Product Management Using Boston Matrix Tool with Product Life Cycle Management - Coursework Example

Product Management Using Boston Matrix Tool with Product Life Cycle Management. Spillage and theft of oil and natural gas is a major global problem. Many companies have heavily invested in this sector and have allocated more resources into research on the expansion of their markets as well as alternative and cheaper methods of reducing losses while at the same time maximizing on the profits. The use of information technology (IT) has been used a way of exploring further opportunities within this sector. This paper focuses on the management of oil companies through the use of Boston matrix and project life cycle management. Literature review The global economy is heavily dependent on oil production and this source of energy controls over 90% of the world economy and about 25% of the Gross domestic product of the oil producing countries [1]. Oil and gas are produced both onshore and offshore and it is transported through pipelines to the refineries and various depots. The global oil reserve is estimated at about 3520 billion barrels and an average daily production of 2500-3000 billion barrels. Over the past years, the global production of oil and natural gas has increased substantially [2]. This has resulted into increased processing and transportation of oil between points. There has been a great increase in the oil spills and theft of oil resulting into environmental pollution and degradation [3]. Oil spills normally result from a number of factors including: defective materials, corrosion of pipes, ground erosion, tectonic movement on the offshore wells and vandalism of the oil and gas facilities [1]. Oil spills normally result into adversely fatal impacts such as environmental degradation, fires and massive loss of property. Taking a more specific focus on Nigeria, the country heavily depends on oil production to support its economy and it’s GDP. Various multinational companies in the country have invested in oil and gas production and even though this sector is doing fairly well, oil spills and theft remain a big problem in the country [2]. Most of the oil spillage in Nigeria is associated with equipment failure and corrosion of pipes as a result of ageing. Vandalism contributes about 69% of the total spillage while 20% is contributed by controlled incidents [1]. The table below shows the recorded spillage for a period of 10 years. Table 1: oil spillage in Nigeria Year No. of spills Volume in barrels 1995 235 31000 1996 326 39000 1997 240 80000 1998 248 50000 1999 320 20000 2000 330 30100 2001 302 76960 2002 262 19980 2003 221 9916 2004 236 8317 2005 224 11921 Total 2944 377194 In order to maximize on the profits, the companies use various tools for product management such as Boston Matrix Tool and product lifecycle management [4]. Use of information technology comes in handy in the long term planning, management and marketing of the products. Through these methods, the companies are able to make long term plans so remain stable in the market. Methodology To analyze the management of the product at Abuja Energy Surveillance (AES) Ltd, the Boston Matrix will be used as the analysis tool. The company has employed the use of IT to develop an oil and gas monitoring system using drones and Geographic information system to help in the management of oil and gas through theft and pillage along the pipelines. The company has a long term 10 year strategic market share plan that will focus on making the system a market dominant in energy security and environment pollution management for oil and gas industry sector in many countries. Figure 1: Boston matrix analysis Market share Market growth High Stars Fuels and revenue ranking Low Question mark Potential for growth into alternative energy markets and an increase in sustainability Cash cow Emerging markets (Upstream ) Oil and natural gas exploration Field development and production Midstream transportation, storage and processing Marketing and trading of oil and natural gas Dogs (Downstream) Refining Manufacturing Marketing Transportation Supply and trade of crude oil to wholesale and retailers Cash cows Abuja Energy Surveillance (AES) Ltd is an established oil and gas company and enjoys a huge market share. Both the upstream and downstream elements are classified as cash cows. In order to enhance the profits, an IT strategy with the use of GIS and an oil and gas monitoring system using drones will be used. This strategy will help to enhance the responsibility and role of IT. Abuja Energy Surveillance (AES) Ltd should focus on production and exploration of upstream assets as they generate more revenue and consist of high rates of investment rates. Stars Abuja Energy Surveillance (AES) Ltd as a strategy should focus on growth through cost cuts, use of bio fuels, mergers with other companies and acquisition of other companies. The position of the company on the high market growth and share is due to the production of fuels that is supplied to the consumer market. Question mark In order for the company to expand its market, it should invest in both renewable and sustainable energy. Currently, renewable energy holds about 10% of the global market but despite the fact that the market share is low, it has the potential to grow. Moreover, technology such as GIS which is emerging as a very