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Innovation to Traditional Market Strategy : Report

   

Added on  2020-06-06

8 Pages2176 Words81 Views
STRATEGICDECISION MAKINGIN OIL AND GASINDUSTRY
Innovation to Traditional Market Strategy : Report_1
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1Evaluation of the entry strategy adopted by CNPC to explore East Africa market....................1CONCLUSION................................................................................................................................4REFERENCES................................................................................................................................5
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INTRODUCTIONOil and Gas are the basic needs of an individual and this industry of every countrycontributes a larger part in GDP. Thus, in order to provide benefit to a country by increasing itsGDP it is essential to implement strategic decision making in the Oil and Gas industry(Hebblewhite, 2017) . In the present study, strategic decision making of China NationalPetroleum Corporation (CNPC) is discussed. CNPC is a National Oil Company(NOC)headquartered in the Dongcheng district, Beijing, China. It is the largest oil and gas producingand supplying company of China which is present in 70 countries of the world. Presently, thiscompany is planning to initiate an exploration project is East Africa and to design this plan,strategic decision making is required. This study contains the innovations to the traditionalmarket-entry strategy. Further, the significance of focusing on critical business elements isexplained to evaluate the entry of CNPC in East African oil and gas market. Evaluation of the entry strategy adopted by CNPC to explore East Africa market.To explore new market place, some market entry strategies are required. These policiesare planned method of delivering services to a new target market. These market entry strategiesdepends upon three critical elements namely, customer, company and competition. Strategiesshould be approached while focusing on these factors (Hamdan and Kinsella, 2017) . There arenumerous market entry strategies which can be used while entering in a new market place such asjoint venture, merger and acquisition, exporting, licensing, franchising, strategic alliances, etc.Some market entry schemes while entering market are explained below-Joint venture- A joint venture is formation of a complete new organisation bycombination of two different entities in order to achieve some specific objectives(Wallington and et.al, 2017). But there is also a drawback associated with this strategyand that is the rise of conflicts between two organisations leads to a heavy loss to thenewly formed organisation. This strategy can not be used by CNPC as they don't want toform a new entity, rather want to expand the existing business firm. Strategic Alliance- This is also an investment entry mode, in this method two or morethan two entities co-operate to achieve a strategic goal. Sharing of cost can be done in thissystem but there is also the same risk as joint venture has (Ahmad and et.al, 2017) , and1
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