Royal Dutch Shell and Sunoco - Case Study Example

Royal Dutch Shell and Sunoco Royal Dutch Shell and Sunoco Industrial revolution increased the significance of petrol and other transportation fuels. This subsequently gave rise to the establishment of internationally renowned corporations such as Royal Dutch Shell and Sunoco. These corporations within very little time span extended their services on the global level while serving the fuel needs of majority population. This paper aims to discuss the differences and similarities between Royal Dutch Shell and Sunoco. Although both companies deal with the transportation fuel but they have certain business operations which differentiate them from one another. For instance, Shell has remarkable performance in the area of corporate social responsibility whereas Sunoco does not perform very well in this regard (Society, 2014). On the other hand Sunoco is more environment friendly as compared to Shell which significantly strengthens its corporate image (Health, Environment & Safety, 2014). Introduction Royal Dutch Shell is a public limited company which is more commonly recognized as Shell. It is an Anglo-Dutch Multinational Gas and Oil corporation headquartered in Netherlands. The company has corporate offices mainly in United Kingdom which were established with the merger of UK Shell Transport and Trading and Royal Dutch Petroleum. Shell is categorized among the most valuable organizations in the world. The company has a significant position in the Fortune Global 500 list of 2013. Moreover, the company contributed 84% to the GDP of Netherlands in 2013. In addition to this Shell acquired the largest shareholder percentage i.e. 9.85% as per the Capital Research Global Investor’s data. It operates in more than 90 countries of the world while producing approximately 3.1 million oil barrels every day. This has facilitated the organization is maintaining around 44,000 service stations globally. This substantiates company’s strong global position (About Shell, 2014). Shell has a vertically integrated business model which primarily includes exploration and refining of oil and gas. Moreover, the company also performs major functions of marketing and distribution which makes it less independent upon different distribution channels and marketing agencies. Inclusion of petrochemicals, trading and power generation has further increased the business revenue of Shell. Company’s diverse functions also include the production of renewable energy resources, for instance, biofuels (About Shell, 2014). In contrast to this Sunoco Incorporation is Petroleum Company based in America while having regional headquarters in different places including Pennsylvania and Philadelphia. It was previously recognized as the Sun Company Incorporation and Sun Oil Corporation. However, after 1976 the company name was changed to Sunoco. It has also acquired the status of United States largest gasoline company with few other oil and gas producers having the same recognition. The company has 4,700 gas stations in 26 states of America only. Sunoco falls under the Fortune 100 Companies and it also enjoyed the rank of third largest company in Pennsylvania as per the revenue generation (About Sunoco, 2014). Comparison Both Royal Dutch Shell and the Sunoco have the same business objective i.e. to serve the transportation fuel needs of customers residing in different parts of the world. Shell particularly associates itself with the efficient, responsible and high profitability oil production while on the other hand Sunoco has greater emphasis over value and quality of oil provided to the customers. The world’s transport fuel demand is increasing with an immense rate. Therefore shell remains in constant search for participating into oil, chemical and gas businesses (About Shell, 2014). This subsequently helps it in meeting the increasing customer requirements. Moreover, the company tries to develop renewable energy resources. In comparison to this Sunoco has greater emphasis over how to achieve the company’s goals and objectives while implementing the most appropriate business strategies. In order to improve the products’ quality and value Sunoco undergoes a continuous innovation process which enables the company to satisfy its customers to a greater extent (About Sunoco, 2014). Shell believes that the gas and oil are the integral elements of the world’s energy needs. Transport fuel plays a major role in the overall economic development and its significance is expected to rise in the upcoming decades. Hence it is the responsibility of oil producing companies to ensure that they extort and distribute oil to their customers while also maintaining good profit margins. Since transportation and the use of fuel are also causing different environmental hazards therefore Shell tries to perform its business operations in a much respectable and socially responsible ways. For instance, the company has comparatively high performance standards which support it in long term growth and sustainability. This is highly crucial for Shell to operate in the oil industry. Shell has comparatively more emphasis over the mainstream transport fuel consumers including households and companies. Hence their customers, policy makers and partners seek to have sustainable and more efficient energy resources. Moreover, on the basis of growing population Shell has also started exploring the natural resources in order to locate greater oil reserves (About Shell, 2014). Shell also enjoys the status of being among the first international companies which have published their beliefs and shares in the General Business Principles in 1976. It is astonishing to notify that the company is still following the same principles while also including some business strategies based on short term and long term interests of the company. This has subsequently enabled the organization to integrate different environmental, economic and social concerns while making business decisions. When it comes to joint ventures the company uses its corporate values in order to convince the partners to accept and apply the principles which are consistent with Shell’s General Business Policy. Moreover, the company expects its contractors to abide by all the business principles of the Royal Dutch Shell (About Shell, 2014). On the other hand Sunoco is largely associated with the production of oil for racing cars. Over the period of time the company has achieved significant racing excellence. This was primarily started when Sunoco made alliance with Mark Donohue of Roger Penske Racing Team. The alliance made Sunoco a successful industry powerhouse. Now Sunoco has significantly increased its racing services to large number of consumers. The company has expanded its reach while catering to the needs of racers all over the world. These typically include all types of motor sports either professional or individual in addition to all other racing activities which require premium fuel support (Sunoco Race Fuels, 2014). As discussed above Sunoco emphasizes more upon the innovative business ideas therefore over the years