This is an analysis of the Royal Dutch Shell Group (RDSG for brevity, or subject company, used interchangeably in this paper). The analysis will focus on the internal and external environmental factor that affect or has an impact to the subject company.
The analysis that will be used by the company is the PESTLE analysis. This framework analysis will establish a more detailed examination on the possible impacts of the factors that have been affecting the conduct of the business of the subject company. The difference of this analysis with the first is that the former is more in general but the latter is more specific as to the criteria of the factors that affect the subject company.
In addition, this paper will first provide a brief background as to the RDSG in order to give the readers information as to the way the company has been conducting its business. A conclusion will end this paper, taking into consideration the key points discussed.
ROYAL DUTCH SHELL GROUP
RDSG is a global group of energy and petrochemical companies, with 104, 000 employees in more than 110 countries. It is considered as the second largest private sector energy sector corporation in the world and one of six “super majors”. The company’s headquarters are in The Hague, Netherlands.
The subject company plays a key role in helping meet the world’s growing demand for energy in economically, environmentally and socially responsible ways. Forbes Global 2000 in 2007 ranked the subject company as one of the eight largest companies in the world. In 2007, Fortune magazine ranked the subject company as the third-largest corporation in the world.
The subject company’s strategy and priorities for the future are “more upstream and profitable downstream”. The subject company gives focus on the delivery and growth, leveraging it a strong portfolio. Last March 2008 the subject said that in the investing in new heartlands for the company, it has been rejuvenating its portfolio for a world of higher and more volatile commodity prices, increased competition, and higher costs.
According to Hovers (2008), Royal Dutch Shell (formerly known as Royal Dutch or Shell Group) is an oil and gas company. The company has worldwide proved of reserves of 11.9 billion barrels of oil equivalent. The company’s oil giant’s crude are produced in Nigeria, Oman, the United Kingdom, and the United States. The company also produces refined products, and chemicals; transports natural gas; trades gas and electricity; develops renewable energy resources. It operates 46,000 gas stations, which is considered as the world’s largest fuel retail network.
The subject company did not just put matters on the hand of time, but it also make it a point that it plans ahead the future to provide a more comprehensive conduct for the business to flourish. The company will not suffer incase any inevitable circumstance will happen because the company has made some contingency plans in order to enable the company to progress and counter any downfall.
This section will use the PESTLE Analysis. According to RapidBi (2008), pestle stands for political, economic, social, technology, and environmental factors. These factors are beyond the control and influence of a business, however, it is important to be ware of when doing product development, business, or strategy planning.
The potential impact column in the table will provide for a certain grade in order to give the readers a good illustration. The column for the implication and importance will be evaluated as to its positive or negative impact; as to whether the impact will be increasing or not; and also to determine the importance of such impact to the subject company. After the presentation of the table, the writer will provide an explanation.
PESTLE Analysis Factors
Implication and Importance
H – High
M – Medium
L – Low
U - Undetermined
1) Wars and conflict
2) Government Policies
4) Governmental leadership
5) Government Structures
6) Political Trends
Any action of the government of any country or state will be considered as to have a high impact to the subject company.
1) Home economy trends
2) General taxation issues
3) Market and Trade Cycles
4) International Trade and monetary issues
5) Job growth/unemployment
6) Interest and Exchange rate
7) Internal Finance
8) Internal cash flow
The economic factor also has an overall high impact in the conduct of the business of the subject company because the stability of the economy of a state will determine how the consumers will be able to consume energy products.
1) Consumer buying patterns
2) Ethnic/religious factors
3) Advertising and Publicity
5) Living Standards
9) Consumer attitudes and opinions
10) Media views
11) Brand company and technology image
12) Earning Capacity
13) Staff Attitudes
14) Management Style
15) Organizational Culture
The social factor has medium impact because it is perceived by the author that the drive of the consumers to acquire the products of the subject company because emotions or social factors has nothing to do with this kind of need of the consumers.
1) Research Funding
2) Maturity of Technology
3) Information and communications
4) Intellectual property issues
7) Software Changes
The technological aspect is important to the subject company because the changes of technology will determine on how the company will be able to progress its business conduct.
The political factor has a high impact to the subject company because the state to which one of the branches of it is situated will be the determination as to whether the company will be able to survive the feats of the politics within. The company must be able to conduct in the manner that it must also correspond to the laws of such state and must deviate to any norms.
The second factor is the economy. The economy of a state will determine the stability of the success of the company. The economy will be the factor that will matter as to whether the subject company will be able to attract investors or stockholders. In addition, the security of the economy will also determine as to whether the economy will be able to attract consumers.
As the technology will progress, the law must not in any way hinder its development however, the development must be related to the protection of the environment. Hence, the subject company will be able to succeed if the whole company will act in cooperation of the state to where it is situated.
The factor that has least impact to the company is the social factor. This is considered as to have the low impact because the use of energy products by the consumers is not determined on any influence coming from the society but from the way, it needs the energy products.
The writer therefore concluded that the internal and external factor that may have an impact to the subject company is determined by the way the company will be able to battle it all out in the process. The company however has been progressive in the way it conduct its business because it has a program of innovation to make its end meet the ends.
RAPIDBI, (2007), PEST/PESTLE Analysis Tool and Template, retrieved at < http://www.rapidbi.com/created/the-PESTLE-analysis-tool.html> 18 September 2008.
Royal Dutch Shell Group, viewed 18 September 2008, < http://www.shell.com/>.