Marketing management is the application, tracking and reviewing of the activities and marketing resources of a company. Marketing management’s scope depends on the business size and the industry upon which the business operates. For a marketing management to be effective, it will make use of the resources of the company for improvement of the opinion of customers’ opinions regarding the company’s products and services, increasing its customer base as well as increasing the perceived value of the company. This paper has selected Chevron Singapore for its marketing management assignment in its SWOT analysis. Singapore acts as the regional headquarters for all the downstream operations in the entire region of Asia-Pacific. Chevron has an interest of 50 percent in Singapore refinery, which produces petroleum products for Asian pacific region.
SWOT analysis
Strengths
Chevron Singapore is robustly positioned from a fundamental point of view. It has a strong financial position. During the past year, a cash flow of $25 billion was generated by the company while its cash position is $13 billion. The operating cash flow together with its cash position can service a $34 billion debt. This puts the company at an adventitious position over its rivals in the oil and gas industry since most have their balanced sheets highly leveraged. For instance, when compared with its rivals Royal Dutch Shell (RDS-B) and BP (NYSE:BP) that have debt equity rations of 26 and 52 respectively, the debt equity ratio for Chevron Singapore stands at 21.6, which is a manageable ratio. As a result, Chevron Singapore is likely to incur lower interest expenses and this impact on its earnings positively at the end. Moreover, the company was not impacted by the weaknesses in the global prices of oil during the last year. Instead Chevron Singapore recorded a consistent increase rate in its gross margin. Conversely, its rivals recorded dismal performance margins. Despite the difficult circumstances, the company has been able to increase its production even though it cut its expenditure. The production of the company has increased by 3 percent even though the capital expenditure has dropped by 8.5 percent. Additionally, the company has also ensured that productions are achieved at a much lower costs as compared to its rivals. Some of its production areas where the costs have been lowered include Jack/St. Malo in the Gulf of Mexico and Australia’ Gorgon plant. The fact that Chevron Singapore has continued doing well during difficult times in terms of margin performance and production contributes to its strength.
Other strengths include strong presence in the global market as well as being a global brand ( Rao 2005).
Weaknesses
Chevron Singapore has also been confronted by a number of weaknesses. Over the past few months, the company has been at the center of media attention due to failures of equipment. Globally, Chevron Singapore’s project in the Gulf of Mexico went down because of failure of equipment. This has been the latest headwind in oil production in deep water. The Financial Times reported that the company lost six out of the sixteen connectors that it expected to secure a floating stage with at the Big Foot oilfield. The water there was about 5,200 feet deep. It was located about 225 miles south of New Orleans (Collins 2008).
This proved to be a major snag that occasioned indefinite delay of an oil development project worth $5.1 billion in the Gulf of Mexico. Incidentally, the project was scheduled to commence its operations later in the year but the happenings compromised the ability of the company to realize its earlier set target 20 percent achievement growth in the next few years. This was also exuberated by the looming hurricane season on the Atlantic Ocean, which will delay the repair of connectors. As a result, the production capability of the Chevron Singapore will be hurt going forward and the company could be kept could not tap into its global oil demand growth.
Other weaknesses include the cost of environmental hazards that area associated with its production and products. The company has also to contend with products and reserves that are always on the decline and several legal issues that pose numerous bottlenecks (Prabhu, 2005).
Opportunities
Chevron Singapore can also leverage on numerous opportunities that the company has. To begin with, there has been a global increase in the prices of oil and fuel. This means that the company will be able to generate a lot of revenue from sale of its products. Additionally, the natural gas market has been on the increase around the world. This has enabled the company to diversify its production and increase its scope as well. It therefore has a strong market standing. The company has also seen increased capital investments in several of its sectors and thereby enabling it to investments further. Chevron Singapore also has opportunities for corporate social responsibilities activities. It can engage on numerous activities across the globe that will ensure that it gives back to the community and protect and conserve the environment. This way, the company will appeal to many people and will have its products purchased more. As a result, the sales volume of the company will increase even as its reputation shoots to higher ranks. Therefore, the company will be able to reposition itself an energy company that is ready to assume a strong global positioning ( David & David 2016).
Threats
The threats that Chevron Singapore has to confront are numerous. Some of these threats include government oil revenue tax regulations, higher competition and the introduction of electric and fuel cell automobiles. On government regulations, Chevron Singapore sells its products to many countries across the world. Many of these countries have their governments regulate the prices of oil products and the amount to be supplied during a given period of time. Moreover, some governments require the company to take responsibility for any eventuality that comes as a result of oil products mishandling. These are very costly ventures and result in huge financial losses for the company. As with regards to high competition, the company has to operate in fiercely competitive environment. Some of its competitors include BP, Exxon Mobil, Royal Dutch Shell, Total and ConocoPhillips. These are companies that have strong presence in the market with huge asset bases. Toppling these companies from their lucrative positions will always remain a daunting task for the Chevron Singapore. Further, as is the case in the US, there is currently an increasing international focus on green automobile fuels in Singapore which has forced the company to change its production methods. The introduction of electric and fuel cell automobiles is currently gaining momentum. Environmental activists and policy makers have lately carried out sustained campaigns on the introduction of these kinds of automobiles because of their reliance on clean energy. When these focus increases and bear fruits, oil companies including Chevron Singapore will register a reduction on the volume of their products. Their products will eventually become irrelevant if the campaigns see the light of the day. This is a big threat for the company (Afuah 2009).
Conclusion
Marketing management is an important component that will help each and every company. The effectiveness of marketing management will only be achieved if the company utilizes its resources wisely considering their availability and the size of the company as well. The use of SWOT analysis is another effective approach to marketing management. This is where a company takes time to learn its position in the marketing by analysis its strengths, weaknesses, opportunities and threats. This analysis will be effective for Chevron Singapore in several ways including the provision of relevant information for market positioning.
References List
Afuah, A., 2009. Strategic Innovation: New Game Strategies for Competitive Advantage. Routledge: New York.
Collins, K., 2008. Exploring business. Pearson: Prentice Hall.
David, F. R., & David, F. R., 2016. Strategic management : a competitive advantage approach,
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Prabhu, C. R., 2005. E-governance : concepts and case studies. New Delhi : Prentice-Hall of
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Rao, M., 2005. Knowledge management tools and techniques : practitioners and experts evaluate KM solutions. Amsterdam : Elsevier Butterworth-Heinemann, cop.
