Research Proposal: Petrotrin Business Environment Analysis Report

This report presents a research proposal analyzing Petrotrin's business environment following the closure of its oil refinery. It begins with a statement of the problem, highlighting issues like mismanagement, financial performance, and fluctuating market prices, which led to the company's restructuring. The research aims to identify external and internal risk factors, evaluate leadership and strategic objectives, explore new opportunities, and determine solutions for the company's challenges. The report includes a PESTLE analysis, examining political, economic, social, technological, legal, and environmental factors impacting Petrotrin. It identifies key opportunities and threats within the external environment. The report also analyzes Petrotrin's competitors, both direct and indirect, and discusses barriers to entry. Finally, it examines the company's customers, including their behavior and decision-making processes, considering factors like price, supply stability, and the theory of reasoned action. The report concludes with a list of references used in the analysis.

Running head: RESEARCH PROPOSAL
Research Proposal
Name of the Student:
Name of the University:
Author note:

1RESEARCH PROPOSAL
STATEMENT OF PROBLEM
After conducting an investigation into Petrotrin’s oil refinery operations, the following problems
have been discovered:
 Mismanagement practices
 Poor Financial performance
 Over-Staffing
 Powerful Union
 Extreme fluctuating market prices
 Technological challenges
 Low Productivity
 Aging Infrastructure
 Environmental and Ethical Issues
These negative factors have led the government to close operations and terminate 1,700
employees in an effort to restructure and redesign its exploration and production business.
OBJECTIVES OF THE RESEARCH
This paper is aimed at helping the company in the long-term become a viable, sustainable and
profitable entity which will enhance the standard of living in Trinidad. The specific objectives to
be achieved by this initiative include:
 Identify key external and internal risk factors associated with the sustainability of the
company
 Critically evaluate the company’s leadership and strategic objectives
 Explore the possibilities of new and emerging opportunities
 Determine solutions and strategies that can solve the current problems the company faces

2RESEARCH PROPOSAL
ELEMENTS OF THE EXTERNAL BUSINESS ENVIRONMENT
Introduction
As we review the macro environment in which Petrotrin operates in, conducting a PESTLE
analysis is a strategic tool used for industry analysis and business strategy. This section will also
look at other situational factors such as the company’s competitors and customers to determine
its impact on the company.
1. PESTLE Analysis
A PESTLE analysis, sometimes referred to as a PEST analysis, consider matters related to
Political, Economic, Social, Technological, Legal and Environmental factors. (Gupta, 2013)
Research study emphasizes that a PEST analysis is a critical component for strategic
management and allows organizations to understand pertinent external factors in determining
market growth or decline and as such provides an outlook for the future.
Political-
 It is a republic country, with parliamentary democracy system based on the UK systems.
 Political stability persists since 1962, when the country gained independence. There is no
such incidence of political violence, except in 1990, caused by an Islamist group that
attacked the parliament to take over the government (gov.uk, 2018).
Economic-
 It is the most industrialised country among the English speaking nations in the Caribbean
Islands and second wealthiest in terms of GDP and GDP per capita among the Caribbean
(Brereton, Robinson & Watts, 2018)
 The economy is based on oil and natural gas reserves and it is 6th largest exporter of
liquid gas (gov.uk, 2018)
 It has open market driven economy, promoting FDI, trade liberalisation and public sector
reform.

3RESEARCH PROPOSAL
Social-
 The society comprises of two ethnicities: the native black descendents of the slaves, and
the Indo-Trinidadians, or East Indians, whose ancestors were mainly migrated labourers
(Brereton, Robinson & Watts, 2018).
 There is poor work ethics, high corruption, laid back attitude, crime and security issues in
the society, gender based violence and high level of domestic violence creating problems
for business (gov.uk, 2018).
Technological-
 Being an economically developed country, Trinidad and Tobago has an advanced
technological environment, that supports the ICT and the exploration and production of
oil and natural gas industry.
 Internet governance has been implemented to have a better control on the nation (gov.uk,
2018)
 Cyber security issues are a concern
Legal-
 Path to justice is slow (gov.uk, 2018)
 Government regulations are favourable to business but it inefficient to reduce the social
crimes
Environmental-
 Exploration of crude oil is itself a damage to the environment, however, it uses
sustainable techniques to reduce the impact.
 Supports many environmental projects as part of CSR (Petrotrin.com, 2018).
Opportunities: political stability, developed economy and advanced technology
Threats: social crimes and corruption, cyber crime and inefficient legal system
2. COMPETITION
Direct competitors: National Gas Company of Trinidad and Tobago Limited, National Energy
Corporation, The Trinidad & Tobago National Petroleum Marketing Company Limited and The
Trinidad & Tobago National Petroleum Marketing Company Limited (energy.gov.tt., 2018)
Indirect competitors: various auxiliary service companies and domestic liquid gas companies

4RESEARCH PROPOSAL
The cost of establishment or set up cost, economies of scale, supply of technology and
equipment; and environment and legal regulation compliance cost are the existing barriers to
entry for a new competitor.
Due to the barriers, especially the high set up cost, it can be expected that no new small
scale competitor will enter the market immediately. However, a large scale, domestic or
multinational Oil and Gas Company, can enter the market, if it gets backing from the Trinidad
and Tobago government.
3. CUSTOMERS
The customer profile for Petrotrin consists of both the public and private large scale
industries as well as the foreign governments. It is 6th largest liquid gas exporter to other
neighbouring countries (gov.uk, 2018).
All types of private and public industries require oil and gas for production, especially the
transport industry. These customers purchase oil from oil and gas companies, like, Petrotrin
when the oil price is lower than its competitors, exchange rate is favourable or the supply is
guaranteed and constant. However, if production falls, oil price increases, and the supply gets
crippled, resulting in uncertain supply, as in case of Petrotrin. Thus, following the theory of
reasoned action, the large scale customers will move away from producers that cannot guarantee
a stable supply or asks for a higher price (Montano & Kasprzyk, 2015).

5RESEARCH PROPOSAL
References
Brereton, B. M., Robinson, A. N. R. & Watts, D. (2018). Trinidad and Tobago. Encyclopaedia
Britannica. and Retrieved from https://www.britannica.com/place/Trinidad-and-
Tobago#ref275756
energy.gov.tt. (2018). Ministry of Energy and Energy Industries. Retrieved from
http://www.energy.gov.tt/for-investors/companies/
gov.uk. (2018). Overseas Business Risk – Trinidad & Tobago. Retrieved from
https://www.gov.uk/government/publications/overseas-business-risk-trinidad-tobago/
overseas-business-risk-trinidad-tobago
Montano, D. E., & Kasprzyk, D. (2015). Theory of reasoned action, theory of planned behavior,
and the integrated behavioral model. Health behavior: Theory, research and practice, 95-
124.
Petrotrin.com. (2018). Petrotrin - Key Statistics. Retrieved from
https://www.petrotrin.com/en/About%20Us/Key%20Statistics.aspx