Royal Dutch Shell
Introduction
Royal Dutch Shell plc (Shell) is one of global leading energy and petrochemical companies. Its foundation dated back to 19 Century but it fully formed after merger of Royal Dutch and Shell Transport in 1907. Now, Shell, headquartered in The Hague, operates in more than 140 countries or areas and employs approximately 87,000 staffs. Shell businesses expand from upstream to downstream: it is engaged in exploration, production, refining, transportation and retailing of gas, oil, oil derivatives, electricity and chemicals; the company is also interested in global energy innovation such as renewable sources of energies.
However, Royal Dutch Shell has been struggling to capture investor’s imagination after 2009 (Shell Annual Report, 2012). Although revenues and profits had recovered, Niger Delta and North Sea oil spilling almost destroyed Shell’s revival dream. The recent figures are still disappointing: Shell suffered more than 30 per cent drop in profits in recent successive quarters (2nd Quarter Unaudited Results & 3rd Quarter Unaudited Results, 2013). What are the factors to Shell’s loss? Is that caused by Financial Crisis or European Debt Crisis? Or caused by Oil Spill? Or caused by deep business environmental changes?
Identifying Challenges
Analysis should start at the general to focus down, called outside-in analytical framework (Angwin et al, 2011). The interaction of an organisation with external environment is decomposed into macro-environment influences, meso-environment influences and micro-environment influences. Macro-environment analysis assesses the stability and complexity in energy industry. Meso-environment analysis focuses on competitive arena; more specifically, it reveals interaction and power of Shell with other main market components. Micro-environment analysis shows competition position in energy industry: it identifies and compares performances of global energy giants. However, the largest degree of influence is from focal
Royal Dutch Shell plc (Shell) is one of global leading energy and petrochemical companies. Its foundation dated back to 19 Century but it fully formed after merger of Royal Dutch and Shell Transport in 1907. Now, Shell, headquartered in The Hague, operates in more than 140 countries or areas and employs approximately 87,000 staffs. Shell businesses expand from upstream to downstream: it is engaged in exploration, production, refining, transportation and retailing of gas, oil, oil derivatives, electricity and chemicals; the company is also interested in global energy innovation such as renewable sources of energies.
However, Royal Dutch Shell has been struggling to capture investor’s imagination after 2009 (Shell Annual Report, 2012). Although revenues and profits had recovered, Niger Delta and North Sea oil spilling almost destroyed Shell’s revival dream. The recent figures are still disappointing: Shell suffered more than 30 per cent drop in profits in recent successive quarters (2nd Quarter Unaudited Results & 3rd Quarter Unaudited Results, 2013). What are the factors to Shell’s loss? Is that caused by Financial Crisis or European Debt Crisis? Or caused by Oil Spill? Or caused by deep business environmental changes?
Identifying Challenges
Analysis should start at the general to focus down, called outside-in analytical framework (Angwin et al, 2011). The interaction of an organisation with external environment is decomposed into macro-environment influences, meso-environment influences and micro-environment influences. Macro-environment analysis assesses the stability and complexity in energy industry. Meso-environment analysis focuses on competitive arena; more specifically, it reveals interaction and power of Shell with other main market components. Micro-environment analysis shows competition position in energy industry: it identifies and compares performances of global energy giants. However, the largest degree of influence is from focal