International Marketing and Management Plan for PETRONAS Chemicals

This report provides a comprehensive international marketing and management analysis of PETRONAS, focusing on its potential entry into the South African market. It begins with an executive summary and an introduction highlighting the importance of international marketing planning. The discussion section includes an overview of PETRONAS, a SWOT analysis evaluating its strengths, weaknesses, opportunities, and threats, and PEST analysis examining political, economic, social, and technological factors. Furthermore, the report utilizes Porter's Five Forces and the Ansoff Matrix to assess the competitive landscape and growth strategies. The paper concludes with recommendations for PETRONAS's market entry into South Africa and discusses the strategic implications of entering the market.

Running head: INTERNATIONAL MARKETING AND MANAGEMENT
International Marketing and Management
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INTERNATIONAL MARKETING AND MANAGEMENT
Executive Summary
The paper intends to highlight the importance of international marketing and management
planning of PETRONAS in South Africa. Effective Marketing and management strategies
which can be employed by PETRONAS Chemicals in order to enter the market in the specific
country have been discussed. Analyzing the market according to the industry type, demography,
economic growth in the specific country help in making progress with requirements and
execution. In the international context, the market scenario change in varying conditions, from
that of the host country and it often tends to get difficult for companies to adapt to such market
conditions and demands. However, it has been discussed how International Marketing and
Management can help an organization in coping up with situations which are unfavorable and
can lead to detrimental outcomes. International Marketing planning can help PETRONAS to
avoid sucat the same time expand the business.

INTERNATIONAL MARKETING AND MANAGEMENT
Table of Contents
Executive Summary.........................................................................................................................1
Introduction......................................................................................................................................3
Discussion........................................................................................................................................4
Overview of the Company...........................................................................................................4
SWOT Analysis of PETRONAS.................................................................................................6
Pest Analysis................................................................................................................................9
Porter’s Five Forces...................................................................................................................13
Ansoff Matrix............................................................................................................................15
Recommendations..........................................................................................................................17
Conclusion.....................................................................................................................................18
Reference List and Bibliography...................................................................................................19

INTERNATIONAL MARKETING AND MANAGEMENT
Introduction
The opportunities for trade commerce and communication are increasing every day. In
the global context, business expansion and trade between countries have increased to great
extent. Rapid technological advancements and marketing concepts have improved prospects of
business globally. The companies develop strategic planning methods to make the customers
interested and create value for their products which are offered in the market. The strategies are
also used in planning communication, sales and development plans for the business. Planning
strategies and future course of action in order to enhance the affectivity of the company helps in
generating more revenue collection and profit. Any organization which intends to assess internal
and external factors which govern its business conditions in the international market. Every
company needs to evaluate its strengths and weaknesses in order to approach the market and
therefore also attain the desired results. Marketing Planning helps to address the factors which
effect company policies and market scenario.
PETRONAS Chemicals is a company which does its trade mostly related to petroleum
products. The company runs its business across 35 countries and has revenue turnover of
$100.744 billion. It also has subsidiary associations with 19 countries. It is recognized as a
trusted and valued partner for oil and gas products. It is flourishing as a company as it is being
able to meet the demands of the growing industry and market worldwide. The organization has
successfully established itself as one of the companies with the highest of profit in the Asian
continent which is well committed to the development of its core business and focusing on
exporting Malaysian product into another countries. Thus, it also makes upstream investment in
countries which is a key strategy in marketing. It has several joint business ventures with partner

INTERNATIONAL MARKETING AND MANAGEMENT
companies overseas and rapidly became a company with oil exploration globally and currently.
In this paper we would discuss about the need for developing International Marketing plan and
the areas which require evaluation and focus before entering the South African Market.
Discussion
Overview of the Company
PETRONAS Chemicals is one of the leading producers of chemicals, lubricants and
petroleum products in Malaysia. It is one of the largest groups in the South Asian Continent. The
company operates in several world class sites for production. The company, which works for the
government in Malaysia, has the responsibility of adding value to the oil and gas resources
(Hapsari, Stoffers and Gunawan 2017). It is listed among the 500 largest corporations in the
world. It also featured as the most profitable company in the World, whereas the 8th in Asia. The
company has engaged in several activities which involve petroleum trade and operations.
Logo of PETRONAS
(Source: Petronas.com 2019)
The spectrum of activities which the company take part in, include, oil refining, upstream
exploration, distribution, marketing, liquefaction, automotive engineering, petrochemical
manufacturing. It also coordinates downstream operation globally in order to optimize deliver

