Royal Dutch Shell Companys Mission and Vision Statements - Case Study Example

Capstone Project Royal Dutch Shell Company’s Mission and Vision ments According to research, Shell brand is one of the most familiar commercial symbols worldwide (DePamphilis, 2010). Royal Dutch shell is the world`s largest private sector oil company by revenue, Europe`s largest energy group and a major player in the petrochemical industry. Shell has differentiated itself through its dedication to industry improvement. Accordingly, its marketing expertise has enabled the company to recompense for its comparatively low capacity of crude oil manufacture, as associated to its resilient competitors, by selling a comparable amount of gasoline countrywide. Despite the fact that the company carries its business mainly in the United States, it also explores for and manufactures crude oil and natural gas outside the nation, both self-sufficiently and through combined undertakings with other businesses of its parent organization, Royal Dutch shell group. The mission statement of the Shell company is to meet the energy requirements of the world, in manners that are economically, communally, and ecologically sustainable, currently and in the future. The company lives out its mission by ensuring that it produces and deliver oil products and services that gratify the requirements of their consumers. It also ensures that it accomplishes a functional excellence and carrying out its business in a safe, biologically sustainable and economically finest way. It also recruits a diverse, innovative, as well as outcome-oriented team inspired to offer quality. Perceptibly, the company`s main aim is achieving its profit need, therefore, Shell desires to achieve the energy requirements of the public with high financial performance. On the other hand, the company`s vision statement is to strengthen their position as a leader in the oil and gas industry so as to offer a competitive shareholder profit at the same time assisting to achieve international energy demand in a liable manner. The company lives out its vision by ensuring that they concentrate on exploring new oil and gas reserves by creating main projects where their technology and expertise adds value to the reserve owners. Accordingly, in downstream, they highlight more on persistent money generation from available possessions and selective investments in growth markets. Therefore, the company lives out its vision by leading the oil and gas industry and establishing itself according to the change in demand of their consumers in a profitable manner, but ensuring that they put into consideration issues concerning environment to avoid causing any harm to social values. How the Organization `Strategic Goals Link to the Company’s Mission and Vision The strategic goal of the company, which is to produce profitable growth links with the company`s mission and vision by focusing mostly on pushing forward with its investment programme, to deliver sustainable growth and offer competitive incomes to shareholder, while assisting to achieve the international energy demand in a responsible manner (Jonker, 2007). It also relates its strategic goal with its vision and mission by assisting to accomplish the needs of energy in economically, ecologically, and social manner in the whole world. In addition, its dedication to technology and creativity for the future continues to be at the Centre of their strategy. The company believes that its technologies and technical expertise will be demonstrating aspects in the growth of its business. The Company’s Financial Performance From research, the cost of oil and gas is determined in the international market. Crude oil is quality graded by its certain gravity, as well as its sulfur component. In most cases, a dissimilarity in value of crude oil leads to increase in diverse prices for crude oil. It is noted that the price of oil reduced in the past three years and has remained generally lower throughput, reflecting both customer`s reaction to the high prices and the recession that started in December 2007. Financially, Shell Company has been increasing its revenues by almost twenty five percent. This is because the costs of oil had increased by over thirty percent. Despite the fact that the company has displayed noticeable transformations, the interest of the business and practices of the company with respect to production are stable. The explanation for this stability may be because the company could be creating exploration and invention decisions founded on an interior preparation price, which might be diverse and extra steady than the market price. The company has seemingly not acted in concurrence with market economic theory with respect to production adjustments in association to altering prices. This is because this theory relies upon the reaction of organizations to price indicators to enlarge production in periods of greater or increasing prices, and to give reductions in production during lower or declining costs. In this manner, cost volatility in the marketplace is declined at the same time marinating supply matched to consumer demand (Zanden, 2007). Accordingly, there has been an increase in the last many years in natural gas reserves, production and consumption because of advancing technologies and economics on non-conventional natural gas. A Competitive and Marketing Analysis of the Organization to Determine Strengths and Opportunities The Royal Dutch Shell Company has a significant number of strengths. To begin with, Royal Dutch Shell is a prominent company internationally in the Oil and Gas industry with international existence in numerous countries. Subsequently, the company derives its strength in this global image in the industry. The Shell Company has also verified