Introduction
For my research, I decided to focus on one of the largest oil companies in the world, Shell oil company. Shell is an oil company with its headquarters in the United Kingdom, boasting over 80000 employees and an annual revenue of 261,504,000 US dollars. Shell was founded on April 23, 1907, via a merger between The Shell Transport and Trading Company and Royal Dutch Petroleum Company of the United Kingdom and the Netherlands, respectively (Lawrence, 2017, p.190). I am interested in researching this company because of its large size and ability to influence the economy, environment, and the world at large. The main question of my research is how Shell company runs and is managed based on its large size. The main focus is its marketing strategies, environment conservation strategies, and management strategies.
I also look into Shell’s vision for future strategies for sustaining the enterprise and the environment. Shell is also suitable for research because it has its main headquarters and several enterprises worldwide, making it easy for me to carry out qualitative and quantitative research. This research is going to take a conducive number of finances and time due to the ready availability of data to research on. Researching Shell oil companies will be useful in understanding how international businesses are able to successfully manage their wide-based enterprises while ensuring high returns, customer satisfaction, and environmental protection (Lawrence, 2017, p.190). Also, the data will be useful in helping organizations analyze the causes of their success and failure and mitigation strategies. Moreover, the research will be helpful in finding out how an oil company can operate efficiently while still ensuring that the environment does not suffer the consequences. Lastly, the research will be impactful in determining future inventions and improvements in energy production, such as investment into more environmentally safe methods of energy production, such as solar and wind.
Research Methodology
For my research to be effective and impactful, I decided to combine qualitative and quantitative research methods to get the best results. For the qualitative research method, I took a case study, which is a Shell global oil company. I carried out a grounded theory research method through the study of available documents and interviews with the management and staff of the Shell outlet near me. By interviewing the staff, I would get information on the organization’s management methods, marketing strategies, and environment conservation methods. Studying available documents, especially from the Shell oil company’s official website, I would get a lot of information. The documents are a very rich source of Data on the running of the organization, especially since it is directly from the organization. Apart from information from the Shell official website, many other secondary sources provide information on Shell, such as previous research documents on Shell.
On the qualitative research methodology, a descriptive research design would be very productive in explaining how the Shell oil company works and carries out different procedures such as staff recruitment and marketing. Also, correlational research on the performance of the company between different periods is very useful in determining the factors and conditions that are necessary for its success and also the conditions that lead to a decline in its performance. By combining different research methods, the research will cover an extensive amount of information on the case study, yielding the success of the research and a rich source of analyzed data that will be helpful. Due to the ready availability of data and people to be interviewed for data, research into this company will be easy and cost-effective. Also, the research will not take a lot of time as most information is readily available, and only a few interviews and surveys are needed to complete the research. The results will also help achieve the main aims of the research. The research mainly involves going through secondary data sources, making things easier as the data is already collected and organized.
Data and Analytics
The major aim of this research is to use the above research methodologies to be able to gather and analyze data on the company of focus, Shell global oil company. The data to be collected involves several aspects of the business, such as its financial performance over time, its marketing strategy, its contribution towards a sustainable environment, and its impact on the energy production market, among others. By having these main areas of research, data research can be more concise and focused on finding specific data rather than general data that is hard to analyze. To get the necessary information required, reports had to be gathered, interviews performed, and research on existing information performed. The different areas of focus are discussed below:
- Environmental conservation
Shell’s main business strategy is to shift its main focus to oil and gas and bank more on renewable energy. Some of their alternative investments include solar energy, electric energy, and wind energy. This strategy is very important as it helps them establish two important goals, environmental sustainability and risk spreading. By diversifying into more environmentally safe energy production, Shell addresses one of its major goals, creating a cleaner and safer environment. Also, in an interview, Shell’s Technology Director confirmed that Shell’s major goal is to have production of all their products produce no emissions (Pickl, p.100370, 2019). By doing this, Shell will help reduce the effects of air pollution and global warming. Also, Shell aims to reduce carbon emissions from the burning of their energy-producing products. Lastly, Shell plans to collaborate with their customers in decarbonization and help them eliminate emissions (Pickl, p.100370, 2019).
Although Shell deals with a product that might be the largest air pollutant, they also aim to reduce pollution by 2050. To ensure that they are on the right track towards ensuring lower carbon emissions and reduction of the greenhouse effect, Shell releases a sustainability report frequently to show where the company is at in the process of attaining its mission of securing the environment (Pickl, p.100370, 2019). Also, environmental authorities and activists can use the sustainability report to see whether Shell is living up to their promise and carrying out their environmental responsibilities. Shell’s transparency in its progress with the process of creating a safer environment and the provision of required reports and press statements is useful in analyzing its performance concerning environmental sustainability (Pickl, p.100370, 2019).
