7155AFE Strategic Management Accounting Project: Caltex Analysis

This project analyzes Caltex Australia Limited, an ASX-listed company in the fuel supply and convenience store business, using strategic management accounting principles. It begins with an introduction to Caltex, followed by a value chain analysis, outlining primary and support activities. The project examines Caltex's vision, mission, and applies Porter's Five Forces to assess competitive dynamics. It identifies key stakeholders, analyzes performance measures like RCOP and shareholder return, and details the reward system for top executives. The project highlights both opportunities and threats in the energy sector, concluding with an overview of Caltex's successful operations. References include Caltex's annual reports and website, providing context for the analysis. This project is a comprehensive strategic management accounting analysis of Caltex Australia Limited.

STRATEGIC
MANAGEMENT
ACCOUNTING
CALEX AUSTRALIA LIMITED

INTRODUCTION
• Caltex Limited is an ASX listed
company.
• It is engaged in the business of
supplying transportation fuel.
• It also has various convenience
stores across the country.

Value Chain Analysis
Primary Activities: Support Activities
 Inbound Logistics
 Operations
 Outbound
Logistics
 Marketing and
Sales
 Procurement
 Technological
Development
 Human Resources
 Infrastructure

Caltex’s Vision and
Mission
Vision:
• To become the leading oil
refining company in
Australia.
Mission:
• To supply and distribute fuel
as well as lubricant products
to different markets.

Porter’s Five Forces of
Caltex
 Threat of new entrants-
Low
• High entry barriers
• Customers loyalty towards
existing brand.
 Threat of Substitutes-
Low
• Limited Substitutes

Continued..
 Threat of Existing Rivalries: Low
• Few competitors
 Threat of bargaining power supplier:
Low
• High competition among suppliers
 Threat of bargaining power supplier:
Low
• Large number of buyers
• Limited buyer’s choice
• Importance of Caltex’s products

Caltex’s External
Stakeholders
 Customers
 Suppliers
 Government
 Providers of Finance:
• Shareholders
• Banks and Financial Institutions

Caltex Performance
Measures
 Replacement cost of sales operating
profit (RCOP) NPAT
 Total shareholder’s return
 Strategic growth measure
 Strategic convenience retail measure
(Caltex, 2017).

Reward System of Top
Executives
 MD and CEOs: STI opportunity: Increase
10% of Basic Salary from 60% to 70%
 Other senior Executives: STI opportunity:
Increase 10% of Basic Salary from 50% to
60%

Continued…
 Audit and Human Resources
Committee Chairperson: Increment
of $10,000 in sitting fee.
 Non-executive directors: Increase in
base fees of 2%
 OHS & Environmental Risk Chairman:
Increment of $4,000 (Caltex, 2018).

Conclusion
• The business of Caltex is being
operated successfully.
• Huge opportunities are available for
Caltex in Energy Sector.
• Along with opportunities various
threats are also there.

References
• Caltex (2017) About Caltex [online]. Available from
http://microsites.caltex.com.au/annualreports/2017/
[accessed 7 September 2018]
• Caltex (2018) Our Vision [online]. Available from
http://microsites.caltex.com.au/annualreports/2007/caltex/4
060_CaltexsVision,ValuesandStrategicIntents.html
[accessed 7 September 2018]
• Caltex (2018) Our Company Proudly fuelling Australia
since 1900 [online]. Available from
https://www.caltex.com.au/our-company [accessed 7
September 2018]