Strategic Report On Shell Commerce Essay

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Shell are a Global group of energy and petrochemical companies with around 102,2000 employees in more than 100 countries and territories.Our innovative approach ensures we are ready to help tackle the challenges of the energy future.

Shell aim is to meet the energy needs of society, In ways that are economically , socially and environmentally viable, now and in the future.

The objective of shell are to engage efficiently responsibly and profitably in oil ,gas, chemicals and other selected business and to participate in the search for and development of other sources of energy to meet evolving customers needs and the worlds growing demand and energy. Our role is to ensure that we extract and deliver them profitably and in environmentally and socially responsible ways.

Our aim is to work with our customers, partners and policy makers to adavance efficient and sustainable use of energy and natural resources.

Goal of Shell:

THE GOAL of the company is to position itself as the preferred oil company in world wide,leading the field in its safety, customer service,qulity and environmental protection.



"Strategy is the direction and scope of an organisation over the long-term: which achieves advantage for the organisation through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfil stakeholder expectations".Johnson and Scholes

Shell strategy:

Our strategy is "More Upstream, Profitable Downstream." We are focusing on delivery and growth, leveraging our strong portfolio

Shell major products:

Shell's major projects show our technology and expertise in action.

Athabasca Oil Sands Project (AOSP)

Sakhalin II

Shell eastern petrochemiclas complex (SEPC)

Port arthur refinery

Pearl GTL

Qatargas 4


Parque Das conchas(BC-10)


Shell Products:

Shell has two product lines, Fuel and Lubricants.


Shell offers a wides range of fuel, these are:


Super Unleaded


Hi-speed diesel



The Lubricants offered by shell are;

Rimula C

Rimula D

Rimula X

Helix Plus

Helix Super

Helix Standard

Shell Helix (CNG)

1. Strategic information needs of the Shell for competitive advantage:

Porter's Five Forces and Intensity of Competitive Forces

Threats of new entrants

Rivalry among existing


Bargaining power of suppliers

Bargaining power of Buyers

Threats of Substitute products or services

Threats of new entrant:

Shell is a big company it is very difficult for a new company to threat shell. current competitor in the markets are having a hard time to finding oil reserves. posters 5 forces model help new company to enter in a market or making any decision.

Powers of suppliers:

A producing company requires a raw material, labor , components, and other supplies. there are no direct suppliers for the oil company and in the case of shell.

There are plenty of oil company in the world much of the oil business nad gas business is dominated by a powerful companies.

Powers of buyers:

Buyers have no power over the oil company oil is always in demand.

Threats of substitute:

IN Portes models substitute product refer to product in others industries. A threat of substitute exits when the product demand is affected by the price change of substitute product. Its is very difficult for a new company to threat a big oil company. There is no substitute gor the petrol. As there is a new invention like electric car, CNG but there demand is not high because its not that powerful as compare to oil car.

Competitive Rivalry:

Competitive rivalry in the oil company is very high.There are some big company like BP, tesco, total, esso,. BP has learned to be responsive to change and indeed to be at the forefront of the changes process. It is not commonly known that oil is refined at shared premises, so in reality all petrol is the same, regardless of the company label given to it and as such competitive rivalry is high

The SWOT Analysis of Shell:

SWOT stands for Strenghts, Weakness, opportunities and threats. Strenghts and weakness are related are internal environment of the organization and opportunities and threats are related with external environment of the organization.


Shell's current investments in exploration will help ensure continued activity over coming decades.

Research into biofuels, solar power, wind power and energy from hydrogen helps the organisation diversify in a market where ecological issues are of increasing concern, and also addresses issues of the longevity of fossil fuel reserves.

Diversification into products such as fuel cards and credit cards helps Shell maintain a wider portfolio of products, spreading risk.

Shell pioneered the use of scenarios, a planning tool where a range of possible future situations are explored and strategy adapted to ensure future demands can be met.

The organisation has worked hard to improve its general reputation and believes it is now seen more positively than it used to be.

Shell has utilised opportunities to develop strategic partnerships, for example, supplying CO2, which is a by-product of its refinery process, to Dutch tomato farmers who had previously used heaters (higher CO2 concentration in greenhouses accelerates tomato growth).


Shell's strong focus on oil and gas requires it to search continually for replacement supplies, and exploration is a high-cost element of its operations.

Shell still uses the technique of flaring and burning gas from oil extracting sites as a way of dealing with unwanted by-products of its operations: this is considered to be environmentally unacceptable by many.

Shell has a strong presence in Nigeria, but this area is politically volatile and operations have been fraught with security problems for staff and attacks on production. The company may be forced to withdraw, compromising its network of resources and threatening its ability to meet production obligations.

