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Within this post module assignment, based on the learnings of this module, the author intends to present reflections on and outline how he might contribute to a strategic initiative within his organisation.


XXX Oil is an independent Irish marketing and distribution organisation for branded petroleum products. Campus Oil markets and distributes oil products through three primary channels;


Direct to Consumer (DTC) – servicing circa 120m litres to both the Commercial and Domestic sectors from seven owned distribution depots along the Eastern Seaboard.
Retail – supplying circa 50m litres to thirty privately owned and four company owned branded service stations under contract or licence.
Wholesale – supplying circa 80m litres to re-sellers of oil products through Authorised Branded Distributors and Independent Distributors.

Requirement – how I might contribute to a strategic initiative within my organisation. 

Challenges Faced by XXX Oil Company

The main strategic challenges organisations face today are falling profits, sustainability challenges and the need to strengthen the market position which is in turn limited by the limited resources. These challenges are more prevalent among the small and medium sized companies which are under continuous threats from the large multinational companies. The paper would delve into these three challenges against the backdrop of the given case study. The assignment would analyse the issues faced by XXX Oil company according to the case study and seek to propose ways which the company can take to improve the business returns in its three division namely, Direct to customers (DTC), retail and wholesale.  The assignment would point out how one strategy would lead to the other and they would together help XXX to strengthen its market position and gain sustainability. The strategies are divided into processes, contents and feedback and learnings from the processes. The blue sections would signify processes, green the contents and orange the feedbacks and learnings, which would also include the business gains of the firm by adoption of the processes.

Strategies of XXX Oil to increase its market leadership and achieve sustainability:

The above case study shows that XXX Oil aims to enhance its market leadership and achieve sustainability by both financially and environmentally. The company can adopt the following strategies to achieve this aim:

The first strategic process decision which firm can take is to form an aggressive marketing initiatives boost the demand for the DTC products among customers and consequent revenue generation. The case study mentions that XXX is not sustainable and aims to gain sustainability in the next three years which forms the first strategic challenge facing the firm. The oil firm must use marketing process as a powerful tool to gain sustainability, both financially and environmentally. The process should involve aggressive promotion of its existing products on the written media like industrial magazines and digital media. The content of the advertisements should consist of the salient features and market advantages of XXX which the suppliers and the customers can take advantage of by conducting business with the firm. The case study clearly shows that the volume of oil products fell by 17 percent and the earnings before interest, taxes, depreciation and amortisation (EBITDA) fell by 65 percent. The demand for the products were stemming from building construction and home heating market. This shows that the market of DTC products was very narrow and not sufficient to generate revenue for the firm to gain sustainability in the next three years. Thus, the first strategic initiative which XXX can take to pave way to attain financial sustainability and market leadership is marketing its products.

Strategies to Enhance Market Leadership and Achieve Sustainability

The firm in order to counteract the impact of recession and reducing EBITDA should expand its market in industries like automobile industry which consume oil in large volumes. This would boost its revenue generation which it can use to grow in organic market. This would help the company supplement operational efficiency and online presence to gain sustainability in the market, thus retaliating the second challenge the firm is facing.  

The third challenge is to increase capital investment to hold on to the present market position, though it very weak. It is clear from the point of view of the company that the present market size and revenue generation are not sufficient to meet the third challenge and inject capital. This once again points out that the company should use marketing as a strategic tool to boost its revenue generation which it can channelize towards strengthening its market position. The feedback and learning from the process of marketing which XXX can gain is that it can come to know about new demands and preferences of customers. The firm can learn from the feedback from its marketing activities about new business opportunities like start-up companies with whom it can partner with to expand its business.

XXX Oil Company should enter into the process of open innovation to strengthen its line of products and ultimately its DTC line of business (LOB). The case study points out to the weak position of the oil firm. The firm must enter into open innovation with other oil firms to generate better oil products to the customers. The fall in EBTDA clearly shows that dwindling revenue generation of the firm before its competitors. The content of the process would be XXX entering into open innovation either with other oil companies in Ireland or with firms from different industries. Entering into open innovation would allow the firm to get access to the resources like knowledge and markets which other firms possess. The firm in the initial can exploit the resources of the partner firms to bring about improved products for its DTC LOB and create its new customer base. Then as it gains strength due this expanding market and resultant generation of revenue, it can break away from its partner and introduce its own line of products using the knowledge it has gained from the partnership. This improved product strategy would in fact, strengthen its marketing objectives as it would the firm to market its products. Thus, feedback from open innovation consisting of new cost-effective operation methods can help the firm to revive its weakening market position and revenue generation. In fact, XXX Oil should learn to combine open innovation and marketing to release new versions of existing products in the market to attract new customer base and strengthen its market position.

