Report: Global Business Environment Analysis of the Shell Company

This report provides an analysis of the global business environment of the Shell company. It begins with an introduction to the concept of the global business environment and then provides background information on Shell, including its founding, headquarters, and global operations across various countries. The main body of the report focuses on the external environment, identifying problems and challenges faced by the company. The report utilizes a PESTEL analysis to examine the political, economic, social, technological, environmental, and legal factors influencing Shell's operations. The PESTEL analysis highlights both opportunities and threats associated with each factor. The report concludes by summarizing key findings and suggesting strategic approaches for Shell to navigate these external factors effectively. References to books, journals, and online sources used for the analysis are provided at the end of the report.

Global Business Environment

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Company Background.................................................................................................................1
External Environment..................................................................................................................1
PESTEL Analysis........................................................................................................................2
CONCLUSION................................................................................................................................2
REFERENCES................................................................................................................................3

INTRODUCTION
Global business environment refers the environment where companies from different
countries runs their business operations at the international level. This environment gives
opportunities to the companies for achieving large market share in all around the world.
MAIN BODY
Company Background
Shell company is commonly known as Royal Dutch Shell (Public limited company)
which was founded in London in April 1907. Samuel and Marcus are founders of this company
(Rana and et.al., 2017). Its headquarter is situated in The Haagse Hout, Netherlands and
registered office in London, England. This company mainly serves oil and gas products
worldwide. China, Hong Kong, Malaysia, Philippines, UK, Ireland, Australia, etc. are some
major countries where it operates its operations. Currently it has workforce of 86000 employees
who working in its 44000 service branches in 70 countries.
Shell has the third largest market share in the United Kingdom in oil and gas industry,
because its main competitors called British Petroleum and Esso holds the larget market share in
this country. These competitors are also offering same oil and gas products which has offered by
Shell. Its sales ratio is increasing year by year, because in 2016 it has generated 233,5911 million
dollar, 305,179 in 2017, and 388,379 in 2018.
Problems and Challenges
In 2007, shell has given $30 millions as a penalty charges to break business laws in US. It
has violated rules and regulations of FCPA, so its brand image was negatively affected in past
years (Zaman and Yoon, 2017). Current market competition is also a main challenge to
company.
External Environment
External environment refers such outside factors of a business environment. These factors
are highly influencing the Shell in both way positively and negatively. Analysis of external
environment is necessary task to the company for maintaining its progress in respective market.
There are PESTEL and Porter's 5 forces tools plays great role in identifying impact of external
environment. There is PESTEL tool has been used below for analysing external environment of
the Shell.
1

PESTEL Analysis
PESTEL analysis tool is too necessary for Shell, because it systematically shows six
major factors of company's external environment (Murphy, 2018). These six factors of tool has
been discussed below;
Political: Political factors are basically activities related to policies of government.
 Opportunities: Expansion, Tax relaxation
 Threats: Strict policies, Trade barriers
Economic: Economic factors are related to country's economic conditions.
 Opportunities: High Profit, Business expansion
 Threats: Instability, Loss of revenue
Social: Social factors means impact of society on company. These factors are too favourable to
this company.
 Opportunities: Quality services, People attention
 Threats: Loss of goodwill, Changing preferences
Technological: Technological factors refers existing technology within the country.
 Opportunities: Increase performance, gain market share
 Threats: Expensive, Proper knowledge
Environmental: Environmental factors are related to natural environment.
 Opportunities: Healthy environment, Resources availability
 Threats: Rules and regulations, Climate change
Legal: Legal factors refers legislation, standards and regulation which company need to adhere
in its daily operations
 Opportunities: Ethics, High Brand Image
 Threats: Restrictions, Complicated formalities
CONCLUSION
It can be concluded that the Shell need to develop some new and modern business
strategies to productively face these external factors. It needs to take advantages from
opportunities of these factors and also need to deal with existing threats. Then company will able
to gain huge profit in the market.
REFERENCES
Books and Journals
2

Rana, P., and et.al., 2017. Sustainable business models: Theoretical reflections. In Value
networks in manufacturing. (pp. 95-109). Springer, Cham.
Zaman, F. and Yoon, D., 2017. Effects of External Environment on the Nature of Performance
Measures' Use. 経経経経経経経経経経経経経= Reveiw of management and information of
innovation. 6. pp.15-29.
Online
Murphy, F. 2018. Shell PESTEL Analysis & Environment Analysis. [Online]. Available Through:
<https://www.essay48.com/term-paper/13622-Shell-Pestel-Analysis>.
3