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Shell Oil Company is a subsidiary of Royal Dutch shell that is based in united state of America, shell Oil Company is a multinational oil company which major product is oil.
Shell Oil Company has its origins from Anglo Dutch, which is among the largest oil companies in the world.
Shell Oil Company has over 102,000 employees in more than 100 countries and its major work force is approximately 22,000 employees which are based in united sate of America. Shell oil company head office is in Houston Texas in united state of America.
Shell Oil Company has its own consolidated companies and its own equity. Shell Oil Company is one of the largest oil and natural gas producer, natural gas, markers, gasoline marker and petrochemical manufacturers.
The company is the market leader through approximately 25,000 shell-branded gas station in united state which also serves as shell's most visible public presence.
Shell Oil Company is a 50/50 partner with Saudi Arabian Government owned oil company Aramaco in Motiva Enterprise, shell oil also have a joint venture with Texaco by converting most of the Texaco station to shell brand name.
Shell oil company also have an agreements with Chevron to supply each other with the base stock of gasoline which is the refined to gasoline before additives such as v-power or Techno is added.
Shell Oil Company has its own refining and marketing which operates its three refineries'
The product of shell Oil Company includes oils, fuel and card service as well as explorations production and refining of petroleum product.
The relationship of shell oil company and its mother company Royal Dutch shell start in the mid 1990s when shell's business in the united state was substantially independent, with its stock been traded on New York Stock Exchange (N.Y.S.E) and with little direct involvement from the group's central office in the Hague in the running of the America business.
In 1984, shell Oil Company made a bid to purchase those share of shell Oil Company that it not own, which was the remaining 30% and despite some opposition from some minority share holders which led to court case, while shell Oil Company succeeded in buy-out for the some of $5.7 billion. http://www.shell.com/home/content/aboutshell/
1:2 SHELL OIL COMPANY MISSION.
Shell oil company mission is to manufacture and supply of oil product and services that satisfy the needs of their customers. And to also contribute to sustainable development helps create business value and reduce operational financial risk. http://www.shell.com/home/content2/mu-en/about_shell/ourmission_15110904.html
This case study aim to critically analyze the strategic marketing of shell Oil Company and the problems and opportunities that the strategy use brings to the shell oil company. Also the case study will also give a suitable recommendation to the operation manager a realistic implantations plan that consistent to the overall objective of the shell oil company. Most of the data used with this work of research are from official website of shell Oil Company. The case study also cover all the finding that are discover about shell oil company, the kind of data use by shell oil in conducting and management of the company.
2:2 Definition of market: A place in commercial world where forces of demand and supply operate, and where buyers and sellers interact directly or through intermediaries to trade goods, services, or contracts or instruments, for money or barter, Miller,k. and Layton, R.(2000)
2:3 Definitions of marketing strategy: This are the plan usually a part of the overall corporate plan which combines product development, promotion, distribution, and pricing approach, identifies the firm's marketing goals, this explains how the business will achieved within a stated timeframe. Marketing strategy determines the choice of target market segment, positioning, marketing mix, and allocation of resources. Cui, G.(2001)
3:1 SWOT ANALYSIS CONDUCTED ON SHELL OIL COMPANY.
This analysis is conducted on shell Oil Company in order to identify the company strengths, weakness and their threats. And this is seen in as a process of isolation and its important decisions are taken based on my finding about shell Oil Company. Michel Robert (1993).
Shell Oil Company falls into the situation of Analysis in strategic and marketing planning.
The swot analysis of shell Oil Company is as follow.
3:2SHELL OIL STRENGTH.
