Changes in the Business Environment of Shell and Subsequent Strategy

Changes in the Business Environment of Shell and Subsequent Strategy The main objective of this assignment deals with business environmental changes of â€Å"Shell Company† (Petroleum Company) from last 5 years. PESTEL analysis was applied in the following assignment, in order to present Shell Company’s present status in all aspects and the changes that have taken place in the company. Moreover, the various types of strategies formulated were outlined and discussed. Introduction An organization is an entity that provides goods and services to consumers who need or want them and it does not function in isolation. Therefore, it is imperative to identify and understand all the factors within its environment that could potentially affect it. The environment of a business is normally divided into two categories, the micro environment and the macro environment. Below we shall discuss in details what each category means. Micro-environment: Internal factors like suppliers, competitors and employees are volatile and influence transformation of a business process and often it leads to undermining the current balance within the system. Suppliers: A supply chain is a system of organizations, people, technology, activities, information and resources involved in moving a product or service from supplier to customer. www.overstockuniverse.com http://upload.wikimedia.org/wikipedia/commons/thumb/2/23/A_company%27s_supply_chain_%28en%29.png/300px-A_company%27s_supply_chain_%28en%29.png Company should have a social responsibility towards their suppliers, as they transform the natural resources and raw materials into finished goods which are delivered to the end consumers. They also play a vital role during product shortage. They are the combination of all types of business practice and ethics. www.overstockuniverse.com Customers: A  Client, buyer or purchaser, is usually used to refer to a current or potential buyer or user of the  products  of an individual or  organization, called the  supplier,  seller, or  vendor. Slogans for the Customer: â€Å"the customer is king† or â€Å"the customer is god† or â€Å"the customer is always right. www.rajputbrotherhood.com Competitors: Competition  is a  contest  between individuals, groups, nations, etc. for territory, a niche, or a location of resources. Competition arises whenever two or more parties strive for a goal which cannot be shared. Humans compete for  wealth, prestige, and  fame so that they met deep rivalries often arises over the pursuit of. Business is often associated with competition as most companies are in competition with at least one other firm over the same group of customers. Macro-environment: Decision making by managers are influenced by many factors that constitutes the macro environment in a business. The examples for the macro environment are Tax changes, trade barriers, demographic change and government policy changes. http://www.oup.com/uk/orc/bin/9780199296378/01student/additional/page_12.htm The fo llowing factors are: Political factors: Political environment is an unpredictable element which effect specific organizations badly due to instability in government and rules passed by the political parties. Factors like political stability in the country, party in power, ideology of government and foreign policy greatly influence the business in political environment of the country. Example: Indian Government restricted coca-cola sales during late seventies following policy of restricting the growth of multinationals in Indian markets. But coco-cola was allowed after some years under the New Industrial policy of 1991. Under this new policy, government liberalized licensing, imports and exports, inflow of foreign capital and technology on more liberal terms.