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Chapter 6 strategic objectives and recommended strategies

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Chapter VI
CHAPTER VI
STRATEGIC OBJECTIVES AND RECOMMENDED STRATEGIES
After evaluating the strategy-formulation analytical framework of matrices (Chapters III,
IV and V), careful assessment of the appropriate strategy must be observed to recommend
strategic plans needed to cope with the environmental uncertainties given its internal resources.
I. STRATEGIC AND FINANCIAL OBJECTIVES
The strategic objective of Chevron is to gain competitive advantage through
corporate growth and social and environmental awareness. The potential growth of
energy industry is continuously inclining because of its increasing demand, but the
current reserves of non-renewable energies, which constitute the majority of the energy
supplies, are becoming scarce and gradually depleting. Still, potential proven reserves of
these energies are known to supply the increasing demand for more than 25 years. The
potential increase in energy supplies in the US is high such that local energy companies
like Chevron could allocate resources to acquire possible energy sources to increase its
energy assets. Chevron is currently doing strategic efforts that involve environmental
sustainability and community improvement. That will help them gain positive public
image, therefore, gaining attractiveness and market share growth.

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Chapter VI
The financial objective of Chevron is to sustain profitability, equity growth and
decrease overhead cost and operating expense through backward integration. Data from
financial ratio shows that profitability of Chevron is inclining from the past 3 consecutive
years (Chapter IV, part III). Its impact to Chevron’s financial stability is increasing, thus,
equities and net income are in positive motion. Also, growth in revenues, higher earnings
per share and dividends, increase profit margins and Return on investment/ROI are
evident for 2 consecutive years, after the effect of financial crisis on 2009. This helps
Chevron to cope of to its decrease in 2009 and further improve its production and
operation facilities. Improvement in financial stability will support the facilitation of
strategic objectives.
II. RECOMMENDED BUSINESS AND ORGANIZATIONAL STRATEGIES
Current strategic issues in external and internal analysis (Chapter III, part IV and
VI, part IX) must be addressed accordingly in implementing recommended strategies. In
strategic formulation, quantitative strategic planning matrix/QSPM shows that backward
integration is recommended for Chevron for them to gain strategic solutions to these
current issues. Backward integration involves acquiring control over its supplier to meet
their needs at a lower cost. The following activities should be done such that;
(1) The exploration division should seek possible energy reserves, especially non-
renewable energy such as crude oil and natural gas;
(2) Acquisition of properties to protect them from competitors; and

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88 CHAPTER VI STRATEGIC OBJECTIVES AND RECOMMENDED STRATEGIES After evaluating the strategy-formulation analytical framework of matrices (Chapters III, IV and V), careful assessment of the appropriate strategy must be observed to recommend strategic plans needed to cope with the environmental uncertainties given its internal resources. I. STRATEGIC AND FINANCIAL OBJECTIVES The strategic objective of Chevron is to gain competitive advantage through corporate growth and social and environmental awareness. The potential growth of energy industry is continuously inclining because of its increasing demand, but the current reserves of non-renewable energies, which constitute the majority of the energy these energies are known to supply the increasing demand for more than 25 years. The potential increase in energy supplies in the US is high such that local energy companies like Chevron could allocate resources to acquire possible energy sources to increase its energy assets. Chevron is currently doing strategic efforts that involve environmental sustainability and community improvement. That will help them gain positive public image, therefore, gaining attractiveness and market share growth. Chapter VI supplies, are becoming scarce and gradually depleting. Still, potential proven reserves of 89 The financial objective of Chevron is to sustain profitability, equity growth and decrease overhead cost and operating expense through backward integration. Data from financial rat ...
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