1: Strong brand name: Shell Oil Company has very strong brand names which are well known all over the world. The brand name is been derived from the good will and the name recognition of the company which are earn over the years, which was translates into higher sales volume and higher profits margins against other competing brand in the oil industry. Kotler, P.,(1997)
2: Good product: The product of shell oil like shell fuel, gasoline are a very good product which attract more customer in buying the product all over the world which most of their competitor do not have. Chris zook and james Alen (2001)
3:Huge capital: This is another major strength of shell oil over their competitors that give strength to shell oil because of their huge capital the company have in building refineries all over the world. Wong, K (1997)
4:High quality work force: Shell Oil Company is one of the best companies in oil and petrol chemical industries that have highest number of work force, this has always associated to the success, and they also implement flexible working strategy to their staff. Philip Selznick (1957)
5: They have the ability to sustain robust management system over the other major players in oil industries. Miller,k. and Layton, R.(2000)
6: Shell oil maximise their refinery margins: This is another area that makes shell oil have huge over the other player in oil industries because of their limited refinery and ability to manage their refinery to keep it in a standard way.
7: They deliver structure cost reduction: Most of the customer of shell oil company believes that shell oil product is relatively cheap that other company in oil business. Kotler, P.,(1997)
8: Introduction of shell card: This is another factor that give shell oil strength because of their introduction of shell card that allow their customer to pay directly to company via the shell card, and this also allow the shell company to monitor how much of shell product been used by various customer. http://www.shell.com/home/content/muen/shell_for_motorists/cards/shellcard_12141256.html
9: Wide range of product and service.
10: Shell oil has the right sell and they have a good distribution outlet all over the world
3.3 SHELL OIL WEAKENESS.
1. Operating in unstable environment. Conditions of operation in most of shell oil refinery are not suitable due to crises of shell oil with community people where shell refineries are build.
2. Corruption in oil business: this is another factor of weakness in shell oil company, this corruption are majorly cause by the government of countries where been build and the employee of shell company.
3. Establishment of partnership with stake holders.
4. Explore new fields.
5. Creating parties which will be held accountable for unethical practices in shell Oil Company.
6: Shell market research is not up to date
7: Lack of freedom: Government still have direct access control over shell Oil Company to increase the petrol and diesel price. Al and Laura Ries (2004)
8: Crude oil price: The crude oil price doesn't stays in one point. http://www.shell.com/home/content/products_services/on_the_road/oils/oils.html
3:4 SHELL OIL COMPANY OPPORTUNITY.
1: Extensive research development: Shell Oil Company has a quality research development that help in development of their staff, as a result of it give them more advantage over the other company in oil business. Mittal, B. and Lassar, W.(1996)"
2: Explore new field: shell oil have a joint venture with Texaco and other multinational companies which increase their span of growth and development.
3: Shell oil are been affect by many controversy in the past that want to make them loss their value. But they also have the ability to quickly amend those to thing
3:5 SHELL OIL COMPANY THREAT.
1: new oil player: this is the major factor that bring treat to shell oil, when there new oil company that are production similar product and are ready to sell it at a lower rate. Wong, K.(1997)
2: ecological factor: These are pollution course by shell oil to the community. R.H. Mac Arthur (1958)
3: lobby group: lobby group is one of the treat of shell oil wherein local and international legislature are been influenced in order to make law. Al and Laura Ries(2004)
4: Introduction of new regulations by OPEC.
5: Continued negative image and publicity.
6: continued discrediting of portion:
7: people using shell product are more price conscious as a result on inflation all over the world.
8: Continues government interference in shell Oil Company where they have their refinery.
4:1PESTLE ANAYLISIS OF SHELL OIL.
1: The policies of government on shell oil are factor affecting shell Oil Company for example of this policies affect the rate of production in oil business.
2: Tax on petroleum product by the government of the country where refinery are built, are factor to affecting shell oil business.
3: Political instability of government of the country where shell oil have its refinery.
4: The environmental factor: this is matter that arises from environmental pollution cause by shell oil which makes government lay embargo on production of oil product in some country.
1: unemployment: This are the number of able man and woman unable to attach them self to any work force in the society.
2:Gross national product trend: this are the factor that affect shell oil economically because of the pattern of gradual change in a condition, output or process.
3: inflation: this is another factor that affects shell oil when the price affects the growth of production in oil business.
1: Level of Educations: The standards of education of most of the employee of shell oil are not up to date because of government involvement in the human resource department of shell oil.
