The Inception and Subsequent Growth of Shell Oil Company - Term Paper Example

SHELL OIL COMPANY TABLE OF CONTENT Executive summary…………………………………………………………………3 Introduction………………………………………………………………………….4 Body of content………………………………………………………………………5 1. Economic aspect………………………………………………. 6 2. Social aspect and factors…………………………………………8 3. Political, legal and regulatiory aspect……………………………..9 Conclusion……………………………………………………………………………10 References……………………………………………………………………………..11 Executive summary Shell Oil Company was formed by a young shopkeeper in 1833 and it has since continued to grow to its current huge and near monopoly status. It has expanded to close ninety countries with a work base of ninety three thousand people. It currently majors in selling gas to customers across the world. It sells leaded and refined oil to people or customers at fairly competitive prices. It has ventured into newer areas of business interest such as offering credit services to its customers. Given the basis for the past or previous years, it is highly prospective that Shell Oil Company will venture into clean energy because it has strived to offer cleaner oil and gas over the years. Introduction Shell Company which in the recent days has delved into selling gas was formed in the eighteenth century and has grown over the years in leaps and bounds. To begin with, Shell Company was started in 1833 by a young shopkeeper who was involved in the business of bric-a-bric. His shop was situated in the East parts of London, where antiques were also famous and common wares of trade. He then opted and decided to expand his merchandise so as to cover and introduce oriental shells. It is important to note and mention that oriental shells were priced commodities in that day and age. Thus, his small shop soon grew into a reputable import and export business. Thus, when industrial age which was driven by coal and revolution began, it was a blessing in time for the young business owner. Later on, as the company grew and expanded into oil business from the routine shell selling business (Senge, 2014). By the start of the twentieth century, Shell had grown to refine Shell chemicals. After the World Wars, the world was in dire need of energy sources and this presented Shell with a chance and opportunity to expand its business reach domestically and in the global markets. It also formed partnerships and acquired other businesses in the course of its expansion. A practical case and example is the partnership that it had with Ferrari, in the course of its expansion to foreign markets (Basiron, 2007, p. 289). Another landmark move towards the success and growth of Shell Company was the merger and acquisition or unification of the Royal Dutch and Shell Transport and formed the umbrella body Royal Dutch Shell. Currently, it has several subsidiaries in ninety countries with a work forces of close to one hundred thousand employees. Body of Content For the Shell Company to rise to its near monopoly status that it currently enjoys, it has ensured that it is perfect in the economic front by devising ways and avenues to ensure that it grows. Similarly, it has also covered areas of social cultural aspects and conditions to make sure that there is synergy and sharing of positive energy by the workers and the management. All businesses exist where political government s and legal conditions or regulations occur. Shell as a company has in its own capacity strived to meet those conditions such as the business regulations promptly and effectively (Yusoff, 2006, p. 88). This exposition and paper will articulate all the conditions and situation touching on the political, legal, social, cultural and economic fronts and aspects. Economic fronts and aspects To begin with, Shell Oil Company has ventured into the front of building and improving customer loyalty by introducing credit services. For instance, there is the Shell Saver Card which allows the loyal customers to earn credit points each time the shop with the company. In a way this is a way of increasing the sales of the business since the customers would strives to increase their points by shopping regularly and at the long end up increasing the sales and revenue of the Shell Company. Other avenues and means of customer satisfaction have also been introduced to meet this economic consideration. The customers of Shell Oil Company have in the recent past been transformed into partners of sorts. They input and opinion is highly regarded and valued. For instance, the company has ventured into after sales services such as wiping of windscreens and washing of cars for customers at a subsidized fee (Hirsch, Bezdek, & Wendling, 2005). It goes without saying that a customer would get his or her car washed, windscreen wiped among other services all under roof and a fair price! Thus, customer retention would be high and their loyalty unwavering as the company continues to increase their sales and revenue in the long end. Another economic factor that cannot escape attention in this respect and line of thought is the increased diversification and expansion into newer and more countries over the years. Most countries in the world today have a mark or a Shell company or have seen vehicles from the company. Once the company expands to newer countries, there is an economic attachment and bond that would be formed by those customers. This has been the marketing and expansion strategy of Shell Oil Company, to expand to areas and regions where business rivals have not ventured into yet. A practical case and instance is the fact that today, Shell Oil Company has subsidiaries in Sub-Saharan Africa despite the fact that its operational headquarters are in Britain. Most of the people in such places identify Shell Oil Company as the gas station of their choice. Even if other rivals may penetrate such a market, it would be unlikely that such a rival would depose Shell Oil Company from such a market. Shell Oil Company has also used its huge financial muscle and ability to enjoy enormous economies of scale. This is so particularly in areas and zones where other business rivals