A Report about Commodities Trades Company Trafigura
Introduction
Trafigura as a multinational trading company involved in metals, oil and energy has stakeholders necessary in the organization and project management of the enterprise. Host governments work in conjunction with Trafigura with the goal of helping the country grow economically as Trafigura runs its profit-orientedservices. Permission of actiongranted by governments on the condition that the company will be a responsible business partner who follows every business rule and regulation of the nation. This paper, using SWOT as an analytical tool, will critically evaluate its position in the market and identify the roles played by Trafigura’s stakeholders in the context of the firm’s current business performance.
Stakeholders of the Company
Trafigura’s stakeholders include host governments, regulators, civil society, non-governmental organizations (NGO), owners, employees and customers. Each shareholder has specific obligations allocated to them to help the organization proceed with its operations.
1. Owners as stakeholders: One of the key stakeholders of Trafigura is its owners. These are the individual who would goes out of business if anything bad was to happen to Trafigura. Their main interests are making sure that all business ventures are successful and lead to profits. Trafigura collapse would occur when all the company operations all result in losses. It is, therefore, important that owners make the correct business decisions that lead to profits and assuring the successful thrive off the company. Competing priorities that stakeholders have in a business are profit acquisition with ventures and public relations.
2. Customers as stakeholders: customers are the most important stakeholders. They are crucial for the company’s existence. Proper relations with clients should be maintainedso that Trafiguracan get enhanced returns from sales to customers. This is achievedby making sure that customers experience low trading costs and value for many of goods purchased. Employees’ roles asstakeholdersis to ensureconstant output is generated from company inputs in levels that make the business venture affordable.
3. Regulators as stakeholders: Regulators as stakeholders are responsible for setting the limit of operation. This covers issues like safety, emission levels of solid and gaseous wastes, and financial restrictions. This partnership between the two parties is necessary as regulators keep a watchful eye on Trafigura methods of operations and make adjustments of operation frameworks change.
4. NGOs and civil society as stakeholders: NGOs and civil society play a similar role inensuring that social progression in the community is observed. This is through monitoring Trafigura activities and keep them in check through creating awareness on environment protection and creating a democratic business environment where every player has equal operation rights. The two serve as a lens watching over Trafigura impact on the community. The effect should be positive, and their operation should be terminated when thenegative impact is caused.
SWOT Analysis
1. Strength
Trafigura strength is the customer loyalty it possesses according to their top three position in the market. Trafigura is the third largest privately owned company dealing with energy production, third behind Vitol and Glencore. Trafigura operates in the energy production where it enjoys a reasonable market share that gets them trading an average of 1.7 million tons of liquefied natural gas (McFarlane and Vukmanovic, 2015). During the past financial year, Trafigura performance has seen improving. They enjoyed the revenue of over 127 billion dollars which resulted from produced commodities with a volume of approximately 170 metric tons. The gross profit was 2 billion dollars, and the company has acquired assets worth 40 billion dollars.
2. Weakness
Trafigura is ranked third in regards to market share. This indicates that it occupies the third largest market size a position that is not easy to achieve in the energy production business. Its weakness includesconstant competitors who want to dominate their market share and acquire their consumers.
3. Opportunities
The market of energy production has tremendous potential because there is always the constant need to use energy for production in everything. The need for clean energy has increased the need to conserve the environment. This creates a future opportunity for Trafigura to invest in, and if a breakthrough will be achieved by the company, before its competitors, there is the chance that the organization will lead the market and occupy the top position.
4. Threats
Alternative energy sources are opportunities for the company, but the threats to these alternatives include thecost of production and others are seasonal. Production of nuclear power is very expensive compared to oil. Other sources like solar are seasonal because during winter weather condition energy cannot be produced. They are also resource taxing, and the value of return on investments is not worthy.
Recommendations & Conclusion
A company’s main priority is to make profits, and they do this through reduced budget cuts and maximized sales. However, to make sales of a product, one has first to createawarenessofits existence to consumers. These areMarketing strategies, and they require financial capital for them to be effective. These competing interest create a dilemma in the business operations. Therefore, a balance has to be reached on how much money should be invested in marketing so as not to compromise on the profits target.
Trafigura can improve increase its market share through venturing into other alternative forms of energy. These include renewable forms like solar, wind, and nuclear. Oil deposits are increasingly getting depleted, and Trafigura should invest alternatives of energy production. The change of business location was necessary, and these are the reason given to the chief operating officer of the business. The first reason was that an alternative cheaper location was identified which would reduce the organization's costs of production. The new site was also bigger allowing for aroomof expansion, the much needed working space. This place is also closer to raw materials and market. This will, therefore, reduce shipment cost involved in moving raw materials from source to factory, and finished product from production factory to marketplace.
References
At a glance. (n.d.). Retrieved December 8, 2015, from http://www.trafigura.com/about-us/at-a- glance/
Galoozis, C. 2010. 5 Reasons to Relocate Your Business | NFIB. Retrieved December 8, 2015, from http://www.nfib.com/article/5-reasons-to-relocate-your-business-51336/
McFarlane, S., & Vukmanovic, O. 2015. Trafigura replicates its oil market tactics to dominate LNG. Retrieved December 8, 2015, from http://www.reuters.com/article/trafigura-lng- growth-idUSL8N0ZQ46820150826
Stakeholder Engagement. (n.d.). Retrieved December 8, 2015, from http://www.trafigura.com/responsibility/stakeholder-engagement/
