Strategic Management of Cue Energy Resources Ltd - Case Study Example

Executive Summary Cue Energy Resources Ltd has been able to develop its business by ensuring quality and delivering on the promises. There have been various factors which has contributed towards the success of Cue Energy Resources Ltd and being able to utilize its internal factors towards the growth has been substantial. The report thereby presents the manner in which Cue Energy Resources Ltd has been able to identify its internal strengths and competencies. This has helped Cue Energy Resources Ltd to ensure that its current strategy has been crafted based on it. The company by being able to look into different areas of their core strengths has identified the strategy that will help to achieve its objectives. The report also presents the strategies that Cue Energy Resources Ltd is looking to work on and draws out an analysis of the manner in which the strategies will reap benefits for the organization. Being able to achieve and work on its current strategies will ensure that Cue Energy Resources Ltd is able to achieve its objectives and develop its business environment. Table of Contents Introduction 3 Background Information 3 Vision & Mission 4 Value Chain 4 Porter Five Force Model 4 Life Cycle Analysis 5 SWOT Analysis 6 Objectives 6 Stakeholders 7 Competitors Analysis 7 Financial Analysis 8 Conclusion 9 References 10 Introduction Cue Energy Resources Ltd which performs in oil and exploration business has grown its business by spreading to different part since its inception. This has helped the company to grow and use its resources effectively. This report looks to present the analysis of Cue Energy Resources Ltd where it looks to identify the business the company is in, the vision and mission statement, the target customers and other internal analysis. The report also presents information about the SWOT and looks to identify the external environment through Porter Five Force Model, Competitor Analysis, and Life Cycle. This thereby helps to understand the objectives and the manner in which Cue Energy Resources Ltd has been able to achieve it. Finally, the report looks and presents the competitor analysis and financial analysis highlighting the manner in which Cue Energy Resources Ltd was able to manage the resources and grow. This thereby provides useful insights and direction that Cue Energy Resources Ltd can look towards for growth in its business. Background Information Cue Energy Resources Ltd which stated business in 1981 as an oil and exploration company based in Australia has grown over the years. The company performs in Papua New Guinea, Indonesia, New Zealand, and Australia where it has relied on its core business competency i.e. producing oil and natural gas through exploration (Cue Energy Resources Ltd, 2011). Cue Energy Resources Ltd has relied upon a strategy where they look to work on their core competencies so that they are able to ensure growth in their business by looking to use their internal strengths so that they are able to perform better. Vision & Mission Cue Energy Resources Ltd has identified a vision and mission statement for the company and looks towards growing its business based on those. Cue Energy Resources Ltd has identified the vision statement to grow their business by increasing the oil and exploration business at other avenues where there is a possibility of having the required resources (Cue Energy Resources Ltd, 2011). On the backdrop of the vision statement Cue Energy Resources Ltd has identified the mission statement to be as improving their management process and ensuring maximum efficiency in exploring oil and natural gas so that the company is able to control cost and ensure efficiency in its operations (Cue Energy Resources Ltd, 2011). This has thereby permitted Cue Energy Resources Ltd to be able to develop its business accordingly. Value Chain Cue Energy Resources Ltd thereby is a producer which looks towards extracting oil and natural gas from the earth. The company specializes in the service of exploring oil and gas by finding the correct basins or reserves and explores the natural resources for the benefit of mankind. This value chain of Cue Energy Resources Ltd is thereby more concentrated towards producing the natural gases and oil through exploration. Porter Five Force Model The analysis of the Porter Five Force Model will help to understand the manner in which the external environment influences the working of Cue Energy Resources Ltd and the manner they are able to use it towards their growth. The external analysis is as follows Porter Five Force Model Rivalry among Sellers The rivalry is very high as all competitors offer similar products at similar prices. All company working in the oil and exploration business looks towards the same resources thereby intensifying the level of competition (SCRIBD, 2010). Potential of New Entrant The barriers to entry are high as the investment cost is very high. Still, the policies of the government to open up the economy for foreign players increases the likelihood of new entrant entering the industry Threat of Substitute The threat of substitute is low as people have to use the natural resources for their daily activities thereby increasing the reliance on the resources. Bargaining Power of Suppliers The suppliers have a high bargaining power because this forms a major part of the input cost and there is concentration of supplier. (SCRIBD, 2010) Bargaining Power of Customer The customers have a mixed bargaining power. Due to less differentiation and backward integration possible customers have to look towards tying up with a natural oil and gas exploration company so that they are able to receive regular supply of natural gas and oil. Life Cycle Analysis The life cycle analysis holds an important aspect for Cue Energy Resources Ltd as the company looks towards exploring resources from the earth which thereby has an effect on the environment and results in environmental degradation as the natural resources are slowly dwindling (Life Cycle, 2008). This makes it important that Cue Energy Resources Ltd understands the manner in which the environment has been impacted and need to make an impact analysis so that areas can be identified which when worked upon will help Cue Energy Resources Ltd to reduce the impact on the environment and derive new ways to improve the environmental conditions. SWOT Analysis The SWOT analysis will help to understand the internal analysis and will make the company identify ways to grow. The internal analysis is as Strengths Weakness Strong brand name due to the ability of the company to use the resources