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"In 2009 the world felt the acute effects of the global recession. Oil demand experienced its steepest drop since 1982" Said Jorma Ollila Chairman of Shell. (Jorma Ollila, 2009, Shell Annual Report 2009 p.6) When Shell facing keen competition and global recession in oil and gas industry, their strategic information needs are become important in future development and growth, lower their products and services cost, product differentiated with adding special and unique feature as a result of achieving competitive advantage from their strategic information systems.
Focusing a separate target market segment and eBusiness planning activities to value add for difference group with innovate information system to link between customer and organization which using Customer Relationship Management (CRM) tools to build up services of excellence and create customer loyalty for Shell.
Strategic information systems act as new method of doing business and a new channel to introduce a new products, services, ideas, concepts and which a communication channel to link up the internal and external environment. It also a competitive weapon for Shell to affect the market share, customer relation build up, product profit margin, Shell take advantage from their strategic information against their competitors.
Strategic Information Needs
Under the period of global economic recession, Shell strategic information needs become more important in all phases of products and services. Keep long term development with its business objectives and directions under the keen completion oil market, develop and plan an essential strategic information is a competitive weapon for Shell.
From the Shell corporate strategy to reinforce their marketing position as a leader in the oil and gas industry, strategic information needs developed meet their corporate business directions and objectives. Also, Shell strategy is "More Upstream, Profitable Downstream." (Table 1. Shell Business Portfolio), and Shell focusing on delivery and growth, leveraging their strong business portfolio, thus, Shell strategic positioning (Michael E. Porter, 2001) focus on a difference target segment, Upstream and Downstream, Shell aim to work closely with their customers, partners and policymakers to advance more efficient and sustainable us of energy and natural resources, Shell focus on a different market segment, for example, its products and services in four major group, one is on the road, second is solutions for business, third is in home market and last for Motorsport industry, in difference kind of products and services, which can deliver their products and services at lower cost in differentiated market and target group, therefore, Shell strategic information to provide the update and adequate market information of business expanding and opportunity in particular market segment which an achieve a competitive advantage (Michael Porter, 1998) in the market.
From a point of view, Shell delivers their products and services at lower cost that will gain competitive advantage. The cost means the daily operational cost, delivery cost of products and services on corporate activities, internal cost and another external cost. Saving and lower cost in the market place which means earn a plenty of money on return on investment.
Not only a competitive advantage, Shell strategy information try to look at the major influences on a competitive environment. (Michael Porter, 1998) Its competitive advantage forced to benefit the marketing position. Also Shell senior management can assess information by offering external date from internal operation and its supply chain. Strategic information directed company objectives and directions for the future business growth and development for creating their value chain.
On the other hand, under the keen competition in oil and gas industry, sustainable development is another major strategy needs for Shell, its strategy convinced management to direct their value to creating business opportunities, switching operation costs and financial risk, it help to access market distribution in economies of scale, that making Shell reach a more competitive and profitable segment in the market.
Deliver a differentiation products and services means add the unique features and values which are competitive attractive for customers. According to the Shell web site, management in order to maintenance sustainable and profitable growth, Shell committed most of technology and innovation to building a core development technology and innovation strategic needs in the products and services which supported by whole process and daily operational. Shell technology and innovation, raised up ideas and products differentiation which can help customer getting extra product values. Under the effect of global economic recession in oil and gas industry, new ideas develop, concepts create, creative solution and technology become important to survive under the keen market competition. On the other hand, to encourage sustainable and profitable growth, (Jose Bravo, n.d.) Shell technology and innovation take advantage in oilfield automation production systems, which demonstrating by result of expansion in sales volume and minimize the geographical distribution cost. Shell also installed Global Solutions software at several of its gas fields to transform real-time data into continuous estimates of oil, water and gas rates for all wells. Under the data acquisition systems and distributed control systems, management can reach the update marketing information which desire to maintain long-term growth and gain maximize business performance.
Moreover, Shell provide their strategic information which enhancing company images and reputation in Shell website, they provide a large amount of information such as company vision and mission, core value, products and services, locations, global solution and world-wide branches, it connected corporate, business and customers in a business line.
Under a well developed strategic information system, its communication channel better provide more information to give the public an in-depth insight to the organization, it help to build up their Intranet and Extranet to gain a competitive advantage to deliver a products and services at a lower cost rather than its competitors. Pricing advantage of the products and services is accepted by customers, the return on investment result in higher margins and higher returns. Another returns is customer satisfaction, Shell create a differentiate advantage in unique and desired features which can be markup in a premium price as result of higher revenue return. Therefore, Shell strategic information systems enhance the company relationship with customer, affect the market share, revenue and another marketing opportunity. Thus Internet bring customer into the new products, new markets and new ways of doing business as customer just have a simple click on web pages and greatly affect Shell gaining an competitive advantage against their competitors.
