LSBM306 - Strategic Analysis of Royal Dutch Shell's Business

This report offers a comprehensive strategic analysis of Royal Dutch Shell PLC, a prominent player in the oil and gas industry. It begins with an introduction to the company, its history, mission, and vision. The report then delves into an analysis of Shell's internal environment, utilizing the VRIO framework to assess resources and capabilities such as global presence, quality product offerings, software, and employees. A value chain analysis further examines support and primary activities, highlighting inbound logistics, operations, outbound logistics, marketing and sales, and customer service. The analysis extends to the external environment, considering political, economic, social, technological, environmental, and legal factors impacting Shell's operations, including the effects of Brexit and technological advancements. The report also includes a SWOT analysis, identifying strengths, weaknesses, opportunities, and threats. Finally, the report evaluates the competitive forces within the industry, providing a holistic view of Shell's strategic position and challenges.

Royal Dutch Sell
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INTRODUCTION -150...................................................................................................................3
MAIN BODY...................................................................................................................................3
Analysis of internal environment...........................................................................................3
Analysis of external environment-.........................................................................................5
Political:.................................................................................................................................5
Analysis of competitive forces within the industry................................................................6
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9
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INTRODUCTION
Business environment is a collection of internal as well as external factors which have direct
and indirect impact upon organisation operations and profitability. There are different factors
like stakeholders, consumers, industry, suppliers, regulation of government, economic and social
factors, technological development etc that have tendency to impact organisation business
operation in number of ways (Bartman and De Groot, 2021). It is essential for a company to
conduct market analysis with the help of significant tools and techniques to identify the impact
of these factors and further implement strategies to overcome them. Present report is conducted
on Royal Dutch Shell PLC which is operating in oil and gas industry. Company was founded in
the year 1987 and offer wide range of services with high quality products and consumer
facilities. Present discusses company's internal and external market analysis alone with the
evaluation of organisation competitive forces in industry.
MAIN BODY
Shell from history to mission and vision statement
Royal Dutch Shell PLC was founded in the year 1890 as an amalgamation of two rival
companies. Company operates its business operations with strategies and have a mission which
is to safely market as well as distribute petrochemical and energy products while providing
innovation and value-added services. While mission statement of company is to make difference
through their team, people and dedicated professionals in order to deliver high quality products
and contribute in sustainable development.
Critically analysis of internal resources and capabilities that give Royal Dutch
Shell plc a competitive advantage
Competence framework
Threshold Resources
 Digital resources
 Global Presence
Threshold Capabilities
 Highly skilled employees
 Competitive training facilities
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Distinctive Resources
 Quality products and services
 Employees
 Software
Distinctive Capabilities
 Software
 High security measures
To evaluate company internal environment manager of Royal Dutch Shell PLC have
undertaken use of VRIO analysis:
Distinctive Resources
and Capabilities
(Core competences
(Examples)
V
Is it
valuable?
R
Is it rare
(unique)
I
Is it
inimitable?
(difficult to
imitate)
O
Does it support
the
organisational
structures,
systems,
efficiency,
culture etc
Implications on
competitive
advantage/strategy
(e.g sustainable,
temporary etc)
Global presence Yes Yes - - Competitive
Disadvantage
Quality product
offering
Yes Yes Yes Yes Competitive
advantage
Software Yes Yes Yes - Competitive
advantage for
temporary basis
Employees Yes Yes Yes Yes Competitive
advantage
Valuable: Competencies which is helpful for Royal Dutch Shell PLC to grab valuable
opportunity and analyse threat from the internal and external market is.
Global presence:
Royal Dutch Shell PLC is having global presence as this organisation is operating in
more than 70 countries. It indicates that organisation generate its competitiveness with global
presence in effective way.
Quality product offering:
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Royal Dutch Shell PLC provide high quality products to consumers that have been a
source of the brand a with consistent and high-quality increase Royal Dutch Shell PLC capability
to attract consumers to repeat purchase.
Software:
Royal Dutch Shell PLC take advantage of unique software in order to manage their
operations and activities to accomplish organisation goals.
Employees:
Company as having highly talented and skilled employees and also provide in-house
training for specific different job roles to employees, invest in training and development to have
a strong organisation workforce which is increasing company ability to overcome changes
(Enneking, 2019).
Rarity: Competencies which are unique in nature had developed and process by number of firms
in oil and gas industry (Benjamin and Seck, 2021). With the help of having some rare elements
Royal Dutch Shell PLC effectively build competitive edge in industry.
Global presence:
Royal Dutch Shell PLC is having global presence and operate in number of regions and
countries which allowed them to build and expand consumer base and enhance their ability to
earn revenue from multiple regions. This global presence provide company to have higher
financial strength which enhances its competitiveness.
Quality product offering:
Royal Dutch Shell PLC offer unique and high-quality products and services which is rare.
Software:
Software which company undertake to maintain records and execute operations is rare as
it is basically developed by organisation according to the requirement of particular market.
Employees:
Employees act as rare element for company as they enhance high scale of competence.
Along with this organisation invest in training and development programmes which helps in
enhancing employees’ capabilities.
Imitable:
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Software:
Royal Dutch Shell PLC take advantage of software according to the different market
needs which is hard to be copy by other individual if the expand their operations on multiple
platforms.
Employees:
Employees of company have highly talented and specialised skill in which company also
provide them additional training according to the different job roles and requirement which
cannot be copied by other competitors.
