Business Case Report: Analysis of VALMEC's Challenges and Solutions

This video business case report examines the challenges faced by VALMEC, an Australian infrastructural services group in the oil and gas industry. The report identifies key issues such as the shrinking traditional market, resource consumption, and fluctuating oil prices. Causes like unmatched investment and price drops are analyzed. The report proposes alternative solutions, including product diversification, market expansion, and strategic alliances, evaluated using decision criteria like competitive advantage, environmental impact, and return on investment. Ethical considerations are also addressed. Recommendations focus on market expansion, diversification, and employee engagement. The report emphasizes the importance of understanding new markets, building alliances, and adapting to customer preferences. Implementation strategies involve standardized operations, risk management, and alignment of objectives. The report concludes with implications for responding to market changes and financial conditions, aiming to improve VALMEC's service quality and sustainability.

Running head: VIDEO BUSINESS CASE REPORT
VIDEO BUSINESS CASE REPORT
Name of the Student
Name of the University
Author Note

1VIDEO BUSINESS CASE REPORT
Executive Summary:
The purpose of the video business case report is to understand the causal agents of the
emerging issues of VALMEC. The challenges faced by the company will be discussed in the
paper by highlighting the causes of the circumstances. The video business case report aimed
at providing alternative solutions to the identified issues of the company or the environment
in which the company is operating. The alternative solutions was followed by the diverged
elements of decision criteria. The paper combined alternative solutions with the decision
criteria for deducing strategic recommendations for the business solution. The paper
concluded by presenting the strategies of implementations and implications of the framed
strategies.
The main issues identified in the company or the business environment of the oil and
gas industry is the shrinking of the traditional market. Another issue on an overall basis is the
burning of resources with the increasing rate of resource consumption. The reduction in the
international oil and gas pricing. One of the main challenges for the company is optimum
channelling of resources, process, personnel and expertise. The recommendations of the
paper revolved around the objective of improving the company reputation in terms of service-
product quality and sustainability. The video business case report presented the
recommendations on the basis of responding to the issues of market sinking and financial
crisis. The implication will act as a response to the changing financial condition of Australia
or the changing price of oil and gas. The main issue which will be addressed by the
recommendation is the shrinking of traditional market. The recommendations included
market expansion, strategic alliance and offering diversification, which can contribute
towards the objective of flexibility, reputation, risk management, quality assurance and
sustainability.

2VIDEO BUSINESS CASE REPORT
Table of Contents
Introduction:...............................................................................................................................3
Issues:.........................................................................................................................................3
Causes:.......................................................................................................................................4
Alternatives:...............................................................................................................................4
Decision Criteria:.......................................................................................................................5
Ethical consideration:.................................................................................................................7
Recommendations:.....................................................................................................................7
Implementation and Implications:..............................................................................................8

3VIDEO BUSINESS CASE REPORT
Introduction:
The Australian energy company VALMEC is an infrastructural services group which
specializes in construction, packaged equipment, commissioning and maintenance for
integrating the maintenance services to oil and gas, energy, and infrastructural resources.
Company is operating in the industry of oil and gas since the year 1988. The operational
activities of VALMEC is focused on the onshore construction activities and maintenance
practices regarding the infrastructural facilities of gas pipeline and upstream gas production.
Few of the offerings of VALMEC includes, multidiscipline turnkey construction, EPC
project solutions, maintenance and services of compressors, gas engines and generator sets.
The company reflect the background in construction and design of the mid-sized gas
compression, brownfields contracting and processing projects (valmec.com.au 2019). The
team of VALMEC is delivering a competitive and technologically diverse set of processing
solutions to the oil and gas industry of Australia.
Issues:
VALMEC is a growing company and has served multiple opportunities in the oil and gas
market requirement of Australia but there has be According to the director of VALMEC,
Kelvin Andrijich, the main issue which the company is experiencing is the shrinking of the
traditional market. The shrink affect the frequency and number of opportunities in the market
and increases the competition in the industry due to less number of projects. Another issue on
an overall basis is the burning of resources with the increasing rate of resource consumption.
The reduction in the international oil and gas pricing (Cassidy, Natasha, and Kosev 2015).
One of the main challenges for the company is to channel the resources, process, personnel
and expertise into a direction, which can respond to the changing/shrinking market on an
optimum level.

4VIDEO BUSINESS CASE REPORT
Causes:
The main cause identified by the director of the oil and gas company, Kelvin Andrijich is the
massive level of unmatched investment by Australia. The attractiveness of the Australian
dollar, led to the increase in the production investment in the oil and gas industry, production
houses were increasing the range of service offerings without syncing the operational
capacity with the demand. Production houses were not realizing the need for understanding
the cycle of return on investment and resource capacity. Another causal agent can be the drop
of oil and gas prices. The limited level of resource availability led to the constraint of offering
services to the major projects. The sudden drop in oil and gas pricing at international level
can be considered as one of the causal agents of the emerging issues.
Alternatives:
Alternatives of the business solutions for VALMEC can be based on the purpose of achieving
a significant position in the market. The alternatives are mentioned below:
One of strategic alternative can be the diversification of the product line, which can be
focussed on the products with lower dependency on limited resources. The alternative of
product diversification can also involve the factor of associating services with the product
orientation. Attached services to the similar product ranges can enhance the value of the
offering, thereby increasing the customer satisfaction (Su, Weichieh, and Tsang 2015). The
customer satisfaction will be ensured by increasing the range of products as it will present
variations (Ansoff et al. 2018). Product diversification and/or the launch of product based
service can help the company with tapping newer markets/opportunities (Ren, Hu, and Cui
2019).
The second alternative can be entering into newer markets. For responding to the
challenge of sinking traditional market, the company can expand the customer base by

