Strategic Issues Assignment - Perenco company

Added on - 22 Nov 2020

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STRATEGIC ISSUES
Table of ContentsINTRODUCTION...........................................................................................................................1a. Strategic analysis of Perenco...................................................................................................1b. Key Strategic Paradoxes and their related tensions................................................................4c. Strategic Recommendation and their Consequences...............................................................5CONCLUSION................................................................................................................................8REFERENCES................................................................................................................................9
INTRODUCTIONEvery business successfully runs due to formulation of effective strategies. It facilitates inproviding growth and expansion to trade activities. Every firm competes with rivals on the basisof effective planning done that includes several tactics (Abushova, Burova and Suloeva, 2016).There are many issues, which arises due to several reasons. They are needed to be controlled anderadicated in order to provide successful implementation of these strategies.The following report includes the Strategic analysis of Perenco company and its relatedstrategic paradoxes as well as tensions. Also, recommendations have been provided to eliminatethese problems which are faced by company.About PerencoIt is an independent oil and gas firm, which is operating in 13 countries around the worldand includes countries from Northern Europe to Africa as well as South America to South EastAsia. Its operation comprise of both off shore and onshore.a. Strategic analysis of PerencoStrategic analysis is defined as a method of conducting investigation of businessenvironment that influence functioning of an organisation. With this, company can formulatestrategies. It helps in achieving goals and objectives (Amaldoss, Desai and Shin, 2015). Itfacilitates in determining the most appropriate path for effective planning.Some of the Strategic tools, which will be used for determining drivers that affectPerenco can be PEST or Porter's five forces model.PEST AnalysisPolitical-It determines theimpact, which are related to political structure on commercialactivities. There are many governmental policies that regulate the energy industry. Politicaldecisions can affect several areas of Perenco such as its employees, quality as well as health of anation.There are numerous factors which considered as threats for its trade related to oil and gas,discussed as below:11Geopolitics-It can be defined as the effect of geographical conditions on politics andassociated international relations. It provides a study related to foreign policy for1
understanding, explaining or predicting the political behaviour of another nation on basisof geographical variables. There are many conflicts among nations due to certaingeographical territories related to land or water that can create a scenario of tension andcan influence trade activities around the world. It leads to affect relations as well as tradebetween countries.11Political Instability-It leads to affect strategies related to expansion of a business asthere are several reasons, which impacts political stability of a country and it directlyinfluences the development of Perenco in that area. Also, there are several rules andregulations, which are assigned by the government for effectively regulating the workingof oil and gas sector.11Government Controlling- In oil producing territories, majority of oil reserves and globalproduction of oil is governed by legal authorities (Boeke and Schuurman, 2015). Apartfrom this, the private firms, which are running same business has less share in the marketthat affects their commercial trade in many ways.Economic Factors-These factors are related to economy of a territory where company isoperating. High interest rates may lead to demoralize investors as their cost of raising funds canincrease. Strong Currency can make export activities to be costly due to rise in prices of foreignmarket. During the time of inflation, it can result in demands of higher wages from workers thattends to maximise cost related to production.Apart from this, increase in growth of income facilitates increased demands of oil as wellas gas products. Also, some of the major factors that affect connection of this sector withinternational economy can be global economic crisis, which can impact production of productsand its selling in different countries. Bankruptcy of several commercial banks can occur due toinvestment in other risky products such as their derivatives. Along with that, many countries areover debt that can be alarming situation for Perenco. Prices of oil and gas can be considered asprimary factor for deciding feasibility criteria of particular reserve.Social Factors-It generallyexpresses features such as demographic criteria, culture,income, migration as well as ideological perception regarding an issue. Also, every culturesupports this industry as it is the fuel provider for certain activities. World can consider it as a2
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