- Marketing Strategy
Being an oil manufacturing company, Shell has a product that is demanded globally. Also, being a large company, marketing must be correctly strategized to benefit from it. According to, Shell mainly uses the geographical segmentation marketing strategy. This means that the customers are grouped according to their geographical location, that is, countries. This marketing strategy makes their work easier since the company is large, and marketing it as a whole might be difficult and ineffective. Also, Shell argues that this marketing strategy is effective because personalized and customized marketing can be done in different countries to achieve the best outcome (Gloria, p.25, 2022). Moreover, by considering factors such as the culture and population of the different segments, the marketing strategy is useful in designing the most efficient and appropriate marketing and advertising tools.
Also, Shell uses positioning as a marketing strategy in order to reach all the communities and equally provide services. By being positioned globally, Shell as a brand is already marketed and trusted by the customers. In addition, Shell, a large brand that boasts of quality products and environmental sustainability, gains a lot of customer trust. Shell is in more than 60 countries in the world. Also, Shell uses partnering and alliances for marketing the company. By strategically partnering with some firms and collaborating with them, Shell has gained more skills in service delivery and technical skills, leading to better marketing. Shell has collaborated with companies such as Gordon Murray Design (Gloria, p.27, 2022). Lastly, since Shell has a diversified business product, marketing becomes easier.
- Shell Company Financial Performance
To analyze the financial performance of Shell company over the years, I must check financial reports and documents published by Shell annually. These documents are very helpful in determining how Shell has been doing financially over the past years and evaluating whether it is progressing or regressing. Since the financial documents provide information on spending, earnings, liabilities, and revenues over the years (Gloria, p.29, 2022). Financial documents are very important in dictating mitigation action in the case of loss, and they also help investors decide whether to invest in the business. The financial documents are readily available on Shell’s official webpage. Also, data analysis is much easier with a comparison already made for the company’s performance within the past several years. The document below is a sample of part of a financial statement comparing Shell’s financial performance from 2017 to 2021:
With such detailed and organized data as the above, interpretation and analysis become much easier. For example, it is noticeable that revenue dropped drastically in 2020, probably due to the Covid-19 pandemic. Investors would be interested in investing due to Shell’s quick rise between 2020 and 2021, as they speculate better returns in consequent years as long as there is no disruption to the normal supply chain (Gloria, p.25, 2022). The data is useful to many parties, such as investors, financial analysts, and competing firms. By placing its financial information publicly, Shell expresses its transparency, a positive trait required of a company (Gloria, p.25, 2022). Besides the annual financial statements, Shell posts financial results every four months, providing more concise information on their financial operation. On top of financial documents, Shell provides organized information to investors to fill them up on the company’s current performance and decisions made in the company. Lastly, Shell also releases official information through the press to inform the whole public of the financial and general performance of the company. With all this information readily available, Shell’s financial performance analysis becomes much easier, less time-consuming, and more cost-effective.
- Influence of Shell Oil company on the Energy Market.
Since Shell is among the largest and most influential oil and gas companies, it greatly influences the general market. Being in the market for more than 100 years, Shell has become one of the determinants of the trends in the energy market. This has happened especially with the milestones and innovations Shell has done over time, setting a bar for other companies (Hurst & Mackenzie, p.120, 2022). From designing oil tankers that are safe for water transportation to automation of oil drilling, better oil refining, conversion of gas to liquid form, recovery of oil, and field optimization, Shell has been able to invent better and safer ways of energy production while still considering the environment (Hurst & Mackenzie, p.120, 2022). Apart from these milestones, the evolution of shell throughout the long period it has been there, Shell has acted as a reference point and blueprint for many companies that aspire to be as successful as its efficient and safe energy production. Also, due to its size, Shell has hugely impacted the prices, demand, and supply of energy products over time.
It is also a major determinant in deciding oil and gas prices. An example was in July when Shell’s CEO was able to predict a rise in oil prices due to the disparity between supply and demand (Hurst & Mackenzie, p.120, 2022). Shell’s wide customer base is also responsible for dictating oil and gas supply worldwide. A supply disruption in Shell’s products implies disruption in Shell’s enterprises in more than 60 countries and more than 1000 outlets (Hurst & Mackenzie, p.120, 2022). This has a huge impact on the market. Shell is also a major determinant in formulating policies that relate to decision-making in the energy production industry due to the authority it has over the market. Lastly, Shell has been seen to influence other companies to work towards ensuring that their energy production process does not result in environmental degradation. Other oil and gas companies are now aiming at moving towards reducing carbon emissions and greenhouse effects for a more sustainable environment. In the mentioned ways, Shell is a large global determinant of the energy generation industry.