Process 1: Aggressive Marketing Initiatives to Boost DTC Products

The following are the strategies which XXX Oil can use to strengthen its organic market:

XXX can restructure its investment processes and strategies to boost its return on investments. The ROI revival process can consist of the firm use its expansion strategies to enter new market and invest in new asset classes within Ireland. For example, the process can consist of investing in other currencies would allow the firm to diversify the loss it would suffer by fall in value of Irish pounds. The firm as a part of content of its new investment policies can look forward to enter new markets with improved versions of its existing products. The firm can enter derivatives markets and invest judiciously to earn maximum ROI. The firm can enter oil hedging markets to obtain oil at lower prices and sell it at higher prices to gain maximum profit on its hedging. As a feedback from this investment strategy, XXX should be gain information about new emerging asset classes where it can channelize its financial capital to maximise its returns on investments.

The next strategic process of XXX Oil firm should take to gain sustainability, increase its operational effectiveness and revenue generation is restructuring of plants and machinery. The case study clearly shows that sustainability is of utmost importance for the oil firm to operate more efficiently. The content of the new strategic process of the firm should consist of channelizing a portion of revenue it would generate from investment strategies towards acquiring modern plant and machinery which are capable of operating by using less fuel. These new pieces of machinery should be able to process and produce more products say, producing more packages of oil. The feedback from this strategy would increase the operational efficiency of the firm manifold which would enable it to serve more DTC, suppliers and wholesalers. This would help the firm to boost its Irish business operations and simultaneously generate revenue from its foreign market operations. The company should in fact shift towards production of oil as a part of its restructuring plant and machinery strategies. This would end the dependency of the firm on the other oil manufacturing firms for its products and would be able to distribute its own products. Thus, with its expertise it distribution and newly gained production capacity, the firm would be able to increase its revenue generation and become more self-sufficient. Thus, investing in new plant and machinery would enable the firm to become sustainable and operate more efficiently. The firm would in fact, be able to align its production and distribution businesses of oil products, thus, increasing its efficiency.

Process 2: Expansion in Industries like Automobile Industry

Technological advancement is the third strategy which the firm can adopt to strengthen its organic product market. The above discussions recognise five strategies namely, marketing, open innovation, advancement of plant and machinery and starting its own production.  The appropriate strategic process would require open innovation not only in terms of existing products (as already discussed) but also in terms of new organic products which it wants to strengthen. Moreover, the Irish business process would require the firm to coordinate between new and old Irish business units. Producing organic fuel would require the firm to continue research and development (R&D) with the firms leading the market. Adopting new plant and machinery would also play a role in its organic products line expansion which means that the firm requires maintaining steady communication with the machine suppliers. This means that the firm should adopt an advanced communication to be able to coordinate with these increasing markets and business partners like modern machinery suppliers. Advanced communication systems like cloud would allow the apex management and the middle level managers share information with other firms especially the ones operating in organic fuel market. The feedback and learning from this process would be better integration of its business operations in Ireland with its foreign business operations and existing inorganic product line with its new product line, thus gaining operational efficiency. This shows that adoption of modern operations like modern machinery would help the company gain operational efficiency.

The previous strategies clearly point out towards the fourth strategy which XXX Oil must adopt to boost its operational efficiency and gain sustainability. The case study remains silent about the employee conditions or performances. However, one can easily interpret the poor organisational performance and falling earnings as result of low efficiency of employees. The apex management of XXX should consider empowerment processes of its employees as a way to its market success and train them to operate in the modern systems. The empowerment process should contain training and mentoring highly performing employees to handle more business responsibilities. The content of the empowerment process should consist of technical training, business training and product training. The business training should further be divided into communication sharpening training, leadership training and customer relationship training. The apex management should empower employees to take decisions and impart them with required knowledge and skills. Moreover, the firm’s employee empowerment activities should also contain training its employees to produce the new organic products by operating the machineries. The firm must align the employees with the newly suggested strategies like adoption of advanced modus operandi. The feedback from the empowerment strategy should be that the employees should developing learning and skills to handle modern machineries. The employees should be trained to operate on modern machineries and modern communication system. These employees would learn and apply new techniques, skills and competencies to manage the extended business of the firm within Ireland. Thus, the feedback from training and empowering process of employees would be employees gaining more efficiency to operate by using its extended decision making system. It can also be stated that not empowering new employees to take decisions would strain the existing decision making machinery of the firm, thus impeding successful and long term adoption of the strategies discussed previously.