have taken root and established their businesses. Thus, as a way of appealing to the customers, Shell Oil Company has in some instances reduced their prices and sold slightly below market prices so as to attract customers. The huge financial resources and it has to sustain itself during that time of appealing to the customers. Social and Cultural Aspects Shell Oil Company has ventured into proper corporate social responsibilities and sharing with the surrounding communities where their businesses are stationed. It is a proper and conventional business practice that a company ought to be engaged and involved in social duties so as to show appreciation and give back to the communities and the society as a whole. Specifically, in the sub-Saharan parts of Africa where Shell Oil Company is the only gas shop they know, it has delved into community projects (Wheeler, Fabig & Boele, 2002). In some cases and instances, it has helped in drilling boreholes, paying college fees to bright but needy students. At the long end, it is automatic that the business bond that would be formed as a result of the actions of good will from Shell Oil Company would earn the trust and loyalty of the communities and society as a large. In some other instances and cases, Shell Oil Company has helped communities in needy areas to do social projects and programs which would benefit the whole human race. A specific case and instances is the sponsorship that Shell Oil Company has always given to sporting events. Whenever there is a sports tournament such as a football match or a marathon race, Shell Oil Company gives sponsorship. It goes both ways, because Shell Oil Company would use that opportunity to market itself while at the same time help the society to cure the ills and challenges that face it. Culturally, the Shell Oil Company has always strived to ensure that its employees are satisfied and work in an enabling environment which would make them help Shell Oil Company achieve its goals and objectives. It has been a cultural practice in Shell Oil Company to rewards best performing employees or staff. This is usually aimed at increasing internal competition which is healthy for any form of business to thrive and grow (Kolk & Levy, 2001). It is a practice where excellence is appreciated while at the same laxity is sanctioned accordingly. There are various awards such as bonuses which are given to best employees and department. For instance, if the sales department was the best performing department, then a bonus would be set and given to its members. This ensures that all departments and employees strive to work even harder so as to ensure that the business aim and objective is achieved accordingly. Similarly, there are mechanism put in place to ensure that the staff and employees of Shell Oil Company are given fair and competitive remuneration and wages. For instance, the pay of each person is entitled to automatic rise after serving the Shell Oil Company for a specified period of time depending on the level of rank that such a person is in (Bentley, 2002). It has been the culture of Shell Oil Company to ensure that their staff are satisfied and are comfortable so as to focus their positive energies to the productivity and goals of Shell Oil Company. Political, Legal and Business regulatory It is important to note and mention that all businesses in the world operate within a stipulated constitutional framework and atmosphere. There are laws in each country which govern the operations of a business. The case of Shell Oil Company becomes complex since it has subsidiaries in ninety countries which have different laws and policies on microeconomic issues such as taxation, number of employees amongst other. The irreducible minimum that has been embraced and taken by Shell Oil Company was to ensure that it complies with all the laws and policies or operational framework set by those specific countries. For instance, it is a common practice that each company nominates a member to the regulatory body or council to help it run the industry as a whole. Shell Oil Company has been nominate a member of the executive positions of same national descent and origin in that country (Campbell & Laherrère, 1998, p. 61). For instance, if the subsidiary is in Kenya, then an executive member from Kenya would be nominated to the regulatory board. This is so because the Kenyan may be aware about the operational dynamics and have the requisite institutional memory to serve the company accordingly. Conclusion The above essay and exposition has explained the inception and subsequent growth of Shell Oil Company to the current near monopoly status it has in the world. It has also articulated and explained the economic, social, cultural, legal, regulatory and political reasons that have propelled the company to its subsequent growth. The irreducible minimum has been acquisitions and expansion into other newer areas and countries (Wack, 2004). This is the reason as to why Shell Oil Company has continued to grow in stature ad might into the different countries of the world. It has also ensured that it continues with the good business practices and patterns such as having proper social corporate responsibility and supporting local communities where need be. Thus, in principle, this article has analyzed the advantages, merits and the supporting reasons which have propelled Shell Oil Company to greater heights since its inception. References Basiron, Y. (2007). Palm oil production through sustainable plantations. European Journal of Lipid Science and Technology, 109(4), 289-295. Bentley, R. W. (2002). Global oil & gas depletion: an overview. Energy policy, 30(3), 189-205. Campbell, C. J., & Laherrère, J. H. (1998). The end of cheap oil. Scientific American, 278(3), 60-5. Hirsch, R. L., Bezdek, R., & Wendling, R. (2005, May). Peaking of world oil production. In Proceedings of the IV International Workshop on Oil and Gas Depletion (pp. 19-20). Kolk, A., & Levy, D. (2001). Winds of Change:: Corporate Strategy, Climate change and Oil Multinationals. 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