
and more than 60 percent of fur customers stopped buying fur related products
Stakeholder Analysis
It is the process of identifying the individuals or groups that are likely to be affected any
decisions or actions taken by the business, it shows the relationship and patterns of
interdependence between different stakeholders. Then this information is used to assess
the different interests of those stakeholders should be addressed. Stakeholder analysis is
an important part of stakeholder management.
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Stakeholder Roles
Good corporations will help to ensure that the corporations take into account the interests
of a wide range of constituencies, as well as of the communities with in which they operate,
and that there are accountable to the company and the shareholders. This in turn helps to
assure that corporations operate for the benefit of society as a whole.
Dependence on Stakeholder
As businesses depend so much on the stakeholders in the long run, we need to have great
relations with their stakeholders. For example businesses depend on banks when they
have cash flow problems such as a bigger initial investment or short term loans for credit
bases. All businesses in the long run depend on customers. Good relations with the govt. is
important as the govt. will take into consideration any problems relating taxes on raw
materials or any other supplies that may threaten the business costs to increase from its
sales as the govt. also needs these businesses to keep people employed. These are some of
the main dependencies on stakeholders there are also other important dependencies onstakeholders such as suppliers, employees etc.
Stakeholder Interest Areas
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Stakeholder Map
Interest/Aspiration
Power/Infcluence
Low High
Low Minimal
Effort
Keep informed
High Keep
satisfied
Key Players
Stakeholder Grid
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Shells approach to integrate its stake holder management into its worldwide business
practices involved the gradual development of a long term, comprehensive strategy.
Shell is often described by researchers as a leader among major international oil companies
for its efforts to integrate stakeholder management principles into its business practices.
Shell and its internal stakeholders
Shell's most important internal stakeholders are its employees, suppliers and shareholders.
Share holders
Other large businesses like shell such as Virgin, Sainsbury's, and M&S are owned by
shareholders. Shareholders play a crucial part in the finance and life of the business. They
provide a big part of the capital that includes initial investment and liquidity required to set
up and run the business. They take a reward from a share of the profits in the form of a
dividend. This varies according to how many shares they own and how well or badly the
business performed that year.
The shareholders then select a board of
directors which are most of the time
those who own large chunks of the total
shares issued from 5 to 50 or 80
percent shareholder. These boards of directors then represent the shareholders and
provide a direction to the company now these directors will have to look out to secure
shareholders investments as he will be worried about his shares as well. This is set out in a
long-term plan which is called a strategy. The directors are responsible for the
implementation of the strategy. The board of directors prepares an annual report which is
then mailed to each shareholder that lets them know how the business is doing and it also
allows them to know where the money goes out of the money and from where it comes
back in (financial statements).
Employees
Employees are important internal stakeholders. Shell
employs over 100,000 people worldwide. These include
senior international managers specializing in marketing,
finance, oil, sales, and gas exploration and other aspects
of the business. Other employees include market
researchers, geologists, site engineers, oil platform
workers, business office administrators, analysts and
many more.
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As stakeholders, employees are influenced by management but they also affect how Shell
operates. The employees' standard of work, commitment and motivation to health and
safety and excellence is vital in order to keep Shell as a leader in the energy field. Mistakes
can be costly in terms of reputation and the livelihood of other employees.
A main priority at Shell is to respect its employees and treat them in a brotherly manner. Itseeks to provide its staff with good and safe working conditions and competitive terms of
employment. This has a really positive influence on employees as it keeps them safe and
motivated.
Suppliers
Suppliers are also an important part of internal stakeholders and are Shell's partners in the
chain of production. Shell has some core values that are central to everything it does.
Shell's reputation depends on making sure that its decisions and actions reflect these core
values. Shell works with contractors and other partners in the supply chain who will also
be expected to show these values. If they do not, Shell will not use them.
External stakeholders - interest groups
Shell works with a wide range of interest groups. These are decision makers and opinion
formers. Individuals and organizations in positions of influence form opinions and make
decisions that can affect Shell. These include, government, academics media, business
leaders non-governmental organizations (NGOs), and the financial community, they
interact with Shell in different ways:
Governments - Shell hasoperations in different
parts of the world across
all regions of the globe. To
gain the approval to
operate in these countries
it has has to show the host governments that it is operating in the right way. This
includes paying taxes, creating jobs and providing important energy supplies.
Shell is also working with governments to promote the need for more effective
regulation on CO2 emissions
The business community- Shell supplies to and buys from hundreds of otherbusinesses.
Other oil companies- Shell works alongside as a partner on projects with otherinternational oil companies and other partners, such as government-owned oil
companies. Partnership activities have included building new refineries oil and
gas supply lines
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The media - it is important for competitive companies like Shell to operate inways that receive positive media coverage from television, newspapers, and
magazines. This reinforces its position in the market and can help to attract new
customers through a positive reputation.
NGOs often speak about problems, such as environment, human rights orhealth. They differ in their approaches, starting from offering services and skill
to promoting and campaigning organizations. NGOs frequently influence other
actors, counting main brands and big international companies such as Shell.