Process 3: Open Innovation to Strengthen DTC Line of Business

The following are the financial strategies which XXX Oil can adopt to boost its operations, strengthen sustainability and catapult its revenue generation:

The first financial strategic process which XXX can adopt is acquisition and mergers in Ireland. The case study points out that the apex management already eyes acquisition and merger strategy as a solution to the firms falling ROI and market position. However, the stagnant market of Ireland prevents the firm from adoption of the strategy. It is clear from the above discussion that the successful adoption of the above strategies would boost the revenue generation of the firm. Thus, it can counteract the existing stagnant market and channelize the newly earned revenue towards acquiring firms from different industries. The firm in fact, to strengthen its organic product can acquire firms already in the organic fuel market. The feedback from the acquisition process would increase in the knowledge base of XXX since it would be able to utilise the market expertise of its subsidiaries to boost its own production, thus generating more revenue and increasing its ROI. The firm can use the newly acquired knowledge to outsource its allied business activities like packaging of products to these firms and concentrate more on manufacturing of organic and inorganic oil and marketing them in Ireland. Thus, acquisition and merger would not only help XXX to strengthen its organic product line but also diversify its allied business and concentrate more its new core business, manufacturing. Thus, it would become operationally more efficient, profitable and sustainable. The management would be able to learn and enter new industries which can emerge into revenue earning segments in the future.

The next financial strategic process which the XXX can adopt to strengthen its ROI and revenue generation is market development by focusing on developing new versions of its existing products. The case study shows clearly that the market is limited to building construction and domestic home heating markets. The demand for oil in the construction companies vary according to the number of ongoing construction projects whereas among the home heating customers, the demand rises in the winter and falls in the summer. It is clear that the company cannot rely on these two markets solely to strengthen its revenue generation. Moreover, its new organic products are in introduction stage which means, they are not capable of generation huge revenue to ensure the firm’s sustainability. The content of the product development process of the firm would be to recognise new market segments with its existing products within Ireland. The new customers segments can be markets like industrial heating market which use heating to carry out their manufacturing activities. The feedback from these new markets would help XXX to develop its existing products further to serve newer market segments. These new markets would generate continuous revenue for XXX Oil firm on hand and mitigate the losses the firm suffers due to fall in demand in its existing markets on the other hand, thus providing it with strong revenue base. Moreover, serving an expanding base of customer segments would boost the goodwill of the firm and help it attract investments. Thus, this strategy would render it financial strength and sustainability.

Process 4: Restructuring Investment Processes to Boost ROI

XXX Oil firm should monitor the above mentioned strategies and their outcomes on regular basis to ensure that they are appropriate and enable the firm to meet its strategic challenges. For example, positive customer ratings for particular products would indicate the products are capable of attracting huge revenue and the firm can also introduce these products in the new market to generate high initial return. Again, low rating for a product would direct the company to carry on open innovation to improve the product. Dwindling numbers of stars for a particular product would indicate that the firm should either reintroduce the products in new forms or withdraw them from the market and introduce new products. Both these strategies would require open innovation and marketing support. Thus, review of the strategies and their outcomes based on customer parameters like customer ratings would enable XXX to restructure its initial market strategies. Again, feedbacks from investors would enable to gain information about their expectations like dividends and returns from it. Thus, once again it can be pointed out that the firm can use feedbacks from stakeholders like investors and customers to restructure its strategies in crucial areas like marketing and finance. This continuous stakeholder support and restructuring of business strategies would enable the firm to adapt to newly emerging market conditions and take advantage of them. This would enable the firm to boost its ROI and gain sustainability in the market.