INTERNATIONAL MARKETING AND MANAGEMENT
and market products to customers. These operations which PETRONAS engage in, also include
trading operations such as property investments, shipping and automotive engineering
(Schniederjans, Schniederjans and Schniederjans 2015). It has an organizational structure which
is centrally functional. The Vice President and Executive Vice President monitor and regulate
performances of the employees. The operations which the organization engage in overseas, are
also controlled by these people alongside partner company operations and joint ventures.
Upstream Exploration of PETRONAS
(Source: Petronas.com 2019)

INTERNATIONAL MARKETING AND MANAGEMENT
Downstream Exploration of PETRONAS
(Source: Petronas.com 2019)
SWOT Analysis of PETRONAS
This helps to analyze how the company is among the top three exporters in the LNG
market. Acquisition of the stake that PETRONAS have adds to its strengths and provides it an
upper hand in the LNG market across the globe. The analysis of the internal factors provide idea
about its strategic management and organizational structure.
 Strengths
PETRONAS is one of the leading brands in the world in the International Market. It is one of
the names which is also found in the Auto Racing Events in the World. The company always
tries to push its own limits by bringing concrete changes by advancing their capabilities.

INTERNATIONAL MARKETING AND MANAGEMENT
PETRONAS develops newer research initiatives top sustain the changing scenario of the market
globally. The company has 570 kbpd of capacity in each of the three refineries it owns. It also
has 11 blending plants of each having capacity of 61500 mtpa and petrochemical manufacturing
plants. The complexes which the company owns are fully integrated comprising of million mtpa.
The company, while expanding in South Africa should focus on Agrochemicals and Industrial
Solvents keeping in mind that the country is a manufacturing hub with a diversified economy.
The country’s economy is primarily based on Mining, Agriculture and Manufacturing which can
be catered to, by PETRONAS (Varadarajan 2017). PETRONAS should try to ensure that the
business becomes sustainable whereas, the limited resources are not exploited for its business.
This aspect can be looked after while aiming to promote and sell these products in South Africa.
 Weaknesses
The weaknesses which can act as drawbacks for the company include incidents of fatal
accidents which took place at various sites of the company. These mishaps often leave disastrous
effect on the companies as major loss of resources take place. The consequences which follow
after such incidents involve loss and reduction of resources (Song et al. 2018). The investments
made by PETRONAS in two big projects which can be risky in future due to oil crisis. These
investments include a project in Johor, Pangerang, RM60bil- Refinery and Petrochemicals
Integrated Development and another which amounts to US$36 billion, in Canada, RM137bil
PETRONAS-led Pacific Northwest LNG Project (Leonidou et al. 2015). The company has also
been part of unfortunate controversies which include oil spillage, poor conditions of work in the
company for the employees to which they need to pay great attention and avoid recurrence. The
regulation which the South African government poses on oil and gas sector might pose immense

INTERNATIONAL MARKETING AND MANAGEMENT
restriction on the company and their subsequent business interests. These stringent regulatory
laws can add further liabilities on their operation in a new market which they intend to enter.
 Opportunities
The company is trying to explore and discover the lesser utilized ways of conducting
their business by moving into domains which include Acoustic Sensing, Geo-Imaging, 3D VSP
and so on. PETRONAS have developed some strong designs and therefore advanced their
research technologies and areas by focusing on alternate projects which include other energy
generation options such as Wind and Tidal power. PETRONAS have also developed strategic
partnership with racing technologies and high end Automotive brand such as MERCEDES a
FORMULA ONE. This adds edge to their business strategies and allow them to make further
process in the racing technologies (Boyd et al. 2017). There are great opportunities due to the
increasing breach between demand and supply of energy while they also have rich access to the
resources in South Africa. These resources can be utilized to meet the demand of Petroleum
based products such as Agrochemicals and Industry Solvents in South Africa.
 Threats
Every company needs to curtail their detrimental growth of business to reduce threats and
risks. The main threats which can pose limitations to PETRONAS include competition from
Chevron Corporation, Shell, Royal Dutch Shell and British Petroleum in the international
market. Therefore, the company must keep a check on the environmental growth of the company
and assess it in terms of competitions and threats in the market (Samiee, Chabowski and Hult
2015). High regulatory control from government can also operate as threats to the company and
its policies.

