Marketing Audit Report: Royal Dutch Shell PLC (UK Petrol Stations)

This report presents a comprehensive marketing audit of Royal Dutch Shell PLC, focusing on its operations within the UK oil and gas industry. The analysis begins with an overview of the company and its industry, followed by a detailed examination of the external environment using PESTEL analysis, and an internal assessment of the company's strategies, functions, and productivity. The report explores the market, customers, and competitors, including a Porter's Five Forces analysis and competitor perceptual mapping to understand the competitive landscape. A TOWS matrix is employed to identify the strengths, weaknesses, opportunities, and threats facing Shell, leading to the identification of key strategic challenges. The audit concludes with recommendations for Shell to enhance its market position. The report utilizes secondary market research and includes a references section.

Running head: MARKETING AUDIT
MARKETING AUDIT
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Summary
The purpose of this report is to analyze Royal Dutch Shell PLC which operates in oil and gas
industry in UK. The company is well reputed and has a global presence. The report introduces to
the company and the industry in which it operates. It determines the external and internal
environmental analysis. It provides detailed description of the markets, customers, and
competitors with the help of porters five force analysis. It identifies the position of the brand
with the help of competitor perceptual map. It analyzes the internal environment, the strategies,
functions, and productivity of the business organization. Further, it identifies the strengths,
weakness, opportunity, and threats of the company. Lastly, the report sums up the main points
and concludes the report.

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1.0 Introduction
Royal Dutch Shell Plc operates within the oil and gas industry sector. The business
organizations involve themselves by exploration and production as well as supplying different
range of petroleum products. The operating subsidiaries of the business organizations are
managed by shell international (Shell.com. 2020). They are divided into several divisions
including exploration/production, oil products, gas, and power, chemicals. Other divisions
include Coal, Hydrogen, renewable and forestry. The mission and vision of the business
organization is to safety market and distribute its petrochemical products along with value added
services. The company operates in a highly competitive business environment, and faces direct
competition with Chevron, BP, Exxon Mobil, and ConocoPhillips (Shell.com. 2020).
2.0 Macro Analysis
3.0 PEEST
Social - In today’s business environment, consumers are more aware of conscious consumption
focusing on safety and career attributes. The consumers are obligating the oil companies like
shell to incorporate responsible consumption. Therefore, Shell is in increased social pressure on
the companies to engage in responsible consumption (Rastogi, N.I.T.A.N.K. and Trivedi 2016).
However, the business organization responds the social issue by rigorous advertising and
promoting the brand name. Shell advertises the brand as a highly responsible producer of oil
products and services.

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Environment - These factors includes the climatic factors which might influence the operations
and decisions in the business organization. Research suggests that the level of carbon emission is
high from manufacturing crude oil and fuel (SHTAL et al. 2018). Shell has been ranked as one
of the most carbon intensive manufacturing units in the world. Hence, the business organization
continued to invest in new reserves. There is an increasing trend of electric cars and battery cars
which threatens the profitability of the business organization.
4.0 Micro Analysis
Markets - The business organization invests in advanced machinery for the purpose of drilling
and extraction of gas and oil industry. The business organization also heavily invests in research
and development opportunities (Bohi 2017). Further, Shell focuses on unconventional reserve of
oil and gas; this benefits the business organization to great extent. Moreover, the company
engages itself in forming strategic alliance which is highly beneficial for the business
organizations. Shell’s partnership with Cosan (S.A) company has enables the business
organization to reduce its expenditure and expand its business in ethanol market (Ng and Donker
2013). However, the brand is most preferred as compared to other competitors in the UK market.
The company mainly focuses on recruiting talented and skilled employees, who has the
capability to innovate its products and services. The company provides various monetary and
non monetary incentives to the employees and the workers to motivate the employees (Ahmad et
al. 2016). However, it has been indentified that the company has limited investment in biofuels
and it is considered to be most crucial for the business organization as bio fuels are rapidly

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increasing in demand. Shell must also focus on numerous health and safety problems and
challenges
Customers: Shell has a diverse portfolio and expertise in gas. The company provides value
added services to large and energy intensive companies, energy asset investors, various
production companies, storage and transport powers, commodity trading business organizations
and other storage and transport providers (Ng and Donker 2013). There are mainly two variables
to segment its customers in the market including personality and benefit. Shell targets the set of
consumers have similar needs and preferences.
Competitors
Porter’s 5 force Analysis
Bargaining Power of Suppliers - It has been identified that oil and gas industry purchases their
raw materials from various suppliers. The suppliers of the business organization are in a position
which can decrease profit margin of Royal Dutch Shell Plc in the market (Dobbs 2014).
However, the company has a vertical integration strategy of shell, the bargaining power of the
suppliers are low. Royal Dutch Shell Plc implements various negotiating power to extract high
price from the consumers and the firms in the oil and gas industry (Abdelrehim, Maltby and
Toms 2015). The business organization has the power and the capability to merge and form
alliance with other companies in the oil and gas industry.

