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Strategic Plan Part 3: Strategic Evaluation and Recommendation

In this section, you will be evaluating various strategies and making recommendations for the organization.

Write a 1,050-word minimum strategic evaluation in which you include the following:

  • Evaluate potential business level strategies for the organization.
  • Assess potential corporate level strategies for the organization.
  • Assess potential global strategies for the organization.
  • Recommend a strategy or combination of strategies the organization should implement, and include a rationale for that recommendation.

Format your paper consistent with APA guidelines.


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VALUE CREATION AND COMPETITIVE ADVANTAGE SUSTENANCE Environmental Scan Chelsie Kelly STR 581 Professor Wynne 5/8/17 VALUE CREATION AND COMPETITIVE ADVANTAGE SUSTENANCE 2 Introduction Every organization aims at creating value for its products as it helps in the selling of goods and services and hence profitability. In the creation of value by organization’s customers by increasing stock prices, the availability of future capital investments for significant operations funding. Value is created in cases where an organization earns a return on its capital which exceeds all the expenses incurred by the business. Value creation can also be defined by intangible profit players like the availability of innovation, ideas wrought by employees as well as company brands available. The initial step in the achievement of value is striving to understand all the factors that contribute to value creation within the organization or the marketplace. A proper understanding of the factors that led to the creation of value assists managers to focus capital on the opportunities that are highly profitable and rewarding to the organization (Pederson, 2011). Competitive advantage allows an organization to compete with all its competitors and remain at the top. The attributes that contribute to competitive advantage include the availability of the necessary resources, the presence of highly skilled labor, the geographic location of the organization and in some instances the access to new technologies. Therefore competitive advantage refers to the leverage possessed by an organization over its chief competitors. Total Company Overview The petroleum industry is composed of different firms which function independently in the provision of oil products and services to customers. Each of the oil companies has independent managerial staffs that make decisions on behalf of the firm different from the other companies. Total Company is one of the enterprises in the petroleum industries. The company is a VALUE CREATION AND COMPETITIVE ADVANTAGE SUSTENANCE 3 multinational French-based Oil and Gas Company which engage in the distribution of oil and gas products across the world (Pederson, 2011). For decades the Total Company has been dealing with different services that have made it fulfill its goals and achieve its set objectives. The company has laid down measures that ensure that its products and services are accessible to all customers around the globe in the most fulfilling and efficient means. There are so many strength and opportunities that the company can exploit to achieve more success as well as weaknesses and Threats it has to work on to ensure it remains to stand out among the other businesses in the industry. Total Company Value and Competitive Advantage The Total company has the potential of creating value for its customers to ensure that they are always satisfied by the products and services the company offers them. Through the observation of the environment that surrounds the company, it can be seen that it has a potential of extending the availability of products services. The company can create value by ensuring that its products and services are made available throughout the world in a convenient and efficient way. This is possible through the use of suppliers and forming mergers with other companies that can be helpful in the distribution process. The company is known in most countries because of its products and should, therefore, form a basis of retaining customer’s loyalty and satisfaction. The company is among the six companies that are considered as the major oil and gas distributors. With this fact in mind, it can be seen that the company face stiff competition from the other businesses and therefore it has the burden of ensuring that it remains to be the best among them all to sustain its competitive advantage. VALUE CREATION AND COMPETITIVE ADVANTAGE SUSTENANCE 4 Competitive advantage can be gained by the company through the differentiation of its products to ensure that it offers its products and services in the state preferred by the customers. Differentiating products makes them look attractive and hence to stand out from competitor’s products, the company has the opportunity of creating differentiated products by using its innovative staff and employees, carrying out research and then making appropriate developments to its products. The benefit of differentiated products is that customers can pay more when they see products and