Strategic Information Systems
The information system as a competitive weapon, with the help of information system technology, a company can become competitive in all phase of its customer relationship. (Blake Ives and Gerard P. Learmonth, 1984, p.1193) As a weapon to gain competitive advantage, Shell information system is a critical resource for their business development and future growth. Information systems are categorized into operational, tactical and strategic, operational information system is day to day very short term period planning, it is flexible for management to adapt as quick as possible, tactical is used for 6 to 12 months long term planning and it should be used with strategic information plan and mainly for company objectives and using the strategic information systems in long term period 5 to 10 years.
Provided by Shell's website, a long term strategic information systems is implemented for acting as a competitive weapon, we can defined for two categories, one is direct benefit to customers, second is direct benefit to Shell.
First, Shell keep the environmental and society section to explain they are concerned of environmental protection, safely and securely working environment, report, information and data opened for public, external review committee, there are plenty of channel and information provided and given a clear picture for connecting customers and organization. Also, such a wide range of product line series to arouse public awareness of Shell products and services, there are four major products and services categories, their oil, fuels and gas, cards services, solutions for business, etc, for difference target group. Customers can direct gain benefit from Shell information systems, it means that Shell deliver their product and services for only a one click operation with a mouse. Also, Shell enhance their distribution channel and delivery a new ideas and concepts to customers, it links between customers and corporate through a network of Shell website.
Second, on the Shell side, main purpose for the website designed is linked between with distribution channel, internal and external information systems, this linkage will enhance with customer and corporate feedback channel, thus, Shell information delivery cost, distribution cost and services cost can keep in lower price. Lower price strategy means Shell take advantage of higher profit for their future growth and development.
As a result of facing a keen competitive environment under the global recession and steepest drop of oil demanding, Shell developed their breakthrough eBusiness planning in the strategic information systems, in the whole Shell's website, their e-Business planning activities already linked between their business objectives and directions, web-based design take care of customers needs, customers can browser the web pages for gathering plenty of information that tend to perform transaction. Shell information system provides a full range of services under a Business-to-consumer (B2C), Consumer-to-business (C2B) and Consumer-to-consumer (C2C) environment that means Shell online business can distributed to worldwide and have a full scope of coverage in Internet and Extranet, for example, widen the information distribution channels, open 7 x 24 hours services, the web pages designed for greater chance for consumers under their self online purchasing.
On the other hand, Shell not only for expanding their sales channel, it made use of the website for their promotion events, website provide a large amount of update company information , future planning latest news and highlights from internal and external sources. A kind of button "contact us" provide information contain contact phone number, address and email, which it the best communication channels connect with consumer and corporate for holding up a marketing researching, data collection, web design interact with customer, that allows Shell to distribution information to the public as acting eMarketing information system in order to reach customer with their new and innovative business at lower distribution cost.
Moreover, Shell provide eBusiness planning activities as their competitive weapon, Shell developed eBusiness planning and use advanced technologies to make it easier and faster for customer at any convenience doing business with them. Shell eServe is their powerful web-based tool for online transactions and provided 7x24 hours, 365 days to place an order, Shell eRouter developed Electronic Data Interchange (EDI) for a large corporation to ensure transaction is efficiency and accuracy, Vendor Managed Inventory (VMI) developed to help customer to keep track their stock requirement and Self-Service Interactive Voice Response (IVR) help customer by a phone at anytime period. From the above Shell eBusiness planning, Shell eServe outcome is no telephone queuing and it is simply provide telephone orders by IVR at any time slot, which is lower the products and services cost and given internal and external cost saving. Therefore, target difference group in difference market segment in oil and gas industry and provide the tailor made eBusiness solution to target customer which will gain customers loyalty to your products and services.
Also, VMI and EDI designed for a medium or large corporation to connecting Shell system to check their order and maintain the stock level at any time, it is not only lower customer purchasing cost and help customer forecasting their future fuel usage. These are the competitive weapon that means Shell provide their products and services in differentiated. eBusiness planning is a differentiation marketing tools which add value for their customer, such as these unique features is added, Shell can gain the competitive attractive in the market, therefore, Shell eBusiness planning make a great success in the market, their products are tailor made for different target groups, they provide online transaction, touchless transaction which applied for difference group, once the target group feedback and gain advantage from information system, Shell will lead the standard in the market, competitors and market followers is difficult to add same features for Shell customer.
Knowledge Management (KM) is a key for achieving competitive edge, Shell applied their continuous strategic information systems meet their company objectives and policy, moreover, in Shell's website, they provide a plenty of information for public, provide knowledge management system is another competitive weapon for Shell. It is the most important resource for collecting of customer experience, skills and understanding their buying habits for daily business practice. Shell's website design is divided by many sections and functional button, Environment & society, Innovation, Products & Services and About Shell information button, easy and user friendly design for the public simple one click on mouse for information seeking. On the front page of website, there are many update news and most popular topics here. Moreover, they design difference group for target customer to click in, large amount of information contain in website help to develop a continuous knowledge management and it is facilitate to acquire customer feedback from external marketing environment, these update marketing information which help organization have a flexibility planning to catch up with shifting market demands.
