Business Strategy Outcome 1

8/13/2019 Business Strategy Outcome 1

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By: Romal, Jehangir, Fakhar and Moez

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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/

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