important business tool should be introduced into the system in order to increase the efficiency of the operations of the company. This strategy will change the structure of management and introduce a new division which will be tasked with independent reporting to the top management without interference by other divisions. Dogs This is the last unit and will include segments such as alternative energy business, shipping and treasury. In this unit, the growth of the market and its share is notably low. Due to the shift of the global market towards biofuels and solar energy, it is important that the company puts more focus on this unit as the demand for safe and economic sources of energy is rising in many economies. The IT skills will mainly focus on generating suitable solutions which can replace oil and natural gas. The downstream segments in this case can be classified as dogs since the main focus is mainly on upstream operations. It is advisable that Abuja Energy Surveillance (AES) Ltd sell their downstream operations in order to produce more technological innovations in order to advance the production and exploration of upstream assets of the company. A separate unit composed of an IT team should be introduced into the company so that they specifically deal with technologies which are likely to improve the efficiency of the products. This will call for expansion of the company. Project Life Cycle Management technique Any company that wishes to compete in the global market must be aware of the importance of adopting a business process management model [5]. In order for Abuja Energy Surveillance (AES) Ltd to achieve success in this 10 year project, two crucial goals must be met. a) The company must adopt a new way of defining and managing the project lifecycle within the company. b) Proper and effective use of IT with the business process management model. This project will undergo four different phases during its life including: project incubation; project organization, definition and planning; project execution and project closure. a. Project incubation This is the initial stage of the project. It will involve conceptualization of the main ideas which revolve around use of IT skills to improve marketing and management of products. The management of Abuja Energy Surveillance (AES) Ltd must first authorize the commencement of the project. The business case of the project will be drawn and proper planning of all the tasks that need to be implemented schedule and distributed. This will involve identifying the supply chain for the products, identifying the human resource necessary to carry out the tasks and allocating duties to each one of them. Human resource will mainly include persons with marketing and IT skills. b. Project organization and planning This is the second stage of the project. Mainly, it will involve definition of the terms and requirements of the project in a much broader perspective [6]. A feasibility study of the company and the target market will be carried out to confirm the existent of the product and the access the nature of the target market. In this stage, tests for the effectiveness of the human resource, the supply chain, the software and the financial capacity of the company and the market will be done. c. Project execution In this stage, the developed project will be fully implemented and realized [7]. The GIS software for monitoring theft and oil spills will be integrated into the company system and tested in the real company activities. Human resource persons will be deployed to various divisions and particular tasks allocated to them. d. Project closure This is the final stage of the project and will involve handing over the fully functional project to the company for incorporation into their 10 year plan. This system already has the necessary manpower already properly trained, marketing strategies already defined, manufacturing processes already set out and a supply chain already integrated within. Later, a post completion evaluation can be done on the system to ensure that it is fully functional [6]. References [1] Aroh, K.N; Ubong, I.U; Eze, C.L; Harry, I.M; Umo-Otong,J.C; and Gobo, A.E . Oil Spill incidents and pipeline vandalization in Nigeria, impact on public Health and negation to attainment of Millennium Development Goals, the Ishiagu example disaster prevention and management (2006). (unpublished). [2] Electronic Conference on Sustainable Development Information System. CEDARE. (2006). [3] IfeadiC.N. and NwankwoJ.N. Oil Spill incidents in Nigeria petroleum Industry. A critical analysis NAPECTO 8. (2004). (4): 5-11 [4] “Life Cycle Models for High-Technology Projects – Applying Systems Thinking To Managing Projects,” 4th International Project Management Seminar, PMI-SP Chapter, December 9-10 2004, Sao Paulo Brazil. Retrieved from: http://russarchibald.com/recent-papers-presentations/other-pm-subjects/. [5] Cooper, Robert G., and Elko J. Kleinschmidt, “Stage-Gate Systems for New Product Success” Marketing Management, 1, no. 4 (2003): 20-29. Retrieved from: www.prod-dev.com . [6] Delanger, Thomas C., “Choosing the Project Lyfe Cycle.” Field Guide to Project Management, edited by David I. Cleland. New York: Wiley, 2008, 61.71. [7] Ketzsbom, Deborah S. and Katherine A. Edward, The New Dynamic Project Management—Winning Through Competitive Advantage. New York: Wiley-Inter science, (2001). Read More