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Background and Project Problems

Describe about the Challenges And Solution For United Petroleum Seaton.

United Service Station is an Australian petrol and convenience company that offers premium quality fuels at competitive prices. United Petroleum is among the fastest growing firms in Australia.  The company deals with the wholesale and retail sale of fuel, ethanol generation, and convenience stores all over the country. Moreover, the company creates employment for over 2,500 Australian citizens (Unitedpetroleum.com.au, 2016). The company was established in 1993 with a chain of convenience stores in South Australia but subsequently expanded its services to the rest of Australia. This project will focus on United Petroleum Seaton station analyze its challenges and the recommended solutions.   

United Petroleum Seaton faces challenges due to increased competition that has led to shrinking profits margins. According to Corrigan, (2016) the energy section is very volatile industry due to the unpredictability of the global oil prices. Ideally, economic weakness, alternative forms of energy, tough fuel regulations, and development of efficient engines contribute to the problems faced by United Petroleum Seaton. In addition to this, the discovery of new reserves and regions affects the market due to surplus supply to a diminishing demand. According to the United States Energy Information Administration, the amount of oil supply in the year 2014 was twice the global consumption (Aip.com.au, 2016).

Expected Outcomes

This project intends to find out the factors that contribute to the decreasing profits and shrinking margins of United Petroleum Seaton. Thus, at its completion, the projects can offer solutions on how to make the internal operation of the company efficient, productive, and cost effective. Moreover, the projects can offer the company with other development options based on its income and capability. In addition to this, the projects intend to increase the productivity of the company through cutting the cost of operations and increasing productivity. 

Expected Benefits

The major benefits expected at the completion of this project include;

  • 13 percentage increase in productivity
  • Reduction in the cost of production
  • 15 percentage increase in market share

The effectiveness of the projects can be assessed by checking the productivity of the company, analyzing the cost of production, and comparing the profit margins of the company.  According to Sullivan, (2011) internal efficiency can enable a company establish a compensation scheme that is in lie with the current trends in the market and other factors that can minimize cost and increase the productivity of the firm.  

Project Plan

Before the start of the project, the researcher will seek permission from the company to conduct an analysis of its internal operations. 

Expected Outcomes

After getting permission, the researcher will design the procedure for analysis of the operations and external environment of the company (half a week).

Then the researcher will request for internal operations data and procedures for the company (half a week).

Conduct an internal analysis of the internal operations in united petroleum Seaton to ascertain the problems associated with the internal operations of the company. The internal analysis of operations can take up to one week.

After internal analysis, the researcher will conduct an external environment analysis, which can also take up to one and half weeks.   

Then the researcher will interview the manager and head of departments to find out their development aims and how they aim to achieve them. The interviews will take a week.

The researcher will then analyze the information using techniques like MOST analysis, PEST analysis, and SWOT analysis to design recommendations and solutions for the company. The analysis can take up to one week.       

Methodology

This project will utilize qualitative research design to investigate the factors affecting the productivity of United Petroleum Seaton and the solutions to the outlined problems. A qualitative research design is usually based on social constructivism in that it entails a small number of samples and data collection is conducted using observation, interviews, archival materials, and analysis certain attribute of the subject of investigation. Moreover, qualitative research design can allow the researcher collect statistical data and relevant information, and interview respondents to get an insight of the problem (Ortiz, 2007). This study will utilize interviews to collect data because interviews can enable the researcher understand the operations of the company from the managers and head of departments who will participate in the study.

Analysis

The analysis of internal business process will be conducted using the most analysis. This analytical tool analyzes four factors namely, mission, objectives, strategies, tactics.

·         The mission analysis will be conducted by comparing the progress of the company with its set goals to find out if any improvements can be made to make the company more productive.   

·         The objective analysis will be conducted by analyzing the goals the company wishes to attain in the market. This can help the researcher ascertain if the company has realistic goals in the market.  

·         The strategies analysis will be conducted by analyzing the methods utilized by the company to achieve its goals in the market. This can help the researcher find out if the business is productive to its capacity.

Expected Benefits

·         Lastly, the tactics analysis will be conducted by analyzing the methods the company to gain a competitive advantage in the market, which includes marketing and product differentiation among other tactics.

Additionally, the researcher will utilize the Political, Economic, Social, and Technological   (PEST) analysis to analyze the external environment of the company. The PEST analysis will outline the factors that affect the strategies of the company outside the business. Moreover, it is a determinant of the internal strategies of the company since the company must adhere to them while creating its mission, goals and strategies in the market.

·         Political environment: The political environment analysis can enable the researcher to understand the political and legal factors that affect the productivity and progress of the company.

·          Economic environment: This analysis outlines the economic factors that influence the operations of the company.