INTERNATIONAL MARKETING AND MANAGEMENT
Strength
 Top facilities in the oil and gas
industry.
 Ownership and diversified supply
chain.
 Future Prospects.
 New Research initiatives.
Weakness
 Accidents leading to great losses.
 Selling off of assets.
 Effects on the environment.
Opportunity
 Increase in demand for natural gas and
oil
 Increase in prices of crude oil.
 Diversifying and entering newer
domains of business
 Partnerships and expansion in the
Automotive industry
Threats
 The increase of energy exporter in
South Africa where PETRONAS
might expand their market base.
 Decrease in natural resources.
 Exit operations in many places due to
crisis in the area.
 Regulatory control of Government on
oil and gas resources.
Pest Analysis
This analysis of the company will help us understand the external factors which might
affect the company and its operations in the gas and oil industry in South Africa. These elements
must be taken into account to understand the market and environment in the area or country of
operation and expansion. The Political, Economic, Social and Technological environment affect
companies and their operation and regulate the upstream and downstream movement of the

INTERNATIONAL MARKETING AND MANAGEMENT
company (Parnell, Acikdilli and Doyle 2017). The company has gained the trust of Malaysian
government and have been given the responsibility to undertake responsibilities pertaining to the
oil and gas market.
 Political Factors
The political factors in the market which can affect the market of the oil and gas industry
comprise of the decisions and influences which operate within a region or country, politically.
Most of the government across the globe control and regulate maximum of the oil and gas
production happening (Leonidou et al. 2018). Therefore the government of South Africa also
controls most of its oil reserves and the operation of National Oil Companies. There are geo-
political conflicts within a country which manipulate operations and often create serious
problems. Political instability in a South Africa can also have detrimental effect on PETRONAS
and its operations. Therefore, these factors can pose limitations to PETRONAS in its operation in
the country.
 Economic Factors
The relationship between global petroleum industry and economy is very significant and
heavily impact the operation, growth and consumption of oil and gas. The growth of economy
drive the consumption of gas and oil globally. The price of oil and gas commodity is directly
linked to the economy of South Africa as well. Global economic crisis is a growing issue and it
directly effects the operation and commerce of the industry (Demangeot, Broderick and Craig
2015). PETRONAS should regulate and strike a balance with it to not face great losses in South
Africa as it’s a new expansion. Selling products like Agrochemicals and Industrial solvents in a

INTERNATIONAL MARKETING AND MANAGEMENT
country where the economic development is linked to manufacturing and agriculture can be
effective as the banking sector is attributed as the positive feature of the country’s economy.
 Social Factors
Social issues like migration, religion, income, demography, and ideological views cause
great impact on companies. There are other trends and issues which impact the oil and gas
industry to. These include the growing awareness of people on environmental changes. The
focus is shifting towards more environment friendly fuels. A country which has a great
agriculture sector can be addressed by selling Agrochemicals as there is a great need for the same
in South Africa (Bıçakcıoğlu, Theoharakis and Tanyeri 2019). It also raises concerns about the
profits and security which are linked to extraction of gas and oil resources. These reduce in
protection and stability are caused due to exploitation of the natural resources. They are of great
concern as they are linked to the global warming and great climate changes. South Africa is rich
in diversity, demography and geographical riches which is of possession to the world.
 Technological Factors
There are many technological innovations in the market which, if not addressed, pose
drawbacks and operate as barriers in the industry for oil and gas companies like PETRONAS.
High potential technologies and crossover can affect the gas and oil industry. Shortage in skills
can reduce efficiency of the company in South Africa as there is already a great shortage of
skilled workers in South Africa who are unable to handle and accustom to the technological
advancements (Kienzler and Kowalkowski 2017). Enhanced oil recovery must be paid attention
to, in order to cope up and be at par with the companies embracing technological innovation and
advancements in South Africa. The future of the oil and gas industry will certainly get affected