Comparison of two organizations on the basis of vertical production chain

This article compares two organizations, Shell-Mex and British Petroleum, on the basis of their vertical production chain. It discusses their strategies, behavior, and key factors that underpin their strategy.

Business Strategy

Table of Contents
Introduction .....................................................................................................................................3
TASK ..............................................................................................................................................3
Comparison of two organization on the basis of vertical production chain...............................3
Key Factors underpin their strategy and difference in behaviour between two firms.............4
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................5

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TASK
Comparison of two organization on the basis of vertical production chain
There are two oil companies Shell – Mex and the British Petroleum which has joint marketing
venture (Gerőcs and Pinkasz., 2019). It was formed in the 1935 when both the companies
decided to work together in the UK marketing operations because of the economic crises in the
United Kingdom. This helps them to fight the economic crises but their functions are different
from each other in some of the counties they both are strong competitors of each other but in
British country they both are working together from long time.
British petroleum Royal Dutch Shell
British petroleum is the 3rd largest energy
supply organization in the all over the world,
and they are having location in the 80 different
countries. This company is supplier of the
22400 stations with 8.8 million barrels of the
oil per day. British petroleum company also
provides their services such as retail services
and petrochemical products in more than 100
countries. (Atris and Goto., 2019). This
company is using different technology in their
company will is helping to produce more
petroleum product and services to the pubic.
Some technologies are used by the British
petroleum for their production are Storage
Technology and Carbon capture. This
technology is helpful to deal with the carbon
emissions into the atmosphere. The exploration
and the production segment makes up the
upstream activities of the British petroleum
Supply chain management of the Royal Dutch
Shell is effective because they provide the best
quality hydrocarbon products to the Shell Plc
including; Gas & Oil in order to facilitate the
customers (Gerőcs and Pinkasz., 2019). As
Royal Dutch Shell Plc is operating all around
the world including; United States of America
(USA), Brazil, Canada, Denmark, France,
Germany, Kuwait, United Kingdom (UK),
South Africa, Nepal, New Zealand, Egypt,
Qatar and Sri Lanka. However, it is very
difficult to supply quality Oil & Gas to the
Shell Plc because Shell has 300 terminals and
9,000 Kilometers of pipelines, but they are
working very efficiently as they are providing
best quality fuel to the customers. They are
providing good quality in their product but
there is no diffraction their products and there
is no new products are add by this company.

while transporting of the oil through the
railroad, pipelines, shipping makes up the
midstream activities but this company has also
disadvantages because they are using old
technology and it is important for the British
petroleum to implement new technology will
boost up their production. This will affect on
their profitability and company can
competitive advantages. They can also increase
their expansion in the other developing
countries. Some of the countries like china and
in India are the places where they can expand
their business and achieve high growth in the
market.
Royal Dutch Shell company should add more
petroleum product so they can take competitive
advantages and they should also look for their
product promotion. They can create
opportunity for them by advertising their
products through the social media platforms
etc. they are having presence in the global
market but company is facing high competition
form the international companies who have
strong hold in the most of the market. There
are very less chances for this company to
expand their business in the other countries
because of high competitive poseurs in the
international level and economic competition
on the global level is affecting this company.
Key Factors underpin their strategy and difference in behaviour between two firms
Both companies have different strategies and different production system which has
impact them to take competitive advantages in the market. There are some factors which impact
on their business such as economic condition of the country because prices of the oil fluctuate.
This factors affect every business which are connected with the oil business. One more factors
which affect the most o the both companies are their quality which is important for the
customers and environment as well so both the companies have to provide quality products.
British petroleum is the largest distributor of the oil products which they are supplying in more
than 100 countries, and they are having huge reputation in this industry but Royal Dutch Shell
and this company was ranked as the ninth largest company in the world they are selling less
products as compare to the British petroleum but Mex and the British Petroleum which has
joint marketing venture (Goldstein and Fligstein., 2017). . It has been compare on the basis of
Vertical production chain and also concluded key factors underpin their strategy and
difference on their behavior. It was formed in the 1935 when both the companies decided to
work together in the UK marketing operations because of the economic crises in the United

Kingdom. This helps them to fight the economic crises but their functions are different from each
other (Atris and Goto., 2019). Their behavior for their operation are the same because their
products are same but British Petroleum have more shears as compare two the Royal Dutch
Shell because of their high reputation and more expansion in the whole world. In the other
countries they are competitor of each other, and they are very aggressive with each other but in
UK it is totally different, and they are working together. They Royal Dutch Shell's strategy is to
bring more products in the market show they can increase their business more and British
Petroleum is expanding their business with the proper strategy of the expansion (Irisarri and
et.al., 2016). Leaders and managers of this company have high knowledge of the business
strategy which enables this company to achieve high growth in the market with proper expansion
plan. It is important for the Royal Dutch Shell to improve their company strategy, so they can
expand their business and gain competitive advantages in the other market as well.

REFERENCES
Books and journal
Atris, A. M. and Goto, M., 2019. Vertical structure and efficiency assessment of the US oil and
gas companies. Resources Policy, 63, p.101437.
Gerőcs, T. and Pinkasz, A., 2019. Relocation, standardization and vertical specialization: Core–
periphery relations in the European automotive value chain. Society and Economy.41(2).
pp.171-192.
Goldstein, A. and Fligstein, N., 2017. Financial markets as production markets: the industrial
roots of the mortgage meltdown. Socio-economic review.15(3). pp.483-510.
Irisarri, E. and et.al., 2016, September. A model-based approach for process monitoring in oil
production industry. In 2016 IEEE 21st International Conference on Emerging
Technologies and Factory Automation (ETFA) (pp. 1-4). IEEE.