Question

Organisation like your company needs to track trends and developments which occur on the market, in order to survive in a rapidly changing environment. These trends can be translated into opportunities and threats, which the company has to face in the future, supported by its organisational strengths and blocked by its weaknesses. Conduct the following to samsung company:

PESTEL framework, Porter’s Five Forces challenges and opportunities. Suggest corporate and business strategies to address those identified challenges and opportunities.(including in text citation)

Answer 1

The company chosen is Petroleum Development Oman, which was established in Muscat, which was established in the year 1925. The business came up as a result of discovery, manufacture and the agency policy of oil. It is established in Sultanate. The organization has been very active in different fields concerning its dealing with oil, such discovery and production of oil. Other active activities which the Petroleum Development Oman organization is active in includes shipping of hydrocarbon, production and also storage. The organization has been active in the provision of outputs within Oman such as those of crude oil and natural gas. Various trends and developments which are found within the market should be followed by this organization in order to survive in an environment which is rapidly changing.

The assessment of five forces analysis of Porters has been used as a tool for evaluation and measurement of the competitiveness of the markets. Evaluation process is one of the processes which is very essential for the landscape of Petroleum Development Oman. The porters five forces challenges and opportunities which has defined the structure of Petroleum Development Oman and has been used by the organization in the processes of evaluating and measuring the competitiveness of the markets include the following;

i. Bargaining power of buyers

The bargaining power is one of the forces in Porters Five Forces Industry Analysis framework, which is defined as the pressure that is put on the business of an organization by the consumers or the customers for them to be provided with low prices, favourable customer services and products of high quality. A buyer who is very strong makes the organization become more competitive thus reducing profit which is viable for the seller. The bargaining power of buyers within Petroleum Development Oman organization relies on the behaviour of the economic policy, especially the sectors of Oman gas and oil. Clients of Petroleum Development Oil are the organizations which practice the mining and productions activities. The bargaining power of buyers in this organization is insignificant to average due to the nature of the corporate, as it is government-based. The measures of the government to make economy more diversified have had great impacts on both the purchasing and buying powers of the consumers. This has been done through allowing the consumers to take advantage of the gas and crude oil which are at a lower rate.

ii. Bargaining power of suppliers

The bargaining power is one of the Five Forces of Porters, which is defined as the pressure which is put on the organization by the suppliers by raising the prices of their commodities and by either reducing the products availability or making their quality reduce. The power of suppliers in Petroleum Development Oman to negotiate in the sector of oil and gas is very weak. This is because of the availability of the significant number of vendors who are involved in the supply of the of gas and oil within the market to the various different sectors and organizations. Some of the challenges which are involved include the government reliance by the organizations for initiatives concerning finance because the raw materials are depended on government funding. Cost effective and creative reserves have been embraced by the producers which are useful for the controlling of the gas and crude oil prices. The bargaining power of suppliers will always remain small regardless of the initiates which have been set by the government.

iii. The threat of the new entrants

The vulnerability of the new entrants is focused on the governments imposition of barriers to entry. This is a danger which is a weak in this specific sector. This is so because the government of Oman has imposed very strict regulations and long procedures of accessing business in these organizations. The oil and gas of Oman is not much concentrated in the market and majority of the businesses which operate around the field are termed to be based on the government. This is the reason which is making most of the organizations not to join the gas and oil sector. the potential entrants of the new entrants are vulnerable and for this reason, it remains very weak.

iv. Threat of substitutes

There is lack of availability of the replacements of oil and gas industry in Oman. Therefore, most of the industries end up using various manufacturing and different techniques for processing natural gas and crude oil. Nevertheless, there is no replacement for the usage of the goods by the customers and for the goods themselves. Having all the information given, the challenge for substitutes within this region remains very weak.

v. Competitive rivalry

The economic completion for both gas and oil in Oman is involved by both foreign corporations and corporations within the nation. The sector of oil and gas in Oman is the most developed and most of the development units and wells are operated business companies within the nation. The cooperative bidding agreements of the government up streamed the pressure which was brought about by the participation of Total and shell within the area. The competitive nature of the Petroleum Development Oil of Oman in the sectors of oil and gas is very weak in nature but the reliance policy is termed to be very strong. this forms the competitive position of the organization in the marketplace.

Opportunities

some of the opportunities which are involved include; the balanced nature of the crude oil demand, the fact that Petroleum Development Oil is part of Shell and Total and lastly, the existence of the cost-effective and revolutionary reservoirs.

Challenges

One of the major challenge which is involved is that there is fear of the disappearance of the oil deposits. Another challenge is the shrinking cost of the crude oil. Lastly, there is also a challenge of decline of the public services in Oman.