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Royal Dutch Shell Case Study: Delving into the Energy Company's Legacy and Future

Explore the Rise and Challenges of a Global Energy Leader: Royal Dutch Shell Case Study

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Introduction

Shell Plc is mainly a global oil and gas company that has its headquarters in London and is a public limited firm with listing on London Stock Exchange or LSE. The company was established in the year 1907 based on the merger of Royal Dutch Petroleum Company of Netherlands and “The Shell” named Transport and Trading Company of the UK. The merged company is mainly a leading competitor of American Standard Oil and by the year 1920 Shell was able to become one of the biggest producer of oil and the oil-based products within the world. The company has further entered chemicals sector in the year 1929 and the company dominated global petroleum sector from 1940s and the mid-1970s. 

Introduction

Vision and Mission Statement of Royal Dutch Shell

The vision statement of Royal Dutch Shell states that “They make the difference through our people, a team of dedicated professionals, who value our customers, deliver on our promises and contribute to sustainable development.” The mission statement of Royal Dutch Shell states that “To safely market and distribute energy and petrochemical products while offering innovative value-added services.”

Vision and Mission Statement of Royal Dutch Shell

Royal Dutch Shell Situation Analysis

The situational analysis of Royal Dutch Shell is based on the different external and internal aspects that can provide details regarding changes that have taken place and their impact on the overall organizational operations. The reputation, size and levels of investments made by the company are major aspects that are considered to be a part of the situational analysis. The strengths and the weaknesses of the company and the strategies that have been developed for maintaining future operations are also discussed as a part of the situational analysis process. The difficulties that are faced by the company based on their international operations in different parts of the world are a part of the situational analysis framework. The other aspects that are a part of the situational analysis include research and development, rational segmentation and the diversification of products. 


Industry Structure and economic feature


The oil and gas industry is mainly considered to be the biggest sectors within the world based on dollar value and thereby generating around 5 trillion dollars as global revenues in the year 2022. Oil is considered to be a crucial part of the economic framework on a global basis as it impacts transportation, electricity, manufacturing and industrial production. The investors in various parts of the world have shown their interest towards entering the industry of oil and gas. The production process of oil and gas is considered to be a multi-stage method that is quite complicated in nature and has an impact on the strategies being implemented by the organizations. 


Royal Dutch Shell Strategic


i) Business Level Strategies 

The business level strategy of Royal Dutch Shell is mainly based on the ways by which the company aims at strengthening its position as a leader in the energy sector by offering the gas, oil and low carbon-based energy products to the customers. The aspects like social responsibility and safety are fundamental parts of the overall business approach implemented by the firms. The business strategy of the company is also related to the collaboration that Royal Dutch Shell can develop with the different stakeholders like the business partners, customers, governments and the investors. 

ii) Corporate Level Strategies

The corporate level strategy of Royal Dutch Shell is related to the outlook that has been developed by the company for energy sector and a chance that can be used by the company for grasping opportunities that arise from substantial changes within the world. The rise in living standards of the global population has led to increase in the demands for the energy-based products that are offered by the organization. The corporate strategy that has been formed by the company is thereby based on the ways by which it aims at reducing the impact of its products on the environment. Technological advancements that are a part of the industry can be used by the company based on its corporate strategy. 


Competitive Analysis and Advantage in the industry


The major competitors of Royal Dutch Shell in the oil and gas sector include Chevron Corporation, Exxon Mobil, Conoco Phillips, BP and Total. The competitiveness in the industry is considered to be huge and this has an impact on the profit margins and revenues gained by a company like Royal Dutch Shell. The overall position that Royal Dutch Shell has developed in the oil and gas sector is mainly related to the variety of products that are offered to the customers and the large customer base that was maintained by the company. 


SWOT Analysis


i) Strengths

The brand value of Royal Dutch Shell is quite high and the company has also formed a strong equity of the brand. The financial position being formed by the organization and huge financial growth is also an important strength that has been developed by the company. Royal Dutch Shell has its presence in more than 90 countries and the operates 44,000 stations. 

ii) Weaknesses
 
The major weakness of the brand is based on the legal issues and lawsuits that have been faced by Royal Dutch Shell in the industry. The controversy that the company faced regarding over stating of the oil reserves had a major negative impact on its image. The environmental issues and human rights issues also degraded the image of Royal Dutch Shell and the value that was gained by the brand. 

iii) Opportunities 

The opportunities that can be used by Royal Dutch Shell are mainly related to the acquisitions that can be made by the company for the purpose of buying out the competition that exists in the market. The increasing demands for fuel can also provide major growth opportunities for the company. 

iv) Threats

The threats that can be faced by Royal Dutch Shell are based on the government regulations, high levels of competition, economic instability and the environmental laws. The prices of the products and the revenues that the company can gain are highly influenced by the various external factors that are a part of the environment. 