services as being different from those offered by other firms It should also strive to gain the advantage of cost leadership by offering its products and services at lower prices in comparison to the competitors. The Total Company have a wellestablished market is in a position to distribute its products at a lower price then it will have the advantage of retaining customers. Adoption of methods of distribution which are less expensive will ultimately have the result of high-profit realization and maintenance of competitive advantage. The company can also adopt the focus strategy where it aims at a particular target; the target may be some customer needs to be seen in the environmental scan. Through the narrowing down of the market into segments, the company will be in better positioned to meet all the needs the customers have in an efficient manner Total companies have recently made an announcement that it has invested € 30 Million to take advantage of the UK shale gas industry. It is considered as one of the companies that make up the Big Oil Group; if it utilizes the UK shale gas investment appropriately, it will benefit a lot. VALUE CREATION AND COMPETITIVE ADVANTAGE SUSTENANCE 5 Total Oil Company External Environment External environment refers to the factors that are outside the scope of business yet they affect its ability to function either positively or negatively. Some of the factors can be altered by the organization while others are not in the control of the business at all. Some of the examples of the external Environment factors include customers, the government, the economy, competition and public opinion. Total Company faces stiff competition from the other firms in the petroleum industry which pose a threat to its survival and profitability. Some of the main competitors are the six members of the big oil groups which are Anglo- Iranian Oil Company popularly known as BP, Gulf Oil which was the later part of Chevron, Standard Oil Company of California which is the today's Chevron and the Standard Oil Company of New York Esso (Exxon).The Company has an excellent public reputation which makes its customers remain loyal to them, and therefore it should be maintained. Total Company General Environment Total Company has been operating for several decades and has remained to make profits. It has a well-established corporate social responsibility that ensures that its operations are in the most appropriate manner. The company observes ethical measures as well as codes to make sure that its customers, stakeholders, and affiliates are satisfied with all its services and products. It has been able to leverage over its competitors through the adoption of different strategies (Pederson, 2011). VALUE CREATION AND COMPETITIVE ADVANTAGE SUSTENANCE 6 Total Industry Operating Environment The Total company management comprises of a Board of Directors and has a group of employees. The employees make sure that all the operations of the organization are carried out appropriately. It has its headquarters in France and hundreds of establishments in other countries around the world. References VALUE CREATION AND COMPETITIVE ADVANTAGE SUSTENANCE Cheong, S. F. (n.d.). Implementing total quality management in Oil Distribution company. doi:10.5353/th_b3196855 In Pederson, J. P. (2011). International directory of company histories: Volume 118. Detroit, MI: St. James Press. Switzerland: Trans Tech Publications. The process of strategic planning. (n.d.). Process-based Strategic Planning, 45-64. doi:10.1007/978-3-540-68583-8_5 Total Global Homepage - Oil, Natural Gas, and Solar Energy Company | total.com. (n.d.). Retrieved from http://www.total.com/en 7 Running head: INTERNAL ENVIRONMENTAL ANALYSIS Internal Environmental Analysis Name: Instructor: Course Title: Date: 1 INTERNAL ENVIRONMENTAL ANALYSIS 2 Total's Internal Environment The company has a number of internal aspects that helps it to operate efficiently. The internal environment fosters optimal productivity as well as utilization of capacity (Total, 2017). The company's internal environment usually has an effect on its external operations. It means that if the company does not emphasize on a highly efficient internal environment, then it is hard for it to realize its overall business objective. To begin with, Total believes in corporate governance. It has in place a board of directors and four management committees. The board of directors' role is to come up with strategic planning and oversee the implementation of various strategies that are in line with the company's vision. After the strategic planning, the company's management committee assists the BOD in implementing the various strategies. The four committees are audit, ethics and governance, strategy and compensation. In general management, the company has an executive committee and group performance committee. The two management committees have several duties including overseeing the business and financial performance. Total has in place an ethics policy that provides guidance on the employees' behavior. The company operates internationally where it faces complex, diverse, sociocultural and economic environments (Total, 2017). It is against this backdrop that the company