Shell involves and works with different types of NGOs on an even basis. For
example, it works with and absorbs from over 100 scientific and conservation
organizations in 40 countries. Partnerships with other groups help Shell to
increase its attitude to the environment. The 10-year association with
International Union for the Conservation of Nature has forced changes in its
procedures that have lessened the environmental influence.
Shell is dedicated to regarding human rights and helping people. The exploration for oil and
gas can take energy corporations to areas with lowly human rights records. Shell uses
different types of tools, regularly settled with NGO and think-tank input, to accomplish
risks.
If Shell selects not to work in these zones, this allows the less moral opponents to exploit
labors in these countries. If it stays then it can be a part of the solution. Shell will only
function in nations wherever it is capable of following its business values. These values set
out what Shell stands for and describe its conduct.
This report will focus is on the Royal Dutch Shell Group and carry out an environmental
and organizational scrutiny of the known business. In this analysis, the focus will be on the
internal and external environmental aspects that has an affect or an impact on the subject
company. The analysis used by the company is the PESTLE analysis that launches a more
thorough examination on the possible impacts of the factors that have been affecting the
conduct of the business of the subject company.
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earning capacity of the company, the staff attitude that includes the management style and
organizational culture.
The social factor has medium impact because the drive of the consumers to acquire the
products of the subject company since emotions or social factors has nothing to do with
this kind of need of the consumers.
Last but not the least, the technological factor of the pestle analysis takes account of the
Intellectual property issues, the research funding, the maturity of the technology,
information, and communications, internet, transportation, software changes. The
technological aspect is significant to the subject company because the changes and
advancements of technology will determine on how the company will be able to show
improvement in its business demeanor.
The political factor has a high impact on the subject company. Due to the conditions to
which one of the branches of it is located is the purpose as to whether the company will be
able to live to tell the tale at the feat of the within politics. The company is capable toperform with an approach to communicate to the laws of such condition and be obliged to
depart to any norms.
The next factor is the economy. A states economy establishes a devotion of the companys
achievement. Whether the company will be capable to catch the attention of investors or
stockholders is the economy feature of the subject company. Additionally, whether or not
the economy is capable to catch the attention of its consumers is determine by the safety of
the economy.
With the advancement of technology, its progression should not be restrained the law
though, the advancement should be interrelated to guard the environment. Therefore, thesubject company will be able to thrive if the entire company cooperates in the state where
it is located.
The social factor has the lowest impact on the company due to the cause that the demand
for the energy products by the consumers is not determined by the society. The internal
and external reason that may perhaps have a collision with the subject company is
determined by the means the company will be able to encounter it in the procedure. The
company nevertheless has been progressive in the way it carry out its business for the
reason that it has a plan of innovation and advancement.
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SWOT AnalysisSWOT stands for Strengths, Weaknesses, Opportunities
and Threats. The strengths and weaknesses of an
organization are linked with internal environment and the
opportunities and threats are linked with externalenvironment.
SWOT Analysis of Shell
Strengths:
The strengths are:
Shell is the largest in size and revenue in the global oil industry. The managers have affection towards their sub ordinates.
The trademark and brand is recognized globally. It has oil refinery plants in more than 45 countries. The employees of Shell are greatly motivated. Local employees are hired by Shell. They have no clash with the government. Care is taken about the hygienic factor. Effective means for the promotion of products are used. In-time delivery to petrol pumps is done. There are incentive based policies for the motivation of
employees.
The petrol pumps offered by shell are of internationalstandards.
The staff is kept up-to-date by mobile training units.Weaknesses:
Special packages to the regular customers are not offered by them. The core business activities rely only on oil products. The countries having the natural resources tend to have politically unstable
government.
Any kind of bonus package scheme is not offered. The total number of regional retail managers is eight which are not sufficient to
handle the problems.
Many of the filling stations dont have a tuck shop. Advertising of the products offered by Shell is not satisfactory. Many of the filling stations have no proper drainage system.
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Opportunities:
Innovation into alternative energy should be brought up by conducting research anddevelopment with colleges, universities and government research departments.
Partnerships with the manufacturers of complementary products can be useful,such as vehicle industry manufacturers.
As an international company Shell should introduce more packages. New reserves of oil and gas are found. Shell should try to move in areas with rich
reserves.
Company can install more CNG and petrol pumps in rural areas of Pakistan.Threats:
As an oil company, threats from stakeholder pressure groups advocatingenvironmental issues are there.
Threat of existing competitors moving into new markets. The smuggling of petrol from Iran to Pakistan. The installation of increasing filling stations by TOTAL.
Bibliographyihttp://wikipedia.com
http://google.com
http://shell.com
http://maxigood.info
http://valuedarticles.com
http://ehow.com
http://web-books.com
Organizational Restructuring within the Royal Dutch/Shell GroupBy Robert M. Grant
http://wikipedia.com/http://wikipedia.com/http://wikipedia.com/http://google.com/http://google.com/http://shell.com/http://shell.com/http://maxigood.info/http://maxigood.info/http://valuedarticles.com/http://valuedarticles.com/http://ehow.com/http://ehow.com/http://web-books.com/http://web-books.com/http://web-books.com/http://ehow.com/http://valuedarticles.com/http://maxigood.info/http://shell.com/http://google.com/http://wikipedia.com/