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Introduction Of Chevron Case study

Chevron is a multinational energy corporation that is based in America that deals with gas and oil. It is the direct descendant of standard oil and the company is the second largest. Chevron is generally known as the Standard Oil Company of California. The headquarters of Chevron is situated in San Ramon, California (Chevron 2022a). The company is active in various countries. Chevron is famous for engagement in various aspects of natural gas and oil industries like hydrocarbon exploration and production, refining, market and transport, manufacturing of chemicals and sales, and generation of powers.

Introduction Of Chevron Case study

Chevron Situation Analysis

Chevron is a multinational integrated gas and oil company that is based in America. The business of the company covers the gas and oil chain, exploration of natural gas and crude oil, production of power generation, refining, transportation, marketing of petroleum products, and trade of international crude oil and product (IIDE 2022). Today, Chevron retails petrochemicals and markets products and related services operating in renewable energy. The company also promotes training, the safety of roads, access to energy and efficiency of energy. Products and services by Chevron are fuel, petrochemicals and lubricants; natural gas; chemicals; oil refining and others. 

Chevron Situation Analysis

Vision and Mission Statement of Chevron

Chevron explains the beliefs, purpose, vision and values. The company guides how it will work and create a common understanding that is based on aspirations and culture. Human ingenuity has the power that will resolve challenges and overcome obstacles. The vision of the company is to meet the increasing needs of energy of the world and develop the requirement of advancements and innovations that leads to a better life. The vision of Chevron is to develop affordable, ever cleaner and reliable energy that assist in the progress of human (Chevron 2022a). To achieve this, the mission of the company is to work together to deliver the energy that will assist humans in their progress in the world. The company lives on this purpose every day. The mission of the company is to use the perseverance and imagination of the people to deliver solutions that will meet the greatest challenges of energy. The mission of the company will make the global supply chain and energy more sustainable, assisting the customers and industries to advance in a world that is low carbon filled. The vision of the company is to be a global energy company that will be most admired for its partnership, performance and people (Chevron 2022d). The values of the company are diversity and inclusion, performance, partnership, trust and integrity which will help people to achieve the mission and vision of the company. The inclusive environment of work of the company values the diversity and uniqueness of talent, ideas and experience. Chevron develops the leaders and collaborates as one team to provide top-level performance. The company believes in a partnership where there is a trusting and mutually beneficial relationship. Chevron works together to get the solution that will provide benefit to the shareholders and society. The mission of the company is to earn trust and respect with the highest ethical standards.

    Industry Structure and Economic Feature

    The business Chevron combines the effective use of technology along with innovation t improve mature fields, discover new resources and fulfil the growing demand for energy of the world. The company has targeted investments and a persistent focus on operational excellence. The company delivers energy for progress. The focus area of the company is the deep-water US Gulf of Mexico, West Africa, Western Australia, Shale and Tiger resources in the US, Argentina or Canada. The company utilizes various technological capabilities to fulfil the new challenges (Chevron 2022b). Chevron plays an important role in bringing opportunities for new resources and proved reserves into production via major capital projects. The portfolio of the company spans all forms of energy. Exploring and producing each of the key basins delivers scopes to fulfil the complex energy challenges of tomorrow.

    Chevron Strategic

    1. Business level strategies

    The Business level strategy of Chevron is executing a straightforward strategy that is grounded in capital and cost discipline. The company aims to improve the flow of cash and return more to the shareholders by improving the strength of the company to provide low-carbon energy to the growing world. To regulate the higher returns, there should be the maintenance of guidance for annual organic capital and exploratory expenditures of $15 billion to $17 billion through 2026 (Chevron 2022b).  The company announced to make a target to decrease 2026 operating expenses per barrel by greater than 10% from 2021. The business level strategy of the company is to improve the expected gas and oil production by greater than 3% by 2026. The company aims to decrease the intensity of the carbon intensity of carbon of its operations and increase the new energy business line in hydrogen, the capture of carbon and offsets.

    2. Corporate Level Strategies

    The company is consistent with the long-standing financial priorities of the company, increased cash generation from the traditional business. The company supports the growing dividend, strong balance sheet, investment in the new and traditional energy businesses and steady buybacks. Chevron is one of the leading energy companies in the world and it believes that reliable, affordable and ever-cleaner energy is necessary to achieve a more prosperous and sustainable world (Chevron 2022c). The corporate-level strategy of the company is to the production of natural gas and crude oil; manufacture transportation fuels, petrochemicals, lubricants and additives; developing technologies that will improve the business and industry. The focus of Chevron is to decrease the intensity of carbon and seek to develop lower carbon businesses in addition to a traditional line of business.

    Competitive Analysis and Advantage in the Industry

    Chevron is a multinational integrated gas and Oil Company that is America based. The business of the company covers the gas and oil chain, exploration of natural gas and crude oil, production to the generation of power, transportation, marketing of petroleum products, and trade of international crude oil and product. Chevron is aware of all the environmental risks of its operations (IIDE 2022). The motive of this company is to decrease the risks that will hamper the status of the company in the industry.

    SWOT analysis

    Strengths

    Strengths of Chevron are 63rd rank with the Brand Finance report; vertical engagement of Chevron in exploration and production of crude oil and natural gas; improvement in the technology to reduce the carbon footprint and emission of the greenhouse gas that results in the extraction of more fuel with less effort. Chevron has many patents that are registered in its name and they have a continuous investment in R&D (IIDE 2022). It assists in decreasing expenditure and delivers competitive advantages. The major strengths of Chevron are its gigantic geographic presence. The company is found in more than 180 nations and is officially recommended by Renault, Mitsubishi, Nissan and others.