should have in place an ethics policy that addresses the needs of all stakeholders. Additionally, the company applies its ethics policy to avert security, health, safety, ethical and environmental risks that are associated with globalization. Subsequently, the company has in place three values: responsibility, respect and exemplary behavior. The company applies three guiding principles that help it to meet the three values. The first principle is ensuring that the company meets the highest standards of safety, health, security and environment. The second principle entails having INTERNAL ENVIRONMENTAL ANALYSIS 3 stringent integrity standards in place. Lastly, the company seeks to respect human rights, and it has made this principle to be one of its topmost priority issues. In addition to the organizational structure and ethics policy, Total adheres to three commitments. The first commitment entails the production of energy that contributes to social and economic development (Total, 2017). This commitment helps the company to deliver energy that safe, available and more affordable to the ever growing population. The second commitment is to foster integration of climate in the company's strategies. Given that the company has an interest in fossil fuels that are known as pollutants, it endeavors to lower the carbon levels of its products through coming up with a viable mix. The company also pursues energy efficiency through producing energy that meets its intended objectives without wastage. The last commitment that the company upholds is to reinvent customer relationship. The company identifies that products and services have become closer to consumers, digital and more responsible. Subsequently, the company seeks to remain relevant to its customers. Total's Important Strengths and Weaknesses One of the most important strength that the company has is expertise that falls into three categories: explore and produce, transform and develop, and ship and market. Under explore and produce category, the company has a mission to produce oil and gas that can sustain the needs of the world (Total, 2017). It can manage to operate deep shore and LNG expertise into use to produce oil and gas. The company also has an efficient project management expertise that has a basis on key success factors of innovation, operational excellence, and it adheres to budgetary allocations and timeliness. Total believes in sustainable and shared development, and it always seeks to limit the impact of its industrial operations. The company also produces solar power, where it has the cutting edge technology expertise. It liaises with SunPower affiliate to produce INTERNAL ENVIRONMENTAL ANALYSIS 4 high-quality solar panels. Total has invested in solar value chain through producing cells, designing solar plants, and installing solar panels in residential homes. Lastly, Total has expertise in Bioenergy, which is a renewable source of energy. The company makes bio-lubricants, biofuels, and bioplastics. It also produces biomass conversion pathways, and it also seeks to get an environmental and social license in every project that it handles. Under transform and develop category, the company has the expertise to refine oil and come up with petrochemical products. This expertise seeks to empower the company to meet global energy needs (Total, 2017). In its activities, the company seeks to meet operational excellence through pursuing safety and energy efficiency, among other values. Lastly, the company seeks to form lasting partnerships and become a responsible industrial player. The company also has the expertise on polymers development and marketing. Polymers are used for several purposes including making industrial product packaging materials and construction materials. Lastly, the company has the expertise to make specialty chemicals. Under ship and market category, Total has the expertise to in trading and shipping. It also has expertise products that are used mostly in the transportation industry. Total is a publicly traded company, and it prides in having investors. It means that the company has addressed its capital needs efficiently. It uses dividends and shares as its rewarding system on its investors. The company also identifies its employees as one of its strengths. Currently, it has 98,000 employees, and the number represents 150 nationalities and 500 professions (Total, 2017). The other strength entails an integrated business model that enables the company to operate efficiently. The company has the ability to explore, produce, process and market its oil, gas and solar products. This is an integrated business model that emphasizes on covering the entire value chain. INTERNAL ENVIRONMENTAL ANALYSIS 5 On weaknesses, the company faces several challenges, but it has not conclusively addressed them. The company faces a challenge in ensuring people's safety and security, climate change, and integration with the local community (Total, 2017). However, Total has made several commitments that seek to reduce the effects of the challenges that it faces. The Most Important Internal Environmental Factors in the General, Industry, and External Analysis In general, the most important internal environmental