5VIDEO BUSINESS CASE REPORT
entering into newer potential market. The entry can also be facilitated through the investment
in the production facility in other countries. The company is fully based in Australia and
mostly serves the client in Australia. Expansion can present newer opportunities with
improved financial and human resources.
Another alternative of the business solution can be the incorporation of specialized
partners. Although, the company strongly believes in the functionality of self-execution,
strategic alliance can contribute towards the attainment of international business goals
(Albers et al. 2016). The international business expansion can be supported by the
understanding of foreign trading regulations and market knowledge.
Decision Criteria:
The decision criteria will be based on the issues and causes of VALMEC, as
communicated by the director of oil and gas, Kelvin Andrijich. The decision criteria will
mainly be focussed on the qualitative and quantitative approach, which leads to success and
growth in productivity of the company. The qualitative decision criteria selected for resolving
the issues of VALMEC are competitive advantage, environmental impact and flexibility. The
quantitative decision criteria which can be used for responding to the issues and causal agents
are return on investment and risk factors assessment. The elements of the decision criteria can
be divided in the forms like, reputation, employee engagement, quality assurance, risk
management and assessing the rate of growth (Greco, Figueira, and Ehrgott 2016).
Primarily, the company should be focusing on the aspect of building a significant USP
(Unique Selling Price), as it will act as a competitive advantage among the competitors of the
industry. The USP of the company, as communicated by the director of oil and gas is self-
execution and multi-disciplinary practices. The company can build their competitive
advantage around the factor of standardization in regards of quality and delivery efficiency.

6VIDEO BUSINESS CASE REPORT
Self-execution is the characteristics in which the company own every phase of its operation
rather than outsourcing various operational activities, this activity ensures quality and
alignment of the strategic goals with the actual production and/or maintenance practices. The
differentiating factor of VALMEC will reflect the incorporation of innovative practices and
efficient production process of the company. The standardized service quality will contribute
in the process of building strong customer reputation. Multi-disciplinary approach helps in
assuring the guidelines and resource usage for the purpose of an optimum delivery and
production quality (Crane, Andrew, and Matten 2016).
The company needs to assess the past financial records and future forecast values for
understanding the investment gaps. The company deals with resources which are limited in
quantity, leading to the requirement of optimum utilization. Assessment of the risk and
financial investment criteria will contribute towards an effective decision-making process.
Risk management will ensure the elimination of the gap in financial or operational resource
capabilities and the strategic objectives (Govindan et al. 2015).
Another decision criteria should be focussed on the factor of return of investment.
Similar to the assessment of financial analysis for risk management, the company needs to
synchronize its financial decisions with the marketing research data like market demand,
customer preferences and competitive strategies (David, Fred and Forest 2016). The financial
decisions like investment criteria for resources, production process and service capacity
should be in coordination with the adaptive operational activities of the production and
maintenance process. Return on investment will determine the future investment capabilities
and profit/growth maximization rates (Shi, Xunpeng, and Variam 2017).
The decision based on factor of environmental impacts will contribute towards
customer satisfaction as the customers are becoming aware of the changing environmental

7VIDEO BUSINESS CASE REPORT
concerns and are preferring to use companies with low level of carbon footprint or adverse
environmental impacts. The environmental impact can be reduced by the incorporation of a
strict operational and resource utilization boundaries. The resource allocation will have to be
implemented strategically for the purpose of responding to the constraint of limited resources.
Ensuring the elimination of environmental impact from the operational activities is very
crucial for the facilitation of the decision criteria (Lin, Haiying, and Darnall 2015).
Lastly, flexibility is another criteria which can act as a response to the emerging
organizational issues. Flexibility can be achieved by practicing the strategy of employee
involvement. Employee involvement and motivational practices can incorporate innovative
ideas/strategies for the purpose of reaching a coordinated goal.
Ethical consideration:
The ethical consideration in this case will be ensuring the ensuring the
implementation of specific practices based on the rules and regulations of the host country.
The ethical consideration in regards with following labour laws. Ethical consideration in
relation to the preferences of customers in the host country (Carrington et al. 2016).
Recommendations:
The recommendations for the business solution will be based on the communicated
issues of the oil and gas company, VALMEC. The first step for ensuring return on
investment in expanding the market can be the understanding and knowledge of the newer
markets, investing in a well-researched market will result in the effectiveness in
communicating the competitive advantages of the company. The competitive advantage of
the company can expand its focus from self-execution to strong alliances. The strong alliance
strategy with the control over the basic operational activities will result in the formation of an
efficient business entity. The issues of the dependency on the changing oil and gas prices can