    Weaknesses

    The weaknesses of the company are increasing debts which means increased business risk and an elevated amount of flow of cash. The other weaknesses are a shortage of financial and technical issues, a history of social and environmental impacts, strong governmental regulations and policies, legal issues (IIDE 2022).

    Opportunities

    The opportunities are increasing demand for Chevron, investment of Chevron in solar and wind power; global economic growth and the demand-supply gap (IIDE 2022).

    Threats

    Threats of Chevron are lawsuits in various markets, dependability of the company on renewable energy and non-conventional source of energy, increased emission of carbon dioxide leading to change of the climate, political volatility, and intense competition (IIDE 2022).



    PESTLE analysis

    Factors

    Description

    Political

    The Political factors causing an effect on Chevron are geopolitical conflicts and tensions in the Middle East, the impact of change in the tax policies, and the effect of trade regulations and sanctions on businesses (Fern Fort University 2022).

    Environmental

    Various economic factors are fluctuating crude oil prices and the impact of slowdown, GDP and economic growth that affects the status of Chevron (Fern Fort University 2022).

    Social

    They are aware of the consumer and focus on environmentally friendly fuels, the level of social concerns and awareness in society, and the pressure of the investor to venture beyond the core business of Chevron (Fern Fort University 2022).

    Technological

    The technological factors affecting Chevron are automation in gas and oil and artificial intelligence; edge computing and increased adoption of loT services; drone technology and 3D virtual modelling (Fern Fort University 2022).

    Legal

    The legal factors are an infringement of the property, health and safety in the gas and oil industry (Fern Fort University 2022).

    Environmental

    Environmental factors are regulation of the emission of greenhouse gas, an initiative of the capture of carbon and storage, and impact of the adverse weather condition (Fern Fort University 2022).

     

     Marketing Mix of Chevron

      1. Product Strategy: Its product strategy of Chevron is lubricants, fuels and additives, and petrochemicals. They sell renewable sources of energy like Geothermal, fuel cells, Hydrogen, wind power, biofuel and solar.  
      2. Pricing Strategy: The Company does not believe in price taking rather than price making. The company is inclined by world per barrel dollar prices for fuel as it is the basis of pricing of the products of petroleum of the company (Chevron 2022c).
      3. Promotional Plan: Advertisement through television via highlighting the commitment of Chevron to decrease the environmental pollution. Promotion is carried out via the gas and filling stations. Collaboration with the motor companies like Toyota and General Motors is beneficial.

      Chevron Competitive analysis

      • 4P’s comparison with competitors: It will assist the organization to promote the marketing strategies like innovation, pricing approach, planning of promotion and others.
      • Product: It includes petrochemicals, fuels, lubricants and additives. They sell renewable energy sources. The business products of the company are aviation businesses, chemicals, base oils and process fuels, marine businesses and others. For aviation, the company supplies jet fuels and for the marine businesses, it delivers marine lubricants.
      • Price: The pricing strategy of Chevron is based on competition and it is monitored and influenced by the demand and pricing of the government.
      • Place: The Company provides its products to various places via proper transportation.
      • Promotion: the promotional strategy is print ads and other promotional strategies.
      • Strength comparison with the competitors: The Company has a strong global presence, strong brand value, diversified product portfolio, complete integration of processes, and increased use of technology to improve the frontier of energy.
      • Weaknesses in comparison with the competitor: Chevron is highly dependent on production, inefficient financial planning, and legal issues (IIDE 2022).
      • Organization’s competitive advantage: The competitive advantage of the company is increased demand for global energy, a promising market for renewable energy, partnering with the leaders to improve the low carbon technologies, and increased investment in the exploration programme.

      Key Success factors

       The key success factors of Chevron are a disciplined capital program, significant growth in the Permian, and delivery on financial commitments.

      Problems and Issues in Chevron’s Organization

      The major problem is the $22 billion cash pile of the company

      Financial Analysis

      794 MBOED was produced in 2021 from shale and tight resources. There were approximately $4.5 billion of the capital budget of the company in 2022 was focused on shale and tight resources. 2.6 million Net of the shale and tight resources was used for production and exploration (Chevron 2022b).

      Target Market Analysis

      i) Demographic Characteristics of Market: The demographic characteristics of Chevron are the oil and gas regions like deepwater U.S. Gulf of Mexico, West Africa, Offshore Western Australia in the US, Argentina and Canada.
      ii) Psychological Characteristics of the market: Increased demand for energy, pollution-free society.
      iii) Behaviours of the target market: The behaviour of the market divides the market based on knowledge of the product, attitudes, use of the product, and other responses to the product. Behaviour variable is a good point for starting to create the consumer segment (Chevron 2022e).
      iv) Strategies appealing to the market: Chevron participates in the functions in the petroleum industry that ranges from exploration and drilling to refining and generation of power. The outcome of the condition is being included in the top 25 on Forbes List. The company gets massive revenue and profit due to the increased mobility of the price of oil and prevented the deceased trend during the financial crisis.

      Conclusion of Chevron Case study

      Therefore, Chevron is the company that manufactures and sells high-quality refined products like diesel, aviation fuels, gasoline, lubricants and others to decrease pollution and meet the demands of energy. The company's aim is to fulfil the world's rising energy needs and create the improvements and innovations needed for a better quality of life. Chevron's mission is to create reliable, cheap energy that is ever cleaner and contributes to human progress. The business values partnerships that involve open communication and mutually beneficial outcomes. Chevron collaborates to find a solution that will benefit society and its stockholders. The company's goal is to uphold the highest ethical standards in order to gain customers' trust and respect.

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