factors include organizational structure, expertise, and resources. It takes a company to have a strong managerial team that can oversee the entity's operations efficiently. The entity should also have the expertise to carry out the various processes that its operations feature. The processes ranging from production to marketing should be savvy enough for the company to meet its social and economic objectives. In the industry, the most important internal environmental factor is the business model. While it is possible to produce piecemeal and pass a product to another company that exists in eth value chain, the adoption of an integrated business model ensures that the company meets the vision that it has for its customers. In return, the customers make such a company their preferred choice. Lastly, the internal environmental factor that affects the external analysis includes a commitment to environmental preservation and societal well-being. Elements such as ethics play a significant role in ensuring that an entity performs well in its external environment. Competitor Analysis According to Cunningham (2015), Total ranked seven among ten biggest oil companies. The leading company is China's Sinopec oil company that is valued at $455.06 billion. China's CNPC comes second with a value of $432 billion, and the third one is Royal Dutch Shell with $422 billion. The fourth one is ExxonMobil with $394 billion while the fifth one is Saudi Aramco with INTERNAL ENVIRONMENTAL ANALYSIS 6 $378 billion. The sixth one is BP with a value of $358.7 billion, and Total SA takes the seventh position with a value of $260 billion. Kuwait Petroleum Corp, Chevron Corp, and Russian Lukoil take the eighth, ninth and tenth positions with a value of $252 billion, $192 billion, $144 billion respectively. Structure of the Organization and Its Influence on its Performance Total's organizational structure is made up of the board of directors and four management committees. The board of directors' role is to come up with strategic planning and oversee the implementation of various strategies that are in line with the company's vision. After the strategic planning, the company's management committee assists the BOD in implementing the various strategies. The four committees are audit, ethics and governance, strategy and compensation. In general management, the company has an executive committee and group performance committee. The two management committees have several duties including overseeing the business and financial performance. This organizational structure helps the company to operate internationally effectively. Total's Competitive Position and the Possibilities This Provides Total ranks seventh among the world's largest oil producing companies. The rating has a basis on the total value of companies, and it also represents the production capacity of the said oil companies. It means that the production capacity of Total cannot outwit the one that the leading company has. Subsequently, Total has to seek more resources to rise up the ranks. More resources translate to a higher production capacity. INTERNAL ENVIRONMENTAL ANALYSIS 7 References Cunningham, N., (2015). Big Oil: Which Are The Top 10 Biggest Oil Companies? Oil Price. Web. Retrieved from http://oilprice.com/Energy/Crude-Oil/Big-Oil-Which-Are-The-Top-10Biggest-Oil-Companies.html. Total, (2017). Global Homepage - Oil, Natural Gas, and Solar Energy Company. Web. Retrieved from http://www.total.com/en.
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Running head: STRATEGIC EVALUATION AND RECOMMENDATION

Strategic Evaluation and Recommendation
Name:
Instructor:
Course Title:
Date:

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STRATEGIC EVALUATION AND RECOMMENDATION

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Total Business Level Strategies
One of the business strategies that Total applies in its operations is diversification. While
its positions in the market as an oil and gas company, Total also deals with solar power and
bioenergy (Total, 2017). Under oil and gas, the company specializes in deep shore rigging and
liquefied gas. It shows that the company does not stick to oil exploration on land, but it has gone
a step further to explore in the deep sea. The company has also managed to liquefy gas despite
the existing option of dealing with gas in its natural form. Total has embraced renewable energy
sources. It has invested in solar energy production where it produces energy, solar cells as well
as solar panels for residential homes. Lastly, the company has invested in bioenergy production,
and it also manufactures bioproducts such as biofuel and bio lubricants.
The fact that the company deals with more than one product denotes the application of a
business strategy. The other business strategy that Total applies in its operations is cost
leadership. Through product diversification, the company manages to make products that fit into
anyone's budget. If a customer feels that the use of oil and gas products is expensive, then they
can switch to either using solar or bioenergy. In its quest to foster shared development, Total
endeavors to extend energy to everyo...


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