Strategy Management : Petrobras - Coursework Example

These subsidiaries are Petrobras Distribuidora, Transpetro, Gaspetro, Petrobras Biocombusivel and Petroquisa. PETROBRAS is the oil industry leader in Brazil and among the biggest National Oil Company in South America. Currently, the company has operations in several industries such as Libya, United Kingdom, Nigeria and United States of America. PETROBRAS has a 2020 mission and vision that are founded on pillars of growth, socio-environmental obligation as well as profitability (Financial Times, 2012).

The key reason I chose to evaluate on PETROBRAS strategy is because the oil and gas are the key players and determinants of the global economy. As a big player in the oil industry, it thus becomes imperative to explore PETROBRAS Corporation to evaluate its strategies, which directly or indirectly have an impact on the entire world economy. The drive to evaluate PETROBRAS was driven by the frequent changes in the prices of oil and gas that affects majority of households in the world. Financial status PETROBRAS has a market capitalization of $ 101.

29 billion. The corporation shares are traded t the New York stock exchange with the lowest price of share price recorded at $ 12.03 and a high of $ 24.83. Recently, PETROBRAS exceeded its second quarter profit estimates as a result of increased production of pre-salt fields. PETROBRAS revenue and yearly profits grew by five percent in 2011 as compared to 2010. However, the company has been experiencing highs and lows (Financial Times, 2012). For illustration, PETROBRAS registered a negative growth in 2001, 2002 and 2009.

2001 reduction in growth is attributable to the P-36 oil platform explosion and eventual loss. The decline in 2002 is attributable to the large sums of the cleanup costs while 2009 results are attributed to the economic slump experienced globally due to the 2008 financial crisis (Petrobras, 2012). PESTLE analysis The PESTEL analysis is a strategic tool to evaluate a company external operating environment. PETROBRAS PESTEL analysis will help identify the political, environmental, social, technological, legal and economic forces influencing PETROBRAS operations. 1. POLITICAL PETROBRAS is characterized by intense political influence and intervention from the government.

The corporation’s majority shareholder is the Brazilian government and this heightens the level of political intervention in PETROBRAS key decisions. In addition to direct intervention in PETROBRAS through shareholding, the government also impacts indirectly as it is the chief owner of hydrocarbon resources (Dore and  Sinding-Larsen, 1996). As the controller of oil and gas reserves, the government has the power to sell concessions to different companies to explore and produce oil within a given geographical area at a certain time.

In the case of PETROBRAS Corporation, the political influences works to its benefits as the Brazilian production sharing scheme offers PETROBRAS a 30 percent least operating state in all new operating subsalt fields. The internal geopolitical environment in Brazil offers PETROBRAS an excellent opportunity to carry out its operations optimally as compared to other global corporations that are located in extremely political risk countries such as Iraq. A favorable political environm