Strategies

Objectives

Expected outcomes

Marketing

Entering new customer bases

Generation of more revenues, gaining competitive advantage

Open innovation

Introduction of new products and improved versions of existing products

 New market penetration within Ireland.

Restructuring of investment options

More ROI

Financial strength and diversification of business risks.

Restructuring plants and machineries

More productivity

Enhanced revenue generation

Technological advancements

Integration of business operations

Enhanced communication and better decision making.

Empowerment of employees and training

Enhanced employee performances

More productivity and revenue generation

Acquisition and mergers

Access to new resources

More productivity

Market development of existing products

New consumer base

More revenue generation

Continuous monitor the above strategies and feedback of stakeholders

Appropriate decision making

More efficient business

The following are the important participants in the above strategies which XXX Oil firm would make:

The apex management body of XXX Oil firm would take the financial decisions regarding the strategies which the firm would adopt to strengthen its market position. The management plays the significant role of synthesising the information gained by the middle and lower level to form strategies. This shows that the management plays a crucial role in the strategic planning of XXX Oil.

The employees act in two capacities which enable the management form the strategies. First, employees being in direct contact with the market gain strategic information and communicate it to the upper levels of the organisational pyramid. Again, they execute the strategies made by the upper level management. The employees function as critical machinery for successful execution of strategies.

The consultants provide the firm with valuable information and propose suggestions in business areas like modernisation of machineries which contribute towards boosting productivity. The consultants would also act as important agents of changes and counsel the employees and help them to embrace changes in operations. Thus, consultants act as important participants in the strengthening of market positions and revenue generation of XXX Oil.

The customers play significant role in strengthening the market position and revenue generation. The customers buy the products and generate revenue for the firm. Moreover, they provide the firm with valuable feedback which can direct the later to bring about changes in the products according to their preferences. Providing of products according to customer preferences would enable the firm generate more revenue and attract more customers, thus gaining more financial strength and market position.

The government lays down policies and frameworks which provides base for XXX Oil to function. Moreover, government makes laws to protect the intellectual property rights of the firm which earn it product differentiation in the market. This shows that governments also play important roles in market strengthening strategies of the firm.

The competitor firms would make strategies which would in turn encourage XXX Oil to form its own strategies to counteract the strategies of the former. Thus, competitor firms contribute towards strategy making and market strengthening activities of XXX Oil in an indirect way.

Conclusion:

The above discussion shows that XXX Oil must take strategies to counteract its falling revenue generation power, weakening market position and strengthen its new product line. Counteracting these challenges would require the firm to adopt several strategies. First, it should market its products to boost its revenue generation. Second, it should enter into open innovation with other firms to offer new products. Then it must combine financial strategies like acquisition and merger to gain access to resources of other firms. These strategies should be supported by advancement of plants and machinery and providing training to the employees. The firm should enter into partnerships with the emerging firms to continue business and also open innovations to better its existing products. XXX must also look forward to hedge in the oil market to gain buy oil at low rates and sell it at high rates. This would capacity to hedge would significantly improve the ROI the firm would earn. It must use these techniques to gain financial sustainability. It can also invest more money to strengthen its weaker products and increase their revenue generation power.

Cite This Work

To export a reference to this article please select a referencing stye below:

My Assignment Help. (2020). Strategies For XXX Oil To Increase Market Leadership And Achieve Sustainability. Retrieved from https://myassignmenthelp.com/free-samples/mba717-strategic-development-of-business.

"Strategies For XXX Oil To Increase Market Leadership And Achieve Sustainability." My Assignment Help, 2020, https://myassignmenthelp.com/free-samples/mba717-strategic-development-of-business.

My Assignment Help (2020) Strategies For XXX Oil To Increase Market Leadership And Achieve Sustainability [Online]. Available from: https://myassignmenthelp.com/free-samples/mba717-strategic-development-of-business
[Accessed 19 June 2024].

My Assignment Help. 'Strategies For XXX Oil To Increase Market Leadership And Achieve Sustainability' (My Assignment Help, 2020) <https://myassignmenthelp.com/free-samples/mba717-strategic-development-of-business> accessed 19 June 2024.

My Assignment Help. Strategies For XXX Oil To Increase Market Leadership And Achieve Sustainability [Internet]. My Assignment Help. 2020 [cited 19 June 2024]. Available from: https://myassignmenthelp.com/free-samples/mba717-strategic-development-of-business.

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