in the most effective way Concentration on oil and natural gas only thereby unable to diversify the business risk Increasing market share High employee turnover rate making it difficult to have consistency in operations Increasing market penetration   Continuous improvements in the facilities   Opportunities Threats Expand in new market Increasing cost of exploration Enter new markets where the opportunity of exploring natural resources is high Increasing governmental and environmental regulations Objectives Cue Energy Resources Ltd is pursuing the following strategies to ensure that the work is accomplished in the most productive way. This will thereby transform into better services for the customers and help to develop their strategy for future development. Cue Energy Resources Ltd looks towards developing its services by having better techniques for exploration so that they are able to ensure efficiency in their operations (Gamble & Stone, 2006) Improving the market by looking towards increasing their reach and having exploration business at different parts of the world so that they are able to cater to a large group of people Improving the in house facilities by having more employees that look towards providing quality services that will help to develop the business and ensure maximum customer satisfaction. Stakeholders Cue Energy Resources Ltd thereby has various stakeholders starting from the exploration of oil and natural gas to the final consumption. Cue Energy Resources Ltd has stakeholders like the employees, customers, suppliers, creditors, environmental, government, society and all other person associated with the company in some way or the other. This thereby makes it important that Cue Energy Resources Ltd looks towards satisfying all the stakeholders so that the people feel happy and pleased to be associated with the organization. This will help Cue Energy Resources Ltd to improve their brand image and will act as a guiding stone for their success. Competitors Analysis Cue Energy Resources Ltd faces stiff competition from various players that looks to provide similar services in the market. Cue Energy Resources Ltd faces competition from local, regional and foreign players as they look towards providing similar services in oil and exploring oil and natural gas (CUE, 2011). The degree of competition has intensified for Cue Energy Resources Ltd as all the players in the market look towards providing similar services as seen in the chart below Cue Energy Resources Ltd Tullow Oil Plc Cairn Energy Plc Premier Oil Plc Looks towards exploring oil and natural gas from the earth surface Looks towards exploring oil and natural gas from the earth surface Looks towards exploring oil and natural gas from the earth surface Looks towards exploring oil and natural gas from the earth surface Has operations over different regions of the world Has operations over different regions of the world Has operations over different regions of the world Has operations over different regions of the world Effective workforce resulting in efficiency in production of natural resources Effective workforce resulting in efficiency in production of natural resources Effective workforce resulting in efficiency in production of natural resources Effective workforce resulting in efficiency in production of natural resources The competitor analysis thereby highlights that all the different players in the market looks towards providing similar services with little differentiation between the services offered by all players. This has thereby made it difficult for Cue Energy Resources Ltd to ensure that they are able to sustain the competitive advantage they have as other players look to follow soon. Financial Analysis The financial analysis of Cue Energy Resources Ltd will help to understand the manner in which the company was able to use all the environmental factors towards their growth. This will also highlight the manner in which Cue Energy Resources Ltd was able to ensure that the global meltdown was dealt with and the efficiency of the company in managing the changing environment. Financial Category Analysis Revenues The company had revenue of $55,000 for the year ended 30th June 2011 which shows an increase of 45% over the previous year. This highlights growing business and the manner the company has been able to ensure efficiency in operations Expenses The airline had an expense of $25,000 for the year ended 30th June 2011 which shows a decrease of 29% over the previous year. This shows control in cost so that the bottom line grows Earnings The profits were $28,000 for the year ender 30th June 2011 highlighting a growth of 100% over the previous period. The analysis shows that the company has been able to cut cost and ensure increase in shareholders profit whereas in the previous year they incurred loss Assets The airline had an asset of $151,000 for the year ended 30th June 2011 which shows an increase of 45% over the previous year. This shows that the business has ensured that the growth in business matches with the growth in assets base Liabilities The airline had liabilities of $51,000 for the year ended 30th June 2011 which shows an increase of 7% over the previous year. This highlights that the liabilities has grown in comparison to the growth in assets and is an area to watch Conclusion This report thereby highlights the manner in which Cue Energy Resources Ltd was able to ensure that both the internal and external environment was used by the organization towards the growth of the business. Cue Energy Resources Ltd was also able to ensure that it ensures efficiency and despite the slow down was able to ensure growth thereby highlighting that the company was efficient in identifying the strategies and objectives and looking towards pursuing it. The company by following a similar strategy will be able to grow in the future and be able to get better returns for its investors. References Cue Energy Resources Ltd. 2011. Cue Energy Resources Ltd. Retrieved on December 10, 2011 from http://www.cuenrg.com/ CUE. 2011. Cue Energy Resources Ltd. Retrieved on December 10, 2011 from http://finance.yahoo.com/q/in?s=CUE.AX+Industry CUEL. 2011. Cue Energy Resources Ltd. Retrieved on December 10, 2011 from http://finance.yahoo.com/q/bs?s=CUE.AX+Balance+Sheet&annual Gamble, P. & Stone, M., 2006. Up close & personal?: customer relationship marketing @ work. London: Kogan Page Publishers. Life Cycle. 2008. Life Cycle Analysis. Retrieved on December 10, 2011 from http://www.enviroliteracy.org/subcategory.php/334.html SCRIBD. 2010. Executive Summary since 1994, Cue Energy has grown. The Times New York Company Read More