The company is reported to be reviewing involvement with a windpower development near Blackpool, raising questions regarding its commitment to alternative energy sources.


New oil and gas reserves are still being found, and there is the potential to discover more.

Shell has been able to move into areas rich in reserves which were previously too risky to operate in, for example Iraq.

Shell's active response to criticisms of environmentally unfriendly activities may lead to less antagonistic relationships with environmental groups.

Emerging economies have a large and growing demand for fossil fuels.

Diversification into new products and alternative fuels may open up new markets.


Fuel prices in recent months have been particularly volatile, initially rising quickly but subsequently falling sharply, reducing potential profit

Political issues in some regions, Nigeria in particular, threaten operations. A court order has demanded Shell hand over a site on the Niger Delta to local ownership.

Summer 2008 saw strikes by tanker drivers working for Hoyer, suppliers of Shell, resulting in negative publicity, criticism of Shell's high profits and a supply problem for Shell forecourts.

The economic downturn has led to a decrease in demand for fossil fuels, possibly aggravated by changes in driving habits in response to high fuel prices earlier in 2008.

Weather can have significant effects on production, with refineries particularly hit recently by Hurricane Ike.

Pest Analysis of Shell

PEST satnd for Political, economical,social and technological.


Government policy


Government leadership

Government structure

Poltcal trends

Wars and conflicts

Government taxation is a concern for the oil industry because it is already heavily taxed and more taxes could start a process whereby people would start moving away from petrol to find cheaper more sustainable products.

Shell have interests in countries where there is no political stability or where there are chances of dangerous wars breaking out. Such as Iraq and Nigeria this is very damaging especially when a company like Shell has invested millions of Pounds on exploration and drilling


Economy trends


Market nad trade cycles

International tarde

Job growth


Interest rate

Internal cash flow

The cost of petrol continues to increase causing consumers to wrongly blame the oil companies. The price of oil is managed by OPEC, an international price fixing body.

The OPEC MCs coordinate their oil production policies in order to help stabilise the oil market and to help oil producers achieve a reasonable rate of return on their investments. This policy is also designed to ensure that oil consumers continue to receive stable supplies of oil.


Consumers are more ethically inclined and the ethical marketplace, in Britain alone, is currently worth 14 billion pounds. While petrol may not be seen as an ethical purchase, petrol companies can, as well as advertising their product, inform the consumer of the Company's commitment to the environment. That is advertising the fact that they deal in sustainable energy products. The new social performance requirements at BP will help to promote better management of the impacts on communities around the world. By assessing the socio-economic impacts of the projects, including human rights and conflict issues, at an earlier stage in the project lifecycle BP hope to offer greater direct benefit to local communities affected by their operations. The requirements also aim to help BP build local relationships based on mutual advantage and enhance the reputation as a responsible operator.

. Unlike BP, Shell has failed to convince the consumer of its responsibility to the environment.


The oil industry is becoming aware of the need to produce efficient and environmentally conscious fuels. We can't use fossil fuels forever as they are a non-renewable and finite resource. Research suggests that we should start using hydrogen. Hydrogen is a colourless, odourless gas that accounts for 75 percent of the entire universe's mass. Hydrogen is found on Earth only in combination with other elements such as oxygen, carbon and nitrogen. To use hydrogen, it must be separated from these other elements



e-Business is the term used to describe the information systems and applications that support and drive business processes, most often using web technologies.

e-Business allows companies to link their internal and external processes more efficiently and effectively, and work more closely with suppliers and partners to better satisfy the needs and expectations of their customers, leading to improvements in overall business performance.

While a website is one of the most common implementations, e-Business is much more than just a web presence and there are a vast array of internet technologies all designed to help businesses work smarter not harder. Think about collaboration tools, mobile and wireless technology, Customer Relationship Management and social media to name a few.

Shell e business:

Telephone queueing? Not with Shell eServe, our web-based tool for online transactions. It is free, simple to use and secure, available for you 24/7 to place orders, review them before submitting, check order status or view account information in real time.

If you are a large corporation, we can offer you Shell eRouter, our concept of Electronic Data Interchange (EDI) for increased efficiency and accuracy of transactions. By connecting with our system to process orders and invoices, you can save time and reduce procurement costs.

For our premium bulk fuel customers we have developed Vendor Managed Inventory (VMI), our solution for fuel stock management that can lower you procurement costs and ease your forecasting and ordering processes. We monitor the inventory levels of your storage tanks and make sure they stock the quantity you require.

Need to make a fuel order quickly? Self-Service Interactive Voice Response (IVR) is our free service for fuel ordering, delivery checks or account inquiries. You just need a telephone to call us anytime you need.