PESTLE Analysis


Political factors – Royal Dutch Shell has its operations in various countries and the government policies and capacities are different based on which the company can aim at developing the strategies. The political unrest in different companies can affect the operations and revenues of the company. 

Economic factors – Economic aspects can affect the operations and decisions made by Royal Dutch Shell and the countries that offer high rates of interest can attract the firm for making investments. 

Social factors – Social factors that are mainly based on the cultural aspects and norms can influence the types of products that can be offered by Royal Dutch Shell. 

Technological factors – The technological advancements in the different countries have increased the importance of social media for marketing and promotional activities of Royal Dutch Shell. 

Environmental factors – The growth in concern related to global changes in climate and increase in levels of pollution are considered to be major environmental aspects that influence the strategies of the company. 

Legal factors – The laws related to anti-discrimination and human resources influence the strategies of Royal Dutch Shell. 


Target Market Analysis of Royal Dutch Shell


i) Demographic Characteristics of Market 
    The customers of Royal Dutch Shell belong to various age groups who require the high-quality oil-based products.

ii) Demographic Characteristics of Market 
The customers of Royal Dutch Shell belong to various age groups who require the high-quality oil-based products.

iii) Psychological Characteristics of the Market 
     The psychological characteristics of the target customers of Royal Dutch Shell are related to their personality and the overall emotional state depicted by them towards the products being offered to them. 

iv) Behaviours of the Target Market 
    The target market of the company is focussed on the oil products. 

v) Strategies Appealing to Market
    The growth strategy of Exxon Mobil appeals to the market.      


Marketing Mix of Royal Dutch Shell


i) Product Strategy (Product Mix) 

Royal Dutch Shell offers its products that are related to various areas of the oil and gas sector. The four groups among which the products of the company are divided include downstream, integrated gas and the new energies, upstream, technology and projects. The various products that are offered by the company include Shell Sulphur Solutions, lubricants, Shell Chemicals, Shell Fuel Cards, Marine, Commercial Fuels, Aviation, Shell for Suppliers, Shell Liquefied Petroleum Gas or LPG, Shell Global Solutions, Shell Bitumen, Shell Eco-marathon, Deep Water, New Energies, Natural Gas, Shell Fuels, Shell Engine Oils, Shell Lubricants, Shell App and Shell Credit Cards. 

ii) Pricing Strategy 

The variable pricing strategy is used by Royal Dutch Shell as the company mainly deals in the different services and products. The product prices are mainly dependent on value that is provided to the customers. The company has gained its position as the leading brand within the world based on some of the products that are offered to customers at competitive prices. 

iii) Promotional/ Advertising Plan

The brand name that has been formed by Royal Dutch Shell is mainly based on the promotional activities performed by the company. Marketing strategies adopted and implemented by the company have played an important role in ensuring that the company can develop its position in the industry. The social responsibilities have also been fulfilled by the company effectively and the company has worked diligently towards the reduction and reusage of waste generated by the production and manufacturing process. The company uses various types of media for its promotional activities that include social media, digital media, print and advertisement media, television and magazines.  


Royal Dutch Shell Competitive Analysis


i) 4Ps’ comparisons with competitors – 

ii) Product – Similar products are offered by the competitors of Royal Dutch Shell and are able to fulfil needs of customers. 

iii) Price – Competitors of Royal Dutch Shell have implemented similar pricing strategies for gaining revenues in the industry. 

iv) Place – The distribution and supply chain of the competitors are more effective in comparison to the distribution of Royal Dutch Shell. 

v) Promotion – The promotional activities of the competitors are able to provide major levels of revenues to them and have reduced the profits gained by Royal Dutch Shell in the highly competitive industry. 

vi) Strengths’ comparisons with competitors 
    Research and development are done by competitors. 

vii) Weaknesses’ comparison with competitors 
    Lawsuits are not always faced by other companies. 

viii) Organization’s Competitive Advantage
    Competitive advantage of Royal Dutch Shell is based on large portfolio of products. 


Key success factors


The major success factors that have led to formation of an effective position of Royal Dutch Shell are mainly related to the brand name and value that has been gained by the company in the energy sector. The competitive advantage is based on the various types of products that are offered to the customers and the ways by which their needs are fulfilled. 


Problems and Issues in Royal Dutch Shell Organization


The lawsuits and unethical practices are major issues in Royal Dutch Shell. The huge negative impact that the company can have on the environment is also considered to be an issue that Royal Dutch Shell is facing based on the manufacturing of its products in the industry. Moreover, the lack of sustainability in the business operations and negative image in the sector is also a major factor. 

Financial Analysis

The total revenues that have been gained by Royal Dutch Shell in the energy sector are around 261.5 billion dollars. The revenues of the company have increased in the last few years based on the increase in demands for fuel and the other products of the company.

Conclusion

The overall success that was gained by Royal Dutch Shell was mainly based on the revenues and profit margins of the company in the highly competitive environment within the energy sector. The competitive energy sector is considered to be a major aspect that has led to success of the company. 

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