Introduction
Shell Oil Company is an energy and petrochemical company that is headquartered in Houston, Texas. The parent company of Shell Oil Company is called Royal Dutch Shell. The Company has investment program as their strategy aimed at realizing profits and delivering sustainable growth. The Company focuses on the exploration of new and gas and oil reserves and the development of major products; this is in the upstream. In the downstream, the company has strategy aimed at achieving sustainable revenue generation from their assets and their selective investment. Shell Oil Company one of the largest energy and petrochemical company in the world; it has approximately 120, 000 employees and has operation in approximately 90 countries and territories.
Detailed description of the company
Shell Oil Company, through the subsidiaries actively engaged in exploration, refining, production, transportation, distribution, trading and marketing in gas, oil and petrochemical products internationally. Shell provides fuel for aircrafts, lubricants and engine oils. It also transports heating and other industrial fuels to distribution and corporate companies in several industries like mining, power generation, manufacturing and home energy. Shell Oil Company provides chemical, refinery, gasification licensing situation and gas processing. In the United States of America, Shell Oil Company was incorporated in the year 1922 in Houston, Texas (Shell Global, 2014).
The company is driven by the motivation to enhance energy efficiency in their operations and to support customers in meeting their needs. The company is motivated towards leveraging on technology and innovation as their strategy of meeting technically demanding enterprises. The key strategy of Shell Oil Company is to include and develop technology and to build sound, project and financial management skills. The core business of Shell Oil Company re: Fuels, oil and card services; exploration, production and the refining of petroleum products (Shell, 2014).
Shell Oil Company is an independent gas and oil company that has investments, both directly and indirectly in several parts of the world. The company is engaged in all principal aspects of oil and gas industry. Shell Oil Company also has interests in the chemical and oil related investments. The company has operations in the following three main segments: Downstream, upstream and corporate. Upstream deals with the operating segments of the company such as explorations and the recovery of oil and natural gas, liquefaction and transporting gas and extraction of bitumen from the oil sands. Downstream segments deal with the manufacturing, distribution and marketing of oil products. Corporate segment represents all the support functions in the headquarters and the central office (Shell, 2014).
Target market
The petroleum market is characterized by market downturn like during the introduction of new products or innovative products that can change the tastes of the consumer. Shell always satisfies their target market by launching new products, depending on the market shift. The decline of its products like Shell Super Oil was cause by diminishing demand and it was replaced by the launch of LPG and C, which are new products in the market. Shell Oil Company considers America and Europe as the target market.
Market description (Size, Competitors, customer needs)
Shell first introduced petrochemicals during the 20th century. The Company created awareness though introduction of very many products to cope with the new marks; this included the introduction of shell helix and varieties of other shell products. They employed a skimming pricing strategy if the product had little competitors. They made these products available in all their distribution channels to ensure that it reaches their target market. The petroleum or oil market is considered an oligopoly one and therefore competitors are attracted to the market with the motive of making profits. This makes the products to be profitable; to cover the readily available market, some of the companies embark on mergers and acquisitions of competitors or form joint ventures. The petroleum industry is characterized by cut throat competition and the companies often take on each other on marketing, adverting and promotion. The advertisement is aimed at building a brand that will withstand the market (Shell Global, 2014).
Shell Oil Company often strives to create the best fuel for their customers, fine fuel that cannot be rivaled by its competitors. The Company achieves this through putting heavy investment on research and development. This is to enable the company provide its customers with fuel that can take them further. To provide the best fuel in the market, Shell Oil Company carry out several laboratory tests to proof that the mileage formulae can enhance engine performance while burning less energy. This will mean that there is fuel economy. Shell also ensures that their fuel formulation satisfies the rigorous conditions that drivers face each time they are on the road. The endeavor to produce quality fuel provided Shell Oil Company with a competitive advantage. Shell Oil treats their fuels using best mileage formula. This will enable it to provide its customers with enhanced fuel economy as compared to untreated fuels. The Company has utilized this knowledge to develop lasting fuel solution aimed at providing better fuel mileage than shell formulation. The main competitors of Shell Oil Company are: Caltex, BP, Total and Exxon among others.
Pricing strategy
The oil products that survive early stages often take very long to mature. In the industry, the sales often grow at a rate that is decreasing but after some time it stabilizes. The market players often differentiate between the various products and sand. The industry is characterized by intense competition and price wars; when this is experienced, then the market is said to be saturated. Shell Oil Company has managed to overcome these forces of market to maintain stable prices while making profits. Shell capitalizes on intensive promotions and the use of media advertising to stabilize its price and outwit its competitors. The main products that shell uses to penetrate the market are Shell Helix and Rimula. There is always intense price cut especially when several products are withdrawn out of the market. Shell Oil Company improves their profits by reducing their costs of production and the costs that are used during marketing (Shell, 2014).
Distributional strategy
Shell has approximately 300 distribution facilities and around 3,000 storage tanks in the countries that it operates. Shell Oil Company moves its products through Europe and to the United States of America using its 9,000 pipeline. Shell also has a fleet of several trucks which they own or contract. The trucks make deliveries to virtually all parts of the world. Shell has a strong distribution strategy that enables the company to reach its target market and customers. It is this supply chain that gives Shell Oil Company its strong presences worldwide and in the global market. The trucks make approximately 1.7 kilometers trip daily.
Promotional strategy
Shell Oil company run a promotional strategy that is friendly, innovative, interactive and technology driven. The Company emphasizes on brand image and consistency. This is carried out through Facebook, Twitter and Four square. The Company utilizes internet marketing so much. The Company has set aside a huge budget for promotion, especially during this era of increased competition.
Shell Oil Company has established partnership with the company’s corporate advertising, associated engagements and media partnership. This is to enable the company present itself as the better in the market; and as a company that is positive about energy and project it as a company that does not condone complacency. Shell is interested in building a positive brand in the market (Shell Global, 2014).
Conclusion
Shell Oil Company is motivated by the increasing demand for oil and oil products. The company is interested in reducing social and environmental impacts; this is the major challenges facing the energy industry. The Company aims at improving energy efficiency in all their operations and to support its customers in the management of their energy levels. Shell Oil Company also has heavily invested in research and development to enhance its efficiency and to minimize the emission in natural gas and liquid production.
Shell Oil Company is committed to furthering innovation and technology and making it the core of their strategy. They leverage on technology is due to the increase in complexity of energy projects. Technology will increase their efficiency and effectiveness; this will enable them to grow their business. The distribution strategy of the company is managing an integrated value chain system. The expansion of the company is aimed at leveraging on the growing business portfolio and their customer focused business. This will enable them to build a strong brand.
References
Shell. (2014). About Shell. Retrieved on 18th March, 2014 from: http://www.shell.com/global/aboutshell.html
Shell Global. (2014). Our strategy. Retrieved on 18th March 2014 from: http://www.shell.com/global/aboutshell/investor/strategy.html
