MGMT20144 - INPEX Business Analysis: Structure, Environment, Risks

This essay provides a comprehensive strategic analysis of INPEX, a leading global oil and gas producer. It begins with an introduction to the company's vision and organizational structure, highlighting its functional nature and global presence. The analysis includes a SWOT analysis, examining Inpex's s...Read More

Running head: STRATEGIC ANALYSIS OF INPEX
STRATEGIC ANALYSIS OF INPEX
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Author Note

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STRATEGIC ANALYSIS OF INPEX
Introduction
Inpex Global is a dynamic and determined part of the Inpex Corporation which is a
leading and independent global producer and explorer of gas and global oil. The organization
is a part of the business community in many countries of the world for greater than 30 years.
Inpex has been able to deliver economic benefits and local jobs in the regions like, Japan,
Indonesia, Eurasia. The headquarter of the organization is located in Perth and it has its
offices in Darwin, Broome, Northern Territory and Kimberly (Inpex.co.jp. 2018). The
portfolio of Inpex Corporation include its flagship project named, Ichthys LNG Project. The
vision of the organization is mainly to become the top international gas and oil corporation in
the industry. Natural gas is the core of business and Inpex has the aim to grow inti the
integrated energy related organization with the help of its contribution to the stable supply of
energy (Inpex.co.jp. 2018).
Organizational Structure of Inpex
The organizational structure of Inpex Oil and Gas is functional in nature. The efficient
team of the organization works under the CEO of the organization. The directors of the
organization work directly under the CEO and the managers of the various departments
operate under the directors. The operating personnel further operate under the managers of
the various departments of the company (Anifowose et al., 2016). Inpex Oil and Gas employs
more than 3000 employees on a global basis. The various managers are responsible for the
operations in different countries. The company has a technical team which is knowledgeable
and efficient in nature. The relationships between the managers and the employees have been
the major factors which have affected the operations of Inpex (Badiru & Osisanya, 2016).

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Internal analysis of Inpex based on SWOT
Strengths – The project portfolio of the organization is diversified in nature which
helps it gaining high dividends and further get a competitive advantage in the industry. The
operational efficiencies of the organization have been able to provide them with huge levels
of operational profits. The strong focus of the organization on research and development have
provided it with a technical edge over the other companies (Bansal & DesJardine, 2014). The
revenues and the net profits of the organization have always been high. The employee base of
the organization is more tham 3000 and it has its operations in almost five countries.
Weaknesses – The decline in the production of natural gas has led t huge losses for
the organization and the revenues have also decreased. The growth that has occurred in the
usage of renewable resources have also caused losses to the revenues of Inpex. The non-
conventional sources of energy are being promoted on a large scale, which are able to affect
the revenues of the organization (Bjerga & Aven, 2015).
Opportunities – The expansion related initiatives that are takedn by the organization
has given it a wider reach and increased its potential as well. The growth that is experienced
in the demand for global energy has been able to provide the profits to the company. The
medium and the long-term business related strategies of the organization have been able to
generate profits to the organization. This has also strengthened its position in the market
(Cavusgil et al., 2014).
Threats – The competition that is faced by Inpex in the oil and gas industry is also
quite high. There are other organizations in the market which have greater amounts of
financial resources, geographical reach and credit access. The operations of the organizations

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in this sector is based on the federal and the state governments of the countries where they
operate (DaSilva & Trkman, 2014). The fluctuations that take place in the prices of gas and
oil in the countries can also impact the operations of this organization in an adverse manner.
The natural disasters can also cause huge losses to the revenues of Inpex (Ferreira et al.,
2014).
External analysis of Inpex based on PESTLE
Political factors – The business environment in Australia is safe and stable for the
operations of any type of organization. The political environment of the country is stable and
is welcoming for the operations of business organizations belonging to any sector. The oil
and gas sector of Australia has shown booming growth and gas further affected the operations
of organizations like Inpex in a positive manner (Ford, Steen & Verreynne, 2014). The
country has a growing economy and stable political environment for business. The country
also consists of educated, skilled and multi-lingual population.
Economic factors – The prices of the properties are higher in Australia as compared to
the levels of income. The population of the country is growing and incomes are rising further.
The growth rate of the Australian economy is also quite high and the GDP of the country is
higher as compared to that of UK. The unemployment rates in the country is also low. This
stable economy of the country has helped in the further if growth of Inpex (Frank et al.,
2016).
Social factors – The changes that have occurred in the social trends of Australia have
affected the revenues of Inpex. The society of the country is divided by three class4esw
which include, the working class, the middle class and the upper class. The rise in the people
belonging to working class have further increased the growth rates of the organization in
Australia (Klettner, Clarke & Boersma, 2014).

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STRATEGIC ANALYSIS OF INPEX
Technological factors – The technological factors of the countries mainly help in the
reduction of costs related to the various operations. The technological industry of Australia is
however facing major issues that are created due to the tensions that have occurred between
the researchers and the government. This issue can affect the revenues of Inpex in Australia
as the company has to spend more in its operations (Kolk, 2016).
Environmental factors – The increasing number of or industries in Australia have
proved to be a significant issue related to the climate change that has occurred in the country.
The government has therefore started taking major steps so that the levels of pollution in the
country can be reduced in an effective manner. Inpex has to take care and follow the various
environmental restrictions that have been placed by the government of Australia related to the
operations of various organizations in the country (Lechner & Gudmundsson, 2014).
Legal factors – The legal factors that are related to a country affect the costs of the
firm and the wages that it provides to the employees of various levels. The Australian
government maintains the sanctions and laws that are related to the United Nations Security
Council which requires the individuals and the organizations to comply with certain specific
laws (Ledezma et al., 2015). The multinational organizations like Inpex further need to
analyse these compliance laws before they enter the market.
Risks that are faced by Inpex
The risks that are associate with the business operations of Inpex are, the risks that are
related to the failure of the exploration, production and the development process of the
organization. The risks that are related to the changes that can take place in the reserves of the
company. The high intensity of capital investment that is involved in the period between the
exploration to the sales of the products that are offered by the organization (Rugman &

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Verbeke, 2017). The funds that are invested by the organization cannot be recovered for a
long time and this acts as a major risk to the other business operations of Inpex.
The partnerships that are formed by the organization as an attempt to reduce or
mitigate the risks can also be a major risk for the operations of
Inpex. The joint ventures that are made by the organizations like Inpex can act as a risk to the
business operations as the decision-making process becomes complex and involves the
partners of the company (Sadaghiani et al., 2015). The operational accidents that can occur
during the production process is a major risk to the successful and effective operations of the
company.
The business practices decisions to be made by Inpex to enhance its performance
The risks that are faced by Inpex in the business environment can be mitigated to
some extent as the majority of these risks are not completely under the control of the
organization itself. The organization can however increase the investment that it makes in the
production process so that the speed can be increased and the time is reduced (Schaltegger et
al., 2016). This will help in decreasing the risks that are related to the blockage of funds in
the process. The company needs to implement high level security and safety equipments in
the various facilities so that the operational risks and the accidents can also be reduced
(Shukla & Karki, 2016).
The important functions of the business will help Inpex to achieve its strategy
The highly efficient and skilled team of the organization can help Inpex in achieving
its objectives faster. The organization has received the highest rank in the industry of global
energy suppliers. The activities of Inpex in Australia are mainly related to the ways by which
it can achieve its vision. The employees of the organization are skilled and capable and they

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contribute to the success of Inpex in its global operations (Spender, 2014). The production
and operations department of the organization is also highly dynamic which has assisted the
organization to successfully set up its business in Australia.

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