·         Socio-cultural environment: this analysis outlines factors like population growth, and the preference of the population, this can help the researcher come up with expansion strategies for the company.

·         Technological environment: this analysis outlines the technologies that can be integrated into the operations of the company to make them efficient (Yüksel, 2012).

Finally, from the PEST analysis the researcher can come up with a SWOT of the company that identifies the competitive advantage, threats, and opportunities that United Petroleum has on the market (Grašys&Vasilecas, 2014). 

After analysis of the internal environment of the company, the researcher find out that company was not productive according to its capacity and the productivity of the market. Among the major factors that contributed, to under productivity was lack of technological integration to make the internal process efficient. Moreover, the researcher ascertained that the strategies utilized by the company were not efficient in the market due to competition. On the other hand, the external environment analysis showed that government policies and shifting oil prices hinder the growth of the company. Thus, after analysis and comparison of the available resources, the researcher concluded that new technologies were necessary to reduce the cost of production and make its internal process efficient through reduction of inventories. Moreover, the researcher observed that there is need to change the external market approach to make use of its competitive advantage as an established company in the market.

Integration

To address the problem of under productivity and high cost of production the company can automate some of its internal processes to reduce human error thus increasing production efficiency. Moreover, the company can use new technologies to manage its inventories, this can help reduce losses incurred due to bulk inventories. Nonetheless, the company can diversify into other market and products to insure it from the shifting oil prices. Also diversifying can help the company increase its market share thus increasing productivity.

Costing

The following are the necessary cost elements of the projects:

Budget Item

Amount

Sub-Total

A

Personnel

Project administration and data analysis

$300

Administrative assistance, data analysis

$300

Total Personnel Expenses

 

$600

b

Direct Expenses

Transcription of interview tapes

$500

Total Direct Expense

$5,00

c

Travel

Traveling to location

$100

Total Travel Expense

$100

Total Expense

$1200

As discussed above, the suggested solutions can be validated by comparing the experience and outcome of other companies that have made their internal process efficient. However, united petroleum Seaton can observe it’scost of operations after integrating the above solutions to ascertain its effectiveness. This is because making internal operations efficient is aimed at reducing the cost of operations within the company.

List of References

Aip.com.au. (2016). Facts about Petrol Prices and the Australian Fuel Market. [online] Available at: https://www.aip.com.au/pricing/facts/Facts_about_Petrol_Prices_and_the_Australian_Fuel_Market.htm [Accessed 1 Oct. 2016].

Bhardwaj, A. (2016). Challenges and Solutions in an Upstream and Downstream Oil and Gas Operation. Global Energy newsroom. Retrieved 3 October 2016, from https://globalenergy.pr.co/65678-challenges-and-solutions-in-an-upstream-and-downstream-oil-and-gas-operation

Corrigan, J. (2016). 2015 Oil and Gas Trends. [online] Strategyand.pwc.com. Available at: https://www.strategyand.pwc.com/perspectives/2015-oil-gas-trends [Accessed 1 Oct. 2016].

Gillard, J. (2012). New Capabilities to Allow us to Prosper. Australian Journal of Public Administration, 71(1), pp.1-5.

Grašys, R. and Vasilecas, O. (2014). Analysis And Evaluation Of Business Process Simulation Tools. Mokslas - Lietuvosateitis, 6(2), pp.157-161.

Ortiz, D. (2007). Research Design: Qualitative, Quantitative, and Mixed Methods Approaches [Book Review]. Qualitative Research Journal, 6(2), pp.[205]-207.

Rahman, M., Shahbaz, M. and Farooq, A. (2015). Financial Development, International Trade, and Economic Growth in Australia: New Evidence From Multivariate Framework Analysis. Journal of Asia-Pacific Business, 16(1), pp.21-43.

Sabiroglu, I., Bashirli, S. and Qasimli, F. (2011). Creating a Favourable Deployment Mechanism of Oil and Gas Revenues with Regard to Volatile Oil Prices: The Case of Azerbaijan. Transition Studies Review, 18(1), pp.179-199.

Sullivan, D. (2011). Increasing Employee Productivity: The Strategic Role That HR Essentially Ignores | ERE. Eremedia.com. Retrieved 3 October 2016, from https://www.eremedia.com/ere/increasing-employee-productivity-the-strategic-role-that-hr-essentially-ignores/

Tisdell, J. (2011). Water markets in Australia: an experimental analysis of alternative market mechanisms. Australian Journal of Agricultural and Resource Economics, 55(4), pp.500-517.

Unitedpetroleum.com.au. (2016). United Petroleum. [online] Available at: https://www.unitedpetroleum.com.au/united/about-us [Accessed 1 Oct. 2016].

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[Accessed 01 March 2024].

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