- Shell’s Ability to Operate in Different Countries in the World
According to Shell oil company, providing services to different countries requires awareness of their differences regarding culture, politics, religion, and many other factors. Using this, they can efficiently run their separate branches in different countries and also venture into new places and start new enterprises (Stevens, p.123, 2016). Understanding the needs of people in a certain place is relevant to know what services are required and how they need to be delivered efficiently. Shell has strategies such as segmentation to run such a large company effectively. Moreover, through collaborations and alliances in different locations of the world, Shell gets an opportunity to venture into different locations with suitable conditions for business and setting them up. With a stable and conducive political, cultural, and physical environment, Shell can manage the company’s running well in different areas of the world (Stevens, p.123, 2016). Also, by understanding how the different political and cultural aspects of different countries work, Shell is able to run efficiently while ensuring that they do not engage in any activities that could be considered inappropriate in the country. By understanding Shell’s operation in diverse environments, it becomes easier to understand the strategies used to operate in such a wide environment.
Validity and Reliability of Research Instruments
The instruments and methods chosen to carry out the research are efficient in that. First, they provide information that is up-to-date and well-organized. Also, the sources are reliable and valid because most of the data is obtained from the Shell oil company’s official web page and certified research papers. Moreover, the research instruments proved to be very conducive as they do not require a lot of cost, procedures, and time in order to access them. Also, having secondary sources as the main tool for the research is very beneficial as it requires little effort to access the information. Moreover, information from the secondary sources comes in an already organized form, making it very easy to analyze data from them.
Sources such as the CEO’s speech as he approached retirement and press releases are very valid and reliable as they are not mediated or interpreted by anyone, making them very original and useful in data analytics (Hurst & Mackenzie, p.120, 2022). However, the large size of the company makes conducting interviews and surveys very difficult. Also, it makes them less reliable since the results of the company’s outlet in just one locality are not very useful in determining the performance of the outlets in the more than 60 outlets worldwide. Hence size is a big hindrance to the reliability of the research tools (Smink & Hekkert, p.90, 2015). Apart from this problem, the available secondary sources are reliable and valid research tools.
Conclusion
Throughout the proposal, it is evident that combining different research methods is crucial in ensuring the best outcome for the research. Also, outlining the specific areas of research and not carrying out a general study with no focus is important in ensuring the research is carried out efficiently and the results can be analyzed and used for the improvement of the industry. Research into the Shell oil company is very important in that it can give detailed explanations of its impact on the different components of the business environment. The research could also provide an understanding of the company’s methods of operation, different business strategies, and the company’s impact (Smink & Hekkert, p.90, 2015). For example, the research aims to look deeply into how Shell impacts the environment, controls its impact, and plans to improve the environment in the future and how it will do this.
Other factors, such as its development over the years, its achievements, and its milestones, can also be understood better. However, the results can only be accurate if the chosen research methods are suitable for obtaining correct, relevant, and recent data. Failure to do this the results found will not be helpful in achieving the main goals of the research, making it a waste of time. To determine whether the methods chosen are efficient or not, an analysis of the validity and reliability of the research tools chosen needs to be done. Through this, challenges in the research can be identified early and dealt with early enough. With all the challenges taken care of, there will be lesser hindrances to the research. Lastly, I believe that comprehensive research on the Shell oil company will be very useful in business analysis, investment decisions, environmental assessment, and improvement in the energy production industry (Smink & Hekkert, p.90, 2015).
References
Gloria, B. (2019) Royal Dutch Shell Organizational complexity, Organizational Theory. Available at: https://orgtheory.home.blog/2019/10/03/royal-dutch-shell-organizational-complexity/ (Accessed: December 31, 2022).
Hurst, L. and Mackenzie, T. (2022) Shell CEO sees risk of even higher oil prices on tight supply, Bloomberg.com. Bloomberg. Available at: https://www.bloomberg.com/news/articles/2022-07-28/shell-ceo-sees-risk-of-even-higher-oil-prices-on-tight-supply?leadSource=uverify+wall (Accessed: December 31, 2022).
Lawrence, A.T., 2017. The drivers of stakeholder engagement: Reflections on the case of Royal Dutch/Shell. In Unfolding stakeholder thinking (pp. 185-199). Routledge.
Our Strategy: Powering Progress (2022) Shell Global. Shel. Available at: https://www.shell.com/about-us.html (Accessed: December 31, 2022).
Pickl, M.J., 2019. The renewable energy strategies of oil majors–From oil to energy? Energy Strategy Reviews, 26, p.100370.
Smink, M.M., Hekkert, M.P. and Negro, S.O., 2015. Keeping sustainable innovation on a leash? Exploring incumbents’ institutional strategies. Business Strategy and the Environment, 24(2), pp.86-101.
Stevens, P., 2016. International Oil Companies. The Death of the Old Business Model, Chatam House, London, UK.
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