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Threat of New Entrant - The threat of new entrance in the market is low. It requires heavy
investment and capital for setting up a new business in the oil and gas industry. It requires many
years of experience in this particular fields (Hennchen 2015).. Further, it takes time and effort to
acquire new employees and skilled labors in the market. The presence of top players in the
market such as Shell, BP and other competitors, dissuades new entrance in the market. However,
the new entrance in the markets has the power to offer more innovative products and services at
a lower price. This might put the company on pressure (Pan 2013). Shell has to manage the
challenges and build effective barriers in order to protect its competitive edge.
Competitor Perceptual Map
BP has a strong forward and background integration. BP is one of the strongest
competitors of Shell. There is every stage from field to sales, just like shell. The company has
nearly 18,000 retail stores throughout the country (Mohanraj, Siddique and Ramesh 2014). The
company has its share in around 11,000 service stations in UK. Furthermore, the company had
17 petrochemical manufacturing facilities in the entire globe. The company has seasonal
financing; the company has primary listing on London Stock Exchange (Mohanraj, Siddique and
Ramesh 2014). The company also faces stiff competition from ExxonMobil, forward and
background integration. The company controls all stages starting from manufacturing to
marketing. The company has more than 11,000 service stations and various divisions including
Exxon, Esso, XTO and Mobil. The company is considered to be the biggest public company as
per Forbes. However, by revenue that company is the top most earning company as compared to
other competitors (Pan 2013).

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5.0 Internal Analysis
Strategy review - The Company successfully mobilizes its financial capability, its knowledge,
and experience. It enables the business organization to provided services to the community and
gain higher profit margins (Provasnek et al. 2017). The business organization leverages advanced
technology along with innovating employees to provides unique products and services. Shell
implements a ‘blue ocean strategy’ to excel in the market in which it operates. The company
strategically minimizes its impact on the fuels and offers eco-friendly and state sanctioned bio-
fuels (Channon and Jalland 2016). This can enhance the reputation and brand image of the
business organizations. The strategies of the business organization are effective enough to
position themselves in the industry.
Functions review: Royal Dutch Shell business organization has single tier board directors. The
management is led by chief executive officers while on the other hand; the non executive
directors’ manages different departments in the organization. They oversee the manufacturing,
retail, commercial and global departments of the business organization (West, Ford and Ibrahim
2015). The managers of the organization oversees the major functions of the business
organization including Liquefied Natural gas (LNG), gas-to-liquids (GTL), integrated gas
ventures management, gas and energy marketing and new energies (West, Ford and Ibrahim
2015). The company provides high quality products and services, which is the biggest strength of
the company.

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Productivity review - As per the CBBE model, the company is the most recognizable brands in
the world. This might boost the reputation of the company. The logo of the business organization
is familiar and recognizable in the entire globe (Yusuf et al. 2014). The business organization
offers high quality, differentiated products, and services. The products are highly reliable and
innovative (Shuen, Feiler and Teece 2014). The company has loyal customers with high net
promoter score.

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6.0 TOWS and Strategic Analysis
TOWS Analysis

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Strengths Weakness
Opportunities Shell can leverage the
experience, knowledge and
its financial power to meet
the increasing demands of
the markets (Yusuf et al.
2014).. The company can
take opportunity of new and
fresh talent along with
advancement of technology
to discover even more eco-
friendly bio-fuels for the
future (Yusuf et al. 2014)..
By implementing advanced
technology, the business
organization can explore
new resources and gain
market shares.
It has been identified that
the company has limited
focus on bio-fuels, which is
an increasing trend in the
industry. Shell can leverage
innovative technologies,
advanced machineries, and
invest in new renewable
sources and bio-fuels (Pan
2013).. This can eliminate
the concerns of
environmental pollution and
ensure innovative solutions
to meet the needs and
demands of the consumers.
Threats The business organization
can leverage new and
innovative technologies and
new talents to discover
The company can adapt to
the environmental
regulations and the
increased concerns of the

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more eco-friendly and state
sanctioned alternatives
(Ahmad et al. 2016). The
company can focus on
controlling costs, delivery
time, and quality to
overcome uncertainty in oil
and gas prices.
consumers by offering eco-
friendly alternatives
(Mohanraj, Siddique and
Ramesh 2014). It needs to
comply with the rules and
regulations of the
government and gain
reputation and brand image.

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Strategic Analysis
Key strategic challenges faced by Shell
Product ranges – The Company focuses less on the bio-fuel products and focuses more on oil
and other gas products. This can affect the business organization in the long run as the consumer
preferences are changes due to increase in environmental harms (Mohanraj, Siddique and
Ramesh 2014).
Quality and creativity- The Company focuses on differentiating its products in terms of price and
quality. However, the company must also focus on increased the range of product.
Brand awareness- The business organization must also focus on its marketing strategies such as
advertising and promoting to engage themselves with the public (Baaziz and Quoniam 2014).