Marketing Audit for Royal Dutch Shell PLC

Running head: MARKETING AUDIT
MARKETING AUDIT
Student’s Name
University Name
Author note

1
MARKETING AUDIT
Summary
The purpose of this report is to analyze Royal Dutch Shell PLC which operates in oil and gas
industry in UK. The company is well reputed and has a global presence. The report introduces to
the company and the industry in which it operates. It determines the external and internal
environmental analysis. It provides detailed description of the markets, customers, and
competitors with the help of porters five force analysis. It identifies the position of the brand
with the help of competitor perceptual map. It analyzes the internal environment, the strategies,
functions, and productivity of the business organization. Further, it identifies the strengths,
weakness, opportunity, and threats of the company. Lastly, the report sums up the main points
and concludes the report.

2
MARKETING AUDIT
1.0 Introduction
Royal Dutch Shell Plc operates within the oil and gas industry sector. The business
organizations involve themselves by exploration and production as well as supplying different
range of petroleum products. The operating subsidiaries of the business organizations are
managed by shell international (Shell.com. 2020). They are divided into several divisions
including exploration/production, oil products, gas, and power, chemicals. Other divisions
include Coal, Hydrogen, renewable and forestry. The mission and vision of the business
organization is to safety market and distribute its petrochemical products along with value added
services. The company operates in a highly competitive business environment, and faces direct
competition with Chevron, BP, Exxon Mobil, and ConocoPhillips (Shell.com. 2020).
2.0 Macro Analysis
3.0 PEEST
Social - In today’s business environment, consumers are more aware of conscious consumption
focusing on safety and career attributes. The consumers are obligating the oil companies like
shell to incorporate responsible consumption. Therefore, Shell is in increased social pressure on
the companies to engage in responsible consumption (Rastogi, N.I.T.A.N.K. and Trivedi 2016).
However, the business organization responds the social issue by rigorous advertising and
promoting the brand name. Shell advertises the brand as a highly responsible producer of oil
products and services.

3
MARKETING AUDIT
Environment - These factors includes the climatic factors which might influence the operations
and decisions in the business organization. Research suggests that the level of carbon emission is
high from manufacturing crude oil and fuel (SHTAL et al. 2018). Shell has been ranked as one
of the most carbon intensive manufacturing units in the world. Hence, the business organization
continued to invest in new reserves. There is an increasing trend of electric cars and battery cars
which threatens the profitability of the business organization.
4.0 Micro Analysis
Markets - The business organization invests in advanced machinery for the purpose of drilling
and extraction of gas and oil industry. The business organization also heavily invests in research
and development opportunities (Bohi 2017). Further, Shell focuses on unconventional reserve of
oil and gas; this benefits the business organization to great extent. Moreover, the company
engages itself in forming strategic alliance which is highly beneficial for the business
organizations. Shell’s partnership with Cosan (S.A) company has enables the business
organization to reduce its expenditure and expand its business in ethanol market (Ng and Donker
2013). However, the brand is most preferred as compared to other competitors in the UK market.
The company mainly focuses on recruiting talented and skilled employees, who has the
capability to innovate its products and services. The company provides various monetary and
non monetary incentives to the employees and the workers to motivate the employees (Ahmad et
al. 2016). However, it has been indentified that the company has limited investment in biofuels
and it is considered to be most crucial for the business organization as bio fuels are rapidly

4
MARKETING AUDIT
increasing in demand. Shell must also focus on numerous health and safety problems and
challenges
Customers: Shell has a diverse portfolio and expertise in gas. The company provides value
added services to large and energy intensive companies, energy asset investors, various
production companies, storage and transport powers, commodity trading business organizations
and other storage and transport providers (Ng and Donker 2013). There are mainly two variables
to segment its customers in the market including personality and benefit. Shell targets the set of
consumers have similar needs and preferences.
Competitors
Porter’s 5 force Analysis
Bargaining Power of Suppliers - It has been identified that oil and gas industry purchases their
raw materials from various suppliers. The suppliers of the business organization are in a position
which can decrease profit margin of Royal Dutch Shell Plc in the market (Dobbs 2014).
However, the company has a vertical integration strategy of shell, the bargaining power of the
suppliers are low. Royal Dutch Shell Plc implements various negotiating power to extract high
price from the consumers and the firms in the oil and gas industry (Abdelrehim, Maltby and
Toms 2015). The business organization has the power and the capability to merge and form
alliance with other companies in the oil and gas industry.

5
MARKETING AUDIT
Threat of New Entrant - The threat of new entrance in the market is low. It requires heavy
investment and capital for setting up a new business in the oil and gas industry. It requires many
years of experience in this particular fields (Hennchen 2015).. Further, it takes time and effort to
acquire new employees and skilled labors in the market. The presence of top players in the
market such as Shell, BP and other competitors, dissuades new entrance in the market. However,
the new entrance in the markets has the power to offer more innovative products and services at
a lower price. This might put the company on pressure (Pan 2013). Shell has to manage the
challenges and build effective barriers in order to protect its competitive edge.
Competitor Perceptual Map
BP has a strong forward and background integration. BP is one of the strongest
competitors of Shell. There is every stage from field to sales, just like shell. The company has
nearly 18,000 retail stores throughout the country (Mohanraj, Siddique and Ramesh 2014). The
company has its share in around 11,000 service stations in UK. Furthermore, the company had
17 petrochemical manufacturing facilities in the entire globe. The company has seasonal
financing; the company has primary listing on London Stock Exchange (Mohanraj, Siddique and
Ramesh 2014). The company also faces stiff competition from ExxonMobil, forward and
background integration. The company controls all stages starting from manufacturing to
marketing. The company has more than 11,000 service stations and various divisions including
Exxon, Esso, XTO and Mobil. The company is considered to be the biggest public company as
per Forbes. However, by revenue that company is the top most earning company as compared to
other competitors (Pan 2013).