Bucks New University: BM461 SWOT Analysis Report on Shell (2019-20)

This report presents a comprehensive SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis of Royal Dutch Shell, examining its internal and external environments. The introduction highlights the factors influencing Shell's performance. The main body delves into Shell's internal stren...Read More

SWOT ANALYSIS

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
There are multiple internal and external factors that influence the productivity,
profitability, efficiency and performance of Shell and present it with opportunities and threats in
the consumer markets (Dandage, Mantha and Rane, 2019).
MAIN BODY
The internal environment of a business consists of factors within organisation that
influence business’s operations, which can be controlled by Shell. Its components are human
resource, organisational culture, structure, management, resources etc.
SWOT Analysis is a strategic framework through which business can evaluate their
strengths, weaknesses of internal environment, opportunities and threats in the external
environment of business (Bull and et.al., 2016). Conducting Swot analysis helps businesses
identify their strengths and weaknesses in the market which can provide guidelines to increase
their productivity and profitability while avoiding threats than can jeopardise their operations.
Competency describes the quality, efficiency and performance with which Shell
conducts operations. Capability describes the operational levels, Shell is capable of performing

to (Černý, Vaněk and Hubáček, 2018). Shell’s capabilities include their ability to refine oil.
Distinctive Resources are essential resources of a business that cannot be imitated or obtained
by competitors, providing business with competitive advantage.
Competitive advantage is a factor that allows a business to increase its productivity,
profitability and market share by giving it advantage over its rivals in the industry. Assessing
strengths and weakness of business is crucial to obtaining competitive advantage.
Shell is an oil and gas business that operates in various countries. Their operational
model includes procurement of raw materials, production, refining, marketing and distributing.
For its operations Shell requires physical resources tangible resources used such as oil,
financial resources are monetary resources required including cash, forex etc. and human
resources are the human requirements of the business comprising of employees, managers etc.
Organisational structure determines how a business organisation operates to achieve its
end objectives. Functional structure is most common and breaks up the organisation on the
basis of skills and experience of its employees. Geographical Structure organises the business
based on location of its workforce. Product Structure organises the business’s operations on the
basis of their diverse products (Mukabi and et.al., 2017). Matrix structure used in few
businesses, organises based on job of workforce with distinct jobs often merging together.
Virtual structure is used to organise workforce that is physically apart from each other using
the internet.
This report assesses how PESTEL factors impact Shell’s operations through TOWS matrix.

TOWS Matrix of Shell:
Internal
Factors
External Factors
STRENGTHS S
 Customer satisfaction
 Brand value and
reputation
 Good infrastructure
 Investment into
distribution network
 Supplier relations
 Research and
development
 Money
WEAKNESSES W
 Old Equipment
 Organisational
corruption
 Poor management
 High Debt
 Predicting demand
 Product Marketing
OPPORTUNITIES 0
 Reduction in
corporate tax in
UE.
 Decrease in
Interest Rates.
 Enterprise
Architecture.
 Expansion to
international
markets.
 New refining
technology.
 Competition from
small industries
which can be
acquired.
S-0 PLANS (STRATEGIES)
 Investment into
equipment due to good
brand value and
reduction in corporate
tax charged.
 Increased productivity
by expanding operations
to global markets.
 Increased profits due to
supplier relations to
expand globally.
 Expansion into global
markets as Shell’s good
infrastructure and
distribution network can
increase productivity.
 Customer base can be
increased by customer
satisfaction (Gottfried
and et.al., 2018).
 Can vertically and
horizontally merge to
increase productivity.
W-OPLANS (STRATEGIES)
 Decrease corruption to
increase profitability
in global markets
 Decrease operational
costs and losses by
investment into new
equipment
 Apply EA to improve
management.
 Market using digital
channels to expand
globally
 Manage debt
effectively using EA
 Conduct thorough
market analysis to
predict demand in
global market
THREATS
 Competition
 Curroption
 Renewable sources
of energy
 Increase in
supplier’s price
S-T- STRATEGY—
 High brand value can
help during public
environmental concerns.
 Customer satisfaction
can help in inflation and
Brexit.
W-T STRATEGIES (PLANS)
 Investment into
equipment from EU
can help if exchange
rate decreases.
 Addressing corruption
by applying code of