growing financial enactment since the 2010/2012 economic depression. It therefore has a durable investment base for competing in the competitive industry. In addition, the company has recognized significant brands recognized internationally like Shell V-Power and the Shell Fuel Save. The company has powerful exploration and industrial competence as an internal strength linked with a differentiated assortment of goods in the upstream and downstream sections of the company. The size and scale of the international practices of the company may be a weakness because of the complications of the company to control superiority and standards of its products since the functional conditions of different refinery sites differ. This also influences undesirably on the organizational competence and achievement of the management of the company. Acquaintance to different governing systems through the international presence of the company presents complications in articulating undeviating policies appropriate to the universal functions of the company. In addition, there is cumulative responsiveness and concern for ecological stability where condensed carbon emission is a compulsory contemplation for most oil-related products. Subsequently, there is increasing demand for liquid natural gas as a source of clean energy. This is likely to increase the company’s returns from liquefied natural gas. There are also opportunities for the company to enlarge to the emerging economies like China through joint undertakings, mergers and acquisitions like acquisition of Neste Oil in Poland. The economic go-slow in the United State and European Union because of the debt calamities involving member countries displays a threat to the company’s cost-effectiveness. Terrorism activities threaten the company’s international operations by increasing associated business operational expenditures. Increasing strict environmental regulations is also a threat to the current and future operations of the company, which will need more well organized, and environment responsive, exploration and industrial technologies. Changing interest rates and the war in the Middle East countries is also a threat to the company because of its international functioning. Five forces that that have been identified can be employed to scrutinize the competitiveness of a Shell company`s operation. The forces comprise of the threat of new entrants, threat of substitutes, negotiating power of suppliers and buyers and competition among existing opponents. Royal Dutch Shell Company has developed great scale practices in more than 70 nations appreciating economies of scale, international appearance with established strong brands that makes it hard for new entrants. Thus, the threat of new entrants is low due to the high profit need to develop operations. In addition, pressures of substitutes are great for the company. This is because oil-related products, chemicals and natural gas manufactured by diverse corporations are interchangeable. Main rival products can be employed as substitutes for the company’s products. Therefore, the dangers of substitutes for the company are extraordinary. Royal Dutch Shell has embraced a vertical amalgamation development approach, which comprises of acquiring, and merging with companies at different levels of operation. Thus, because of this, it has noteworthy effect on its supply chain. Additionally, the company has heightened its technological volume through the projects and technology section of its business. Therefore, the negotiating power of suppliers is little. From research, Oil and gas are indispensable goods in any economy. Economic manufacture procedures in an economy make use of oil. This elucidates the reasons as to why in some emerging nations oil quantity is under state agencies. Additionally, the oil industry is categorized by companies coming together to create associations that would empower them device the market. Moreover, most of the consumers of oil products purchase in bulk and therefore loss of one buyer would meaningfully upset the company’s income. Subsequently, the bargaining power of buyers is average. The major rivals of the company include Exxon Mobil Corporation, Total S.A. and BP Company, which have also developed international existence in the oil and gas industry. Competition with these companies is high because of the high branding and differentiation approaches smeared by the companies in their processes internationally. The companies have created brands renowned globally and major customers, which makes competition in the industry great. Appropriate Strategy (Low Cost, Differentiation, Or Niche) That Will Maximize the Organization’s Profit to Investors Organizations have the tendency of using various strategies to maximize profit or minimize losses based on their organization strength, and thus Shell Company is not an exception. Regardless of what products an organization owns and how much money it holds, loss over extended time will eventually weaken an organization`s asset positions and reduce the amount of its money affluences. Therefore, the appropriate strategy that the Shell Company will employ to maximize its profit to investors includes the product differentiation. Organizations that can differentiate themselves by offering top quality goods or services frequently are in a position to expertise-developed prices in the market. Despite the fact that price alone do not guarantee profit, it does provide organizations the chance to maximize profit. In most cases, the higher the price that organizations charge for their goods and services` superior quality, the more profit organizations can anticipate. The Shell company is suitable to employ this strategy because it produces quality p[products and services, and it also has a