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Table of Content
PESTEL...............................................................................................................................................2
Organization’s resources (Human, Physical, Intangible).....................................................................3
Financial resources............................................................................................................................3
Organisations distinctive activities/competences..............................................................................4
VRIO: Select 5 activities from Value Chain and apply VRIO to these..................................................4
TOWS MATRIX....................................................................................................................................5
References:........................................................................................................................................6
PG MBA22102 (Sept) Strategic Management and Business 23-24
PG MBA22102 (Sept) Strategic Management and Business 23-24
Poster Presentation
Company: Shell
Industry and context: Oil and Gas
PESTEL
Political The UK has a political stability rate of 0.5 (on a scale of -2.5 to 2.5) (TGE, 2024).
Stable political environment provides a reliable operational base for Shell,
although Brexit-related uncertainties may still pose challenges.
Economic The UK's inflation rate is 2% (Statista, 2024a). Higher inflation increases
operational costs for Shell, affecting profitability and pricing strategies.
Socio-cultural Oil and gas consumption in the UK was 1.33 million barrels per day of oil
(Statista, 2024b). High demand for oil and gas underscores the importance of
Shell's role in the UK energy market but also necessitates adaptation to growing
sustainability demands.
Technological Internet penetration rate in the UK is 95% (Statista, 2024c). High internet
penetration supports Shell's digital transformation initiatives, improving
operational efficiencies and customer engagement.
Ecological UK's carbon emissions target aims to achieve net-zero by 2050 (BBC, 2024a).
Shell needs to invest significantly in sustainable practices and renewable energy
technologies to comply with these regulations, increasing operational costs.
Legal The corporate tax rate in the UK increased from 19% to 25% in 2023 (BBC,
2024b). Increased corporate tax reduces Shell's net income, necessitating
efficient cost management to maintain profitability.
Table 1: PESTEL
PG MBA22102 (Sept) Strategic Management and Business 23-24
Organization’s resources (Human, Physical, Intangible)
Resource Explanation
Skilled workforce of approximately 81,000 employees globally, including top
Human
engineers and scientists (Shell, 2024).
Extensive network of oil rigs, refineries, and distribution facilities
Physical
worldwide.
Strong brand reputation, extensive patent portfolio, and proprietary
Intangible
technologies in energy extraction and processing.
Table 2: RESOURCES
Financial resources
Ratio 2022 2021 Interpretation
ROCE (%) 14.8% 13.5% Improved efficiency in generating
19286∗100 16200∗100 profits from capital employed.
1 30 000 120000
Current 1.5 1.4 Slight improvement, showing better
ratio (times) 45000 42000 liquidity position and ability to cover
30 000 30000 short-term liabilities.
Gearing (%) 42.3% 45% Reduced gearing, indicating lower
55000∗100 54000∗100 financial risk.
130000 120000
Interest 12.5 10 Improved ability to cover interest
Cover 19286 16200 expenses from earnings.
(times) 1542 1620
Table 4: FINANCIAL ANALYSIS
PG MBA22102 (Sept) Strategic Management and Business 23-24
Organisations distinctive activities/competences
Infrastructure Well-coordinated financial policies and corporate governance to cater for
all the operations in the company and meet all the regulatory
requirements.
Human Continuous training and development programs for approximately 81,000
Resource employees globally to maintain high service standards and employee
Management competence (Shell, 2024).
Technology Investment in R&D for renewable energy technologies and digital
Development solutions to improve operational efficiency.
(R&D)
Procurement Successful supplier relationships management for procuring high-quality
raw materials that can be produced sustainably.
Support Inbound Operations Outbound Marketing Services
activities logistics logistics and sales
Proper co- Operations Efficient A strong Services
ordination Quality and international market Product support
in the efficiency of distribution influence, including
supply the extraction system to advertising, customer care
chain so and refining deliver energy and other services and
Primary that it processes products to the marketing other support
provides with global market. approaches to services that
activities timely sophisticated create improve the
acquisition extraction awareness of satisfaction of
and plants energy customers.
delivery of worldwide. products and
the raw environmenta
materials l conservation.
to
refineries
and plants.
Table 5: Value Chain (no discussion)
VRIO: Select 5 activities from Value Chain and apply VRIO to these
Competence/activity Valuabl Rare Inimitabl Supported by Implications
(All Strengths) e e the (distinctive or Core
Organisation competence)
Advanced Extraction and 🗸 🗸 🗸 🗸 Distinctive
Refining Processes Competence
Strategic Sourcing and 🗸 🗸 X 🗸 Distinctive
Procurement Competence
Investment in Renewable 🗸 🗸 🗸 🗸 Core Competence
Energy R&D
Robust Global Distribution 🗸 🗸 X 🗸 Distinctive
Network Competence
Comprehensive Customer 🗸 🗸 🗸 🗸 Distinctive
Support Services Competence
PG MBA22102 (Sept) Strategic Management and Business 23-24
Table 6: VRIO (no discussion)
Competence Innovative R&D
Valuable Shell's Innovative R&D is valuable as it drives the development of new,
cutting-edge energy solutions, ensuring competitive advantage and meeting
market demand.
Rare Shell's Innovative R&D is rare due to the extensive resources, expertise, and
significant investment required, which few competitors can match.
Inimitable Shell's Innovative R&D is inimitable because it involves proprietary
technologies, unique scientific knowledge, and patents that are difficult for
competitors to replicate.
TOWS MATRIX
Opportunities (O) Threats (T)
Strengths (S) SO Strategies: 1. Utilize strong R&D to ST Strategies: 1. Leverage brand
develop new energy solutions for emerging reputation to mitigate competition.
markets. 2. Expand strategic alliances to 2. Strengthen supply chain to ensure
enter new renewable energy markets. consistent product availability.
Weaknesses WO Strategies: 1. Improve market WT Strategies: 1. Address financial
(W) presence by enhancing digital platforms. 2. risks by optimizing cost
Invest in advanced technologies to management. 2. Enhance regulatory
improve efficiency and innovation in compliance to mitigate legal risks.
energy production.
Table 7: TOWS (no discussion)
PG MBA22102 (Sept) Strategic Management and Business 23-24
References:
1. BBC, 2024a. Climate change: Is the UK on track to meet its net zero targets?
[Link]
2. BBC, 2024b. Corporation tax: Jeremy Hunt confirms rise to 25% from April.
[Link]
3. Shell, 2024. Annual report.
[Link]
4. Statista, 2024a. Inflation rate for the Consumer Price Index (CPI) in the United
Kingdom from January 1989 to June 2024.
[Link]
united-kingdom-uk/#:~:text=The%20UK%20inflation%20rate
%20was,11.1%20percent%20in%20October%202022.
5. Statista, 2024b. Oil consumption in the United Kingdom (UK) from 2004 to 2023.
[Link]
uk/
6. Statista, 2024c. Internet usage in the United Kingdom (UK) - Statistics & Facts.
[Link]
7. TGE, 2024. United Kingdom: Political stability.
[Link]
PG MBA22102 (Sept) Strategic Management and Business 23-24