it has gained significant knowledge and expertise about the complex engines of racing vehicles. For instance, the racing care engines are built differently as compared to the regular car engines. Therefore there fuel needs are also distinctive from other cars. Furthermore, the racing tracks, racers themselves and the sanctioning bodies play an important role in selecting Sunoco as the racing fuel. Although the company’s specialized services to the racing industry has provided it substantial position among all other oil producers but on the other hand it has also increased the business challenges for Sunoco. For instance, in the contemporary world the strength of racing fuel is influenced by the efficiency of racing cars, driver and the overall circuit which combines all three of them together. Hence Sunoco requires producing high performance fuels which are less affected by the distance and car built (Sunoco Race Fuels, 2014). Sunoco has acquired the status of largest racing fuel manufacturer and gasoline refiner. Moreover, the company has facilitated racers in winning the races in last 40 years. This subsequently helped Sunoco in increasing its product line which now offers a great variety of fuel options to the racers as compared to the past. Sunoco also emphasizes that racing car engines are designed to give the quality performance which get further enhanced by the use of Sunoco Racing Fuel. This can be substantiated on the basis that Sunoco has gained expertise in refining the racing oil while also maintaining a winning track record (Sunoco Race Fuels, 2014). As part of its company policy Sunoco first blends all of its racing fuels in their respective factories. These are then critically analyzed for better performance. Several tests are conducted in this regard while on the other side every batch is strictly scrutinized under the laboratory conditions. This subsequently helps in delivering high quality, reliable racing fuel all the time (Sunoco Race Fuels, 2014). Sunoco has different business areas and one of them is Sunoco Logistics Partners which is based upon a limited partnership. This is primarily responsible to operate in logistic industry while maintaining a diverse portfolio spread throughout different geographies. The portfolio includes refined product pipelines, crude oil, activities concerning marketing and acquisition assets and terminalling (About Sunoco, 2014). Oil producing companies such as Royal Dutch Shell and Sunoco are required to make exceptional environmental considerations. This is because of the fact that today energy has become a vital need to conduct all the day to day activities whereas it also helps us in continuous improvement and global development. Moreover, the access to clean water, healthcare facilities and hygienic food is the fundamental human right which can be greatly damaged by inaccurate use of oil producing systems and the refining procedures. The energy needs are expected to rise significantly and therefore Shell considers itself responsible to make business decisions which are consistent with the environment protection policies. This encourages Shell to conduct safe, profitable, responsible and efficient business functions around the globe. The company also works in accordance to the community benefits while shaping sustainable future energy resources. This is done through investing in different technologies, for instance, low carbon (Environment & Society, 2014). When it comes to the environmental protection Sunoco gives comparatively better performance which makes it the most environment friendly organization. It falls under the category of companies which have signed the Coalition for Environmentally Responsible Economies (CERES). Sunoco’s activities in regard to environment protection either successful or failed are all available on public forms. For instance, the company produces approximately 1.7 million pounds of poisonous chemicals on yearly basis. These primarily include aniline, naphthalene, benzene and nickel (Health, Environment & Safety, 2014). On the basis of corporate social responsibility both the companies differ greatly. Royal Dutch Shell has a comparatively greatly emphasis on energy supply, economic development and societal benefits. This is done through encouraging community programs, jobs and skills development. As a whole Shell has a very comprehensive plan for corporate social responsibility which is briefly discussed below (Society, 2014): Neighbors: Shell works in cooperation with everyone who is close to their business activities. These include people who have share in their business or they are affected by their business activities. Social Investment: Shell has invested in significant community development projects which fulfill the local community needs. Potential Growth: Shell has implemented various projects for the potential growth of disadvantaged nations of the world. For instance, Shell helps the Nigerian people to meet different life challenges. Healthcare: Shell is extending great support to the individuals who are suffering from HIV Aids. Human Rights: Shell aims to do business while supporting the fundamental human rights. As compared to this Sunoco has a very limited corporate social responsibility plan which includes following functions (Social Responsibility, 2014): Sunoco help people in developing different workforce skills through encouraging education. This is regarded as the fueling minds approach. The company performs its responsibility to make the world a better place to work and live which is recognized as fueling communities. Moreover, the company has emphasis over the environmental protection in order to fuel the planet. Conclusion Royal Dutch Shell and Sunoco are the renowned and highly successful multinational organizations. Both are associated with transport fuel industry. However, Sunoco better serves the requirement of racing cars whereas Shell is more suitable for households and companies. Shell and Sunoco have similar business activities with very few differentiations, for instance, both are involved in oil production, refinery, marketing, distribution etc. It also invests significant revenues in the production of renewable energy resources while on the other hand Sunoco emphasizes more upon the quality of services. Although Shell designs its business activities as per the concerns of environmental protection but Sunoco is recognized as the most environment friendly gasoline. Moreover, Shell has better performance in regard to corporate social responsibility whereas Sunoco only considers the minor social issues and community problems. References About Shell. (2014). Retrieved April 27, 2014, from Shell Global. About Sunoco. (2014). Retrieved April 27, 2014, from Sunoco. Environment & Society. (2014). Retrieved April 27, 2014, from Shell Global. Health, Environment & Safety. (2014). Retrieved April 27, 2014, from Sunoco. Social Responsibility. (2014). Retrieved April 27, 2014, from Sunoco. Society. (2014). Retrieved April 27, 2014, from Shell Global. Sunoco Race Fuels. (2014). Retrieved April 27, 2014, from Hyperfuels. Read More