8VIDEO BUSINESS CASE REPORT
be addressed by the strategy of diversification (Das 2017). The diversification strategy can be
implemented by the decision criteria of risk management. Risk management will involve the
assessment of financial reports as well as the analysis of past and future investment decisions.
The product diversification will require strategic allocation of financial and human resources.
Flexibility is another factor which can help with the facilitation of strategic alliance and
employee engagement. Flexibility will encourage the practice of innovative ideation and will
reflect the acceptance towards the changing business environment or market expansion. The
company will have to undergo an intensive research process for understanding the potential
and regulations of newer markets as well as the company needs to understand the changing
customer preferences for implementing any product diversification practices (Deligianni et
al. 2017). The process of quality assurance can be achieved by the incorporation of
standardised system of operation. Even though the company will be benefited by the strategy
of alliance or partnership (for the purpose of supporting market expansion) but it will have to
include the objective-alignment practices. The communication of the policies and expectation
can contribute towards the strong relationship with the supporting entities. VALMEC can
also respond to the issues by building a significant relation with the contemporary entities
(Tjemkes et al. 2015).
Implementation and Implications:
The implementation plan for the business can be ensured by the restructuring of
marketing strategies as well as redesigning the vision mission statement of the business. The
facilitation of the regular monitoring process in regards with the quality control, safety
measures and the optimum utilization of resources (financial, human and raw material) can
lead to the attainment of customer and employee satisfaction. The implication of the decision
criteria and alternatives can be positive for responding to the arising issues if the company
involves strategies for budget planning. The budget will involve research and development

9VIDEO BUSINESS CASE REPORT
investments for market expansion as well as for incorporating innovative measures. The
implementation will involve the association of ‘service’ elements with the product offerings
as it will enhance the value of the products with the attainment of customer satisfaction. The
company will have to incorporate the process of employee engagement for extracting
innovative measures in the production process. The implication of the deduced
recommendation will act as a response to the changing financial condition of Australia or the
changing price of oil and gas. It will also respond to the increasing competition and changing
international regulations. The main issue which will be addressed by the recommendation is
the shrinking of traditional market.

10VIDEO BUSINESS CASE REPORT
References:
Albers, Sascha, Franz Wohlgezogen, and Edward J. Zajac. "Strategic alliance structures: An
organization design perspective." Journal of Management 42, no. 3 (2016): 582-614.
Ansoff, H. Igor, Daniel Kipley, A. O. Lewis, Roxanne Helm-Stevens, and Rick Ansoff.
Implanting strategic management. Springer, 2018.
Carrington, Michal Jemma, Detlev Zwick, and Benjamin Neville. "The ideology of the
ethical consumption gap." Marketing Theory 16, no. 1 (2016): 21-38.
Cassidy, Natasha, and Mitch Kosev. "Australia and the global LNG market." Reserve Bank of
Australia Bulletin March Quarter (2015): 33-44.
Crane, Andrew, and Dirk Matten. Business ethics: Managing corporate citizenship and
sustainability in the age of globalization. Oxford University Press, 2016.
Das, Tushar Kanti, ed. Managing Alliance Portfolios and Networks. IAP, 2017.
David, Fred R., and Forest R. David. Strategic management: A competitive advantage
approach, concepts and cases. Pearson, 2016.
Deligianni, Ioanna, Irini Voudouris, and Spyros Lioukas. "Do effectuation processes shape
the relationship between product diversification and performance in new ventures?"
Entrepreneurship Theory and Practice 41, no. 3 (2017): 349-377.
Govindan, Kannan, Sivakumar Rajendran, Joseph Sarkis, and Parasurama Murugesan. "Multi
criteria decision making approaches for green supplier evaluation and selection: a literature
review." Journal of Cleaner Production 98 (2015): 66-83.

11VIDEO BUSINESS CASE REPORT
Greco, Salvatore, J. Figueira, and M. Ehrgott. Multiple criteria decision analysis. New York:
Springer, 2016.
Lin, Haiying, and Nicole Darnall. "Strategic alliance formation and structural configuration."
Journal of Business Ethics 127, no. 3 (2015): 549-564.
Ren, Charlotte R., Ye Hu, and Tony H. Cui. "Responses to rival exit: Product variety, market
expansion, and preexisting market structure." Strategic Management Journal 40, no. 2
(2019): 253-276.
Shi, Xunpeng, and Hari MP Variam. "East Asia’s gas-market failure and distinctive
economics—A case study of low oil prices." Applied energy 195 (2017): 800-809.
Su, Weichieh, and Eric WK Tsang. "Product diversification and financial performance: The
moderating role of secondary stakeholders." Academy of Management Journal 58, no. 4
(2015): 1128-1148.
Tjemkes, Brian, Pepijn Vos, and Koen Burgers. Strategic alliance management. Routledge,
2017.
valmec.com.au "About". 2019. Valmec Limited. http://www.valmec.com.au/about/.