target market that consumers are less price sensitive, but more quality conscious than consumers of other markets. Scenario in Which A Merger or Acquisition Would Be A Viable Strategy to Implement According to research, acquisitions have increasingly become the most dramatic manifestation of vision and strategy in the business world. With one solitary shift, organizations can transform the course of their future and create value for their whole and sole shareholders. There are various forms of merger and acquisition. For instance, in merger the assets of two different organizations are connected to develop a new lawful entity. If it is about control or acquisition, the control of assets is taken over from one company to another. Another may define acquisitions as a procedure of purchasing one company. The scenario where acquisition or mergers may be implemented includes situations where companies cooperate and negotiate terms and conditions concerning the whole process of acquisition (Urabe, 2003). Another scenario may include a situation where the target organization is not ready to be purchased and is not aware of the offer. The main intention of acquisitions or the market conditions that makes it a good select is that it increases shareholder value, economies of scale, increases market share as well as tax reduction. The type of strategy that would make this a success includes the strategy of the parent organization. The appropriate rewards that would best motivate employees toward achieving the desired strategy It is noted that organizations attain desired results through reimbursement and rewarding attitude that acknowledges workers for the accurate performance. Gratifying change determinations illustrates the significance of and desire for change along with leaders` comprehension that the things that are rewarded are completed. Nevertheless, unsatisfactory results are the outcomes of rewarding workers for performing what the organization does not desire them to do, or failing to reward the right conducts. An operative reimbursement and reward attitude puts into consideration the self-motivated nature of the change inventiveness of an organization, while permitting the organization to develop and traverse its critical course. Research concerning reimbursement points out that, an integrated reward attitude sustains every step of change creativity in an organization. Therefore, despite the financial crisis the organization may be experiencing, it is vital that the executive leader finds ways that he can recompense and reward workers if the organization has to move to higher level in terms of performance (Letto, 2006). Reward and compensation will help raise the morale of the workers, which has been said to be low. Therefore, the appropriate rewards that would best motivate employees toward achieving the desired strategy depends on the company. Some companies reward their employees by offering them cash; others may be rewarded through promotions, training or being offered a scholarship to further their skills among others. It is quite vital to reward workers at all level because this produces good results for the company. How The Company’s Current Strategy Supports or Discourages Ethical Business Behaviors In most cases, all organizations are required to work under or follow some ethical business practices in their provision of goods and services. Therefore, in case any organization is recognized not to follow or adhere to the ethical regulations, a complaint may be filed against that organization or individual. Shell Company has been noted to discourage ethical business issues, thus not following good ethical guidelines as demonstrated in the national ethics guideline. For instance, research shows that Shell workers have accused Shell of being a racists company, where it accepted the past discrimination against Jewish workers, which cost at least twenty of them their lives (Henry, 2008). This is being unethical in any business. In addition, it is noted that the company sustained racist regimes and apartheid South Africa. In conclusion, Royal Dutch Shell Company has recognized durable brands recognized internationally improving its image in the international market. Regardless of the difficulties and dangers that are related with the worldwide processes of the company, there are prospects for the company to expand and develop its actions in the emerging markets. The company can use a differentiation strategy to position its products universally as greater using its brand names. To deal with the dangers of globalized activities, it is worthwhile that the company use strategic corporations with the local operators in the new markets to improve its perception in the markets. Additionally, the company can institute its economic benefit increasing its control over the supply chain through more vertical incorporation mergers and acquisitions. Lastly, to increase efficiency of the company’s activities, there is need for re-engineering of the creation process and approval of new effectiveness technologies. Therefore, the paper has provided detailed information in regard to analyzing the operations of Royal Dutch Shell Company. References DePamphilis, D. (2010). Mergers and Acquisitions Basics: All You Need To Know. New York, NY: Academic Press. Henry, A. (2008). Understanding Strategic Management. Oxford: Oxford University Press. Jonker, L. (2007). A History of Royal Dutch Shell: Appendices, Figures and explanations, collective bibliography and index. Oxford: Oxford University Press. Letto, G. (2006). Global Business Strategy. Boston, CA: Cengage Learning EMEA. Urabe, K. (2003). Innovation and Management. Michigan, MA: Walter de Gruyter. Zanden, V. (2007). A History of Royal Dutch Shell. Chicago: University of Chicago. Read More