 Rising climate
change concerns
 Decrease in
exchange rate
 Inflation
 Supplier relations can
help with supplier prices.
 Satisfaction of customer
base can help deal with
alternative sources of
energy.
 Investment into new
equipment can aid in
increase of supplier’s
prices.
 Infrastructure and
distribution network can
aid combat competition.
conduct.
 Effective marketing
can aid alleviate
climate concerns.
 Demand prediction
can help during
inflation in EU.
 Adequate debt
management can aid
during Brexit (Gürel
and Tat, 2017).
 Effective management
can curtail increase of
supplier prices.
Impact of Opportunities and Threats on Shell’s Production and Operations:
1 All operations and functions of Shell are immensely important to its productivity and
profitability. It is immensely essential for Shell’s equipment to have high performance and
efficiency while decreasing their operational costs.
2 Shell’s strengths in the markets include its high brand value and reputation amongst its
competitors, high customer satisfaction and loyalty rates amongst its customer base and good
vertical integration (Phadermrod, Crowder and Wills, 2019).
3 Shell can use its high brand value to expand into international markets which provides it
immense opportunities to grow and expand its productivity, profitability and customer base
while diversifying its operations.
4 Shell can make use of its great relations with their suppliers to keep them from dramatically
increasing the prices of raw materials in the markets. Shell can also increase its customer
satisfaction to avoid losses due to alternative sources of energy
5 Shell can reduce its weaknesses by addressing the organisational corruption in its organisation
by applying code of conduct. Shell can also invest into new operational refining equipment to
increase productivity and efficiency.

6 Shell can use its great infrastructural and distribution, logistical network to reduce the negative
impact of its old and aging operational equipment as its large infrastructure and distribution also
required huge investments and generates increased profits.
Impact of Opportunities and Threats on Shell’s Marketing:
1 Marketing is the business process through which Shell advertises and promotes its products to
the consumers in market using 4 P’s – price, product, place and promotion.
2 Shell has various strengths that include its marketing using traditional channel which include tv
and radio promotions, magazines etc.
3 Shell can make efficient and effective use opportunity digital technologies present by using
digital channels of marketing as it provides immense opportunities for Shell to advertise to a
large audience at minimal costs incurred.
4 Effective marketing will help Shell’s operations in times of inflation in the market when
consumer’s purchasing power decreases (Blockeel and et.al., 2016). Effective marketing can also
help alleviate public environmental concerns. Shell can also control the effects of inflation by
widening choice of suppliers.
5 Weakness of traditional marketing is that its performance and efficiency cannot be measured
and evaluated for improvement. Through effective marketing Shell can expand to international
markets even though its operational equipment is getting old.
6 Shell can make use of its high brand value in its marketing operations to reduce the impact of
its weaknesses.
CONCLUSION
Shell needs to take advantage of the opportunities in the market to grow and expand the
productivity and profitability of their operations while avoiding threats.

REFERENCES
Books and Journals
Blockeel, C. and et.al., 2016. A fresh look at the freeze-all protocol: a SWOT analysis. Human
reproduction. 31(3). pp.491-497.
Bull, J.W. and et.al., 2016. Strengths, Weaknesses, Opportunities and Threats: A SWOT analysis
of the ecosystem services framework. Ecosystem services. 17. pp.99-111.
Černý, I., Vaněk, M. and Hubáček, J., 2018. New approach to evaluate the TOWS matrix and its
application in a mining company. Journal of the Southern African Institute of Mining
and Metallurgy. 118(12). pp.1297-1303.
Dandage, R.V., Mantha, S.S. and Rane, S.B., 2019. Strategy development using TOWS matrix
for international project risk management based on prioritization of risk categories.
International Journal of Managing Projects in Business.
Gottfried, O. and et.al., 2018. SWOT-AHP-TOWS analysis of private investment behavior in the
Chinese biogas sector. Journal of Cleaner Production. 184. pp.632-647.
Gürel, E. and Tat, M., 2017. SWOT analysis: a theoretical review. Journal of International
Social Research. 10(51).
Mukabi, M. and et.al., 2017. Using Tows Matrix as a Strategic Decision-Making Tool in
Managing KWS Product Portfolio.
Phadermrod, B., Crowder, R.M. and Wills, G.B., 2019. Importance-performance analysis based
SWOT analysis. International Journal of Information Management. 44. pp.194-203.