Quality product offering:
Royal Dutch Shell PLC provide high quality production services which comes under the
category of imitable. With the help of high-quality products which is internally known by the top
management of company, quality product offering ring of company is hard to be copied.
Organized: These sources are mainly developed by company in a unique manner and cannot be
utilised by competitive rivals in industry (Gaghman, 2020). These resources have no
substitutions and cannot be employed by other organisation which allow organisation to take use
of opportunity and take this resource is to build business growth and development.
Employees:
Royal Dutch Shell PLC provide in-house training to employees for different job roles and
job designs to build a professional and personal growth.
Quality product offering
Royal Dutch Shell PLC offer high quality products and services to consumers for which
they invest in research and development to evaluate market trends and consumer behaviour.
Along with this to enhance product quality company have multiple financial sources, take use of
mergers and acquisition and invest in human resources to develop a positive organisational
culture which is helpful in providing quality products and services to consumers.
Value Chain analysis
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Support Activities (Resources)
Firm infrastructure
Planning, strategic control, accounting, quality management, financing. With the help of efficient
infrastructure management, It is important for Royal Dutch Shell PLC maintain value chain effectiveness,
Human resource management
It is important for Royal Dutch Shell PLC to evaluate various HR elements like rewarding, performance
management, selecting, coaching. This will allow company to overcome the pressure with the help of
motivation, working team and commitment. The massive trust between Royal Dutch Shell PLC workers
enhances this value chain support activity.
Technology
It has been evaluated that all the value chain activities are dependent on efficient support of technology. The
human resource activity needs Royal Dutch Shell PLC to understand the importance of technology
development. A few examples are technology-supported customer service, data analyse and automation
software.
Procurement
Royal Dutch Shell PLC indeed offer high quality products and services to its customers in which they acquire
raw material range from machinery to material effectively. It this it is essential for the to carefully evaluate
procurement activities to operational and outbound value chain. This is inevitable as company offer unique
quality of products and services.
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Primary Activities (Capabilities)
Inbound logistics – raw
materials
Royal Dutch Shell PLC have
smart inbound logistic function
in which they use of cost
leadership management. Value
chain analysis also states that
respective company keeps of
upgrading security so to
enhance effectiveness of their
inbound logistic operations
(Kumar, 2019).
Operations/
Processes/
production
With the help
of taking use
of IT
department
Royal Dutch
Shell PLC
maintain
supply chain
management
and develop
high quality
offerings.
Outbound
logistics
(e.g
distribution
channels)
Royal Dutch
Shell PLC as
compared to
other rivals is
having strong
leadership in
online and
offline
segment.
Along with
this Royal
Dutch Shell
PLC with the
help of its
software
develop smart
domain
patterns which
helps them to
influence large
base of
consumer
attention.
Marketing
and sales
Royal Dutch
Shell PLC
offer loyalty
programs
facilities to
customers
with the help
of IT
department.
With the help
of this
company
retain
customers.
Customer service
Royal Dutch Shell
PLC keeps of
increasing consumer
service experience for
which with the help of
efficient IT
department and
system company
provide 24/7 service
assistance to
customers.
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SWOT analysis
STRENGTH WEAKNESSES
 Royal Dutch Shell PLC offers high
quality products and services to
customers.
 Company is having highly talented
and skilled employees.
 Less investment on digital marketing
compared to other rivals.
THREATS OPPORTUNITIES
 Dynamic changes in needs and
demand of customers.
 To enhance digital marketing and
invest in high-technology tools to
enhance competitiveness.
Identification and critically analysing the key drivers of Royal Dutch Shell plc
External factors to
consider
Factors effected
within industry
Importance to
organisation
Political: Policies of
government
Tax regulations
There are number of
elements and factors
in marketing in
political environment
which can affect an
impact upon Royal
Dutch Shell PLC
profitability for
longer period of time.
This company is
majorly operating its
High
High
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operation in gas and
oil industry in
number of countries
which enhances
political system risk
(Macchi and van
Zeben, 2021). Brexit
is the major political
factors which have a
higher impact upon
company business
operations and
increases level of
legal framework.
For this company is
required to emphasize
upon intellectual
property protection,
trade regulation and
tariff, implement new
antitrust laws, pricing
regulations wage
legislation extra in
order to avoid
systematic risk of
political environment.
In this with the help
of emphasizing upon
implementing
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different strategies
company can
overcome these
factors.
Economic: Economic growth
Changes in rate of
saving
Labour costs
Inflation rate
Due to Brexit, there
is a major economic
change in in United
Kingdom in which
there is significant
changes in foreign
exchange rates,
saving rate, inflation
rate, interest rate and
economic cycle
which is affecting
Royal Dutch Shell
PLC business
operations.
According to the
prevailing economic
factors in external
environment. It is
essential for company
to use United
Kingdom consumer
spending, industry
growth rate and other
High
Medium
High
Medium
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factors to conduct
operations
effectively.
Organisation with the
help of taking
advantage of
government
subsidies, higher
economic growth rate
can recover from the
economic losses due
to Brexit and can
enhance their growth
rate.
Social: Changes in consumer
needs and preferences
Lifestyle
Consumer buying
habit
Social culture and
manner community
have skilled level of
population education
level have direct
impact upon
organisation. Attitude
and shared believe of
population is having
direct impact upon
company in which
they require to
modify their
strategies (Oom,
2020). United
High
Medium
High
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