2: Population demographic of the countries where the refinery are built play a major factor.
3: Flexibility: Most of the employees of shell oil think that their jobs are not flexible enough which doesn't increase their lifestyles.
1: Introduction of shell oil card for payment for fuel at shell station world wide are not generally accepted my some country that are lacking behind technologically.
2: speed in technology world wide is another factor affecting shell oil.
1: T he cultural back grounds of the country where shell have its refinery plays a major factor as a strategy.
2: Impact of shell product on the environment: this course a major problem in Nigerian where the community that shell is building the refinery claim that shell oil are causing their land to be hazardous.
1: The health and safety law: they are enforcing by government on employer over their employees in other to have a better and safer work.
2: Some law which are enforcing by government that require the employer to employer certain percentage of people to shell oil which affect shell oil either in a positive and a genitive way.
5:1 STRATEGIC MARKETING USE BY SHELL OIL.
The strategic marketing being use by shell oil is basically based on price strategy of market penetration. The use the strategy to Measure of the extent of a product's sales volume relative to the total sales volume of all competing products. Beamish,P,Morrison,A.and Rosenzweig,P.(1997), expressed as a percentage. Formula: Sales volume of a product x 100 ÷ Total sales volume of all competing products. Shell oil stream line this strategy in three by divisions.
1. Sales and marketing.
2: supply and distributions.
This strategic marketing has help the shell company to enhance service delivery, it allow the company to offer faster deal of execution of sales., its make them to developed their customer long standing relationship with their suppliers in other to know their customers need, this also allow them to offer benefit of a close partnership with a reliable and professional oil.
6:1 OPPORTUNITIES WHICH SHELL OIL DERIVE FROM THIS STRTEGY.
Its help them to monitoring development and briefing colleague for strategy planning.
Its help shell oil in maximising scales revenue by driving product availability, promotional effectiveness, merchandising activity and pricing.
Developing value propositions for customer segment and building extent customer relationship.
It make them to monitor market development and briefing colleague for strategic planning cycles
Maximising sales revenue by driving product availability, promotional effectiveness.
7: PROBLEM OF THE STRATEGY
The strategy is more of capital intensive and require a huge number of employee in other to monitor the development of all the marketing process, monitoring the marketing development of their competitor is some how difficult to embark upon.
As a consultant i will advice shell oil company to continue the same strategy they are using at the moment because of the greater sales the strategic has brought the organisation, they can only try and improve their staff knowledge
by sending them for training and seminar in other to increase their level of understanding and to allow them to have a better understanding about the market, by doing this it will give them more edge over their competitors. and this will also increase their productivity, and will allow them to achieve he organisation goal, which is to produce oil and distribute oil to reach customers consumptions on time. Nagy and Lepley,(1997:4) and also to have a new ideal on new market situation in other to increase the overall objectives of organisation which is to manufacture and supply of oil product and services that satisfy the needs of their customer.
1: Al and Laura Ries, (2004) "The origin of Brand" Discover the law of product innovation and business survival", Harper Collins, New York.
2: Chris zook and James Allen, (2001) Profit from the core, Harvard Business School press, Cambridge, M.A.
3: Kotler, P.,(1997) Marketing Management: Analysis, planning, implementation and control, 9h edn, New jersey, Nj:prentic-hall
4: Mittal, B. and Lassar, W.(1996)"The role of personalization in service encounters" journal of retailing, 72(1):95-105
5: Michael E. Porter (1987) "Competitive Advantages to Corporate Strategy" Harvard Business review, may-June, pp 43-59.
6: Michel Robert (1993) "Strategy pure and simple" How winning C.E.O's outthink their competition, M.C Graw Hill, New York.
7: Philip Selznick (1957) "Leadership in Administration" Harper and Row, New York, pp 135-9.
8: R.H. Mac Arthur (1997) "Popular Ecology of some warblers f north eastern coniferous Forest" Ecology 39, pp 599-619.
9: Wong K. (1997)"The symbolic power of security" Marketing 102 (8 September).