Furthermore, Shell's portal shares their best practices for knowledge learning and information seeking in their home pages, it developed their culture of knowledge sharing and learning, it helped to leveraging knowledge from customer and organization, drive them direct to company objectives. (Keri E. Peralson and Carol S. Saunders, 2006)
To keep competitive advantage, Shell KM strategies aim to increase their ideas creatively and innovatively to prevent competitors from copying and improving their products, therefore, Shell provide the services of eServe, eRouter, VDI and IVR, which create product differentiated, these innovative idea means that Shell deliver high quality products and services. Also, Shell globalization strategy means products and services can be sold worldwide, every country have difference kind of language, we need to explain in products and services knowledge embedded, English, Chinese, French, Japanese, etc, that complicated communication greatly affect distribute their objectives and goals. Therefore, in Shell global home page, they provide the Bilingual language both in English and local language, setup of difference domain name such as dot fr (www.shell.fr), dot de (www.shell.de), etc, that will help to add extra values in worldwide and local customer learn Shell products and services in a simple knowledge base strategy. In this simple knowledge transfer method, Shell employed the local worker and expertise, it is effective and efficiency to manage and allocate their manpower resources. Shell also gathering figures and feedback from internal and external environment through their webpage via email, customers and worldwide staff feedback their suggestions and useful marketing information that mean Shell can react the marketing immediately.
Customer Relationship Management (CRM)
Shell knowledge management systems successful provide their customers for their products and services worldwide, to connect the customer, their customer relationship management (CRM) starting at a fruitful way. They provide their simple fuel management touchless eBusiness tools which provide automated methods for order processing and invoicing, these customer oriented tools is personalization and tailor made application which target at customer convenience for placing orders with their accessing account and product information. Touchless services keep saving customer time for their easy and optimize design, customer can use their automated tools at the whole process of transaction from purchasing and supply management.
In order to best fit customer specific business needs, Shell offer a range of CRM tools of Shell eServe, eRouter, VMI and IVR, these tools provided outcome is customer no telephone queueing and customer can check their order status and information, inventory levels at any time. It means that customers can have operation efficiency when do business with Shell at any convenience time and have their flexibility to saving time.
From point of view, Shell CRM tools add an extra value services to customer and make their services differentiation which prevent the competitors from copying. Also, Shell provide the services in unique features and special, once the customer is familiar and interest in these CRM tools, customer no intention and difficult to change their oil and gas provider, for example, from Shell competitors websites, Mobil (www.mobil.com), Caltex (www.caltex.com), etc, market do not have same tools as Shell gain advantage as a first mover in the market to provide their creative CRM tools.
On the other hand, when new customers place order or ask an enquiry from the website, they need to fill in their contact information such as company name, address, phone number, email, etc. That will help Shell to gather customer data and information, manage these customer data, we can send via email newsletter to notify customer about special events and new products deliver in the market for latest update. That is an easy method to gather customer information to setup their communication channel to link between customer and organization.
Lastly, when difference group of customer access their website to place their order, Shell can acquire their customer online date and their repeat order frequency, these sequentially date visit and continuous purchasing practice may help Shell to study the update marketing information and quick response for strategic information planning. Therefore, as customer relationship is linked up as a result of building of band and customer loyalty. From the Shell customer satisfaction index from year 2007 Quarter Two (Q2) 55% reach year 2009 Quarter Three (Q3) 93% (Table 2), that means Shell meet customer satisfaction and customer will repeat place their orders in Shell every site, every visit and every day. (Shell Oman Marketing Company, n.d.)
While Shell is the market leader in oil and gas industry but facing the keen competition from their competitors, the global economic recession and step drop of demanding, continuous planning and developing their strategic information system is a challenging work. Global strategic information system as a competitive weapon, they gain competitive advantage by operating products and services at a lower cost and maintain a higher price. It means Shell achieved their operation effectiveness and gain more profit margin than their competitors.
Secondly, product and services differentiated, adding special and unique features are competitive attractive for customers. Thirdly, eBusiness planning target on specific market segment and innovative technology such as eServe, eRouter, VMI and IVR help to attractive new customers.
Lastly, their CRM application delivery of excellence, they drive their performance and services improvement to link between customer and organization. It build up of brand and customer loyalty, once the loyalty build up, Shell put emphasis on quality and services advantages to customer ensure that customer not switching to their competitors.
Although Shell has a great successful for their strategic information systems but there are some room for improvement. In Shell website, there are a vast information contain and easy click through any link to the category but on the other way, plenty of information which lead a customer not easy to find the right content and right information, therefore, too much information which result of customer less focus on their business needs. On the other hand, when a customer just click an icon of "contact us", customer still cannot find any email address to contact whom involved for customer support and question raised.
Despite of a little drawback, in conclusion, Shell strategic information is successful have good effect in the market, their planning for a premium situation arises such as operational effectiveness, lower cost, product differentiated and attain competitive edge over the long time period.
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