Case 1: Chevron
October 24, 2011
Introduction of the Company
Chevron began with the discovery of oil north of Los Angeles in 1879 and was originally named the Pacific Coast Oil Company. Later John D. Rockefeller’s Standard Oil bought Pacific Oil in 1900 to form Standard Oil (California). In 1911, the Sherman Antitrust Act would force the breakup of the parent Standard Oil and Chevron became Standard Oil of California or Socal. Socal would go on to form joint venture with Texaco in 1936 to form Caltex, to develop and market oil in the Middle East and Indonesia. It would then go on to form the Aramco partnership in the Middle East, which composed of Socal, Texaco, Exxon and Mobil but by 1980, Aramco was completely owned by the Saudis and became the Saudi Arabian Oil Corporation.
In 1984 the merger between Standard Oil of California (Socal) and Gulf Oil was the largest merger in history at that time, nearly doubling the company’s size and as part of the merger Socal changed its name to Chevron Corporation. By 1988 Chevron was one of the largest gas producers in the United States. In 2001, Chevron expanded again by acquiring Texaco for $37.5 billion. Today Chevron is the second largest integrated energy company in the U.S. and among the largest in the world. Mission Statement Analysis
“Our Company's foundation is built on our Values, which distinguish us and guide our actions. We conduct our business in a socially responsible and ethical manner. We respect the law, support universal human rights, protect the environment, and benefit the communities where we work."
Since Chevron is an oil company, it is imperative that their mission statement reflects the importance of operating in a responsible and ethical manner. They want to let the world know that they respect the laws, human rights, the environment, and more importantly want to provide a benefit to the communities it serves rather than bring harm to them.
Chevron’s marketing tends to be more complex than just selling gas at the pumps; it focused a large part of its 2008 television campaigns on the environmentally friendly and human side of its world-class operations. As mentioned earlier, this is particularly important in establishing a good reputation in an industry with an image problem. Chevron’s marketing division is responsible for the marketing, advertising, sale and delivery of its products and services to retail, commercial and industrial customers worldwide, which include 25,000 retail outlets located in the U.S., Latin America, the Caribbean, Asia, South Africa, and the United Kingdom. The strategy is to focus on three marketing points; provide clean, safe, reliable operations through operational excellence; align the marketing portfolio to capture integration value with the refining system; and leverage brands to grow value in key markets.
The marketing portfolio has become more closely align with the company’s refining system through market exits and divestitures of retail sites in an attempt to focus in areas of market strength. Starting in 2004 the company began selling its marketing businesses in 22 countries around the world exiting the fuels-marketing business. Today Chevron markets itself under three key brands: Chevron, Texaco, and Caltex. Chevron was ranked as the most powerful gasoline brand in the United States for five consecutive years. At the end of 2008, more than 5,000 Chevron retail sites had been updated as part of a multi-year marketing strategy to refresh the Chevron brand image. More recently Chevron continues its market thrust in clean premium fuels through the expanded incorporation of patented activities such as Techron and in 2008, Chevron sold gasoline with Techron in 27 countries, comprising 90 percent of the branded gasoline sold worldwide.
Chevron’s organizational structure consists of a Chairman and CEO by the name of David...
References: Strategic Management, Concept & Cases 13th ed., David
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