Subject: Applied Strategic Management
(2)Analysis of the external and industry environments for SPC 4 – 5 (3)Internal Analysis of SPC 6 – 8
(4)Performance analysis 9 – 10
(5) SWOT 11
(6)Strategic Options and Recommendations 12 – 17
(7)Implementation of strategy 18 – 20
(8)Analysis of models 20 - 21
(10) Appendix 21 -23
Year 2007 was strong economic growth for the global economy. This was due to tight global refining capacity and continued strong demand for energy to fuel economic growth especially from China, India, the Middle East and Russia.
Singapore Petroleum Co Ltd (SPC) is a Singapore-based company. The principal activities of the Company consist of exploring, developing and producing oil and gas, petroleum refining, marketing, distribution and trading of crude oil and petroleum products and the provision of administrative support services. In line with the Vision “To Be Strong Integrated Oil and Gas Company”, the group has further invested in oil and gas producing assets, while developing the existing acreages.
An External analysis conducted on SPC using PESTEL. Four factors contribute to the SPC’s threat and opportunity they are economy, technology, society and environment. Followed by Porter’s 5 Forces the competitive environment analysis indicate that Intensity of rivalry is high while the rest of the forces are low, this also contributes to the threat. Later an internal analysis also conducted using Value Chain Model to discover the strength and weaknesses of SPC. This was including financial performance on the efficiency, effectiveness and return on investment. All this analysis helped to reveal the strength and weaknesses of SPC from wider angle.
Substantial analysis on SPC, enable us to recommend strategic options based on TOWS matrix. Ten strategic options suggested and only five were strongly recommended based on rating and further enforced with two more criteria and they are value creation and tangible benefit. Finally, to implement all the recommended strategies five guidelines chosen, they are system, structure, policy, economic situation and technology development.
SPC’s vision is to be strong, integrated Oil and Gas Company with premium brand in Asia Pacific region, in order to achieve the vision SPC has to continuously strive for excellence and provide quality service to remain competitive among their competitors.
1.1 External Analysis (PESTEL analysis)
I have selected Singapore Petroleum Company Limited (SPC) as my assignment company. An External analysis was done on SPC to understand the environment of the company. Chart 1.1a shows the impact of the PESTEL to SPC. Economy
Currently crude oil prices has moved higher in the 2008 first quarter due to geopolitical tensions and strong global demand for oil, this has resulted SPC to pay very high price to buy its crude oil for its refinery production. This has caused refined petroleum products to fail to keep pace with the sharp rise in oil prices, and refining margins have narrowed. In addition the high cost in operation, logistic, waste management and transportations has reduced the profit margin of SPC. Economically SPC has to face the instability in exchange rate due to weakening US dollar. Technology
SPC faces tough competition among big players like Exxon Mobile, Royal Dutch Shell and BP to produce large amount of refinery oil to meet the Asian...