Question

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 selected is Petroleum Production Oman, founded in Muscat in the year 1925. The company emerged as a result of oil exploration , production and agency regulation. It is based in Sultanate. The organization has been very involved in various fields regarding its treatment of oil, including exploration and oil production. Other active activities in which Petroleum Development Oman is active include hydrocarbon shipping, production, and also storage. The organization has been active in supplying outputs such as crude oil and natural gas, within Oman. The company will pursue different trends and innovations that are contained within the industry in order to succeed in a constantly evolving world.

Porters' assessment of five forces analysis was used as a tool for assessing and measuring market competitiveness. Evaluation process is one of the processes that is very important for Oman's Petroleum Development landscape. The porters five factors threats and opportunities that have described Petroleum Development Oman 's framework and that the company has used in the processes of assessing and calculating market competitiveness include the following:

Bargaining power of buyers:

The bargaining power is one of the strengths in the context of Porters Five Forces Industry Analysis, which is characterized as the pressure that consumers or customers place on an organization's business to provide them with low prices, advantageous customer services and high quality goods. A very strong buyer makes the company more competitive and therefore decreases income which is viable for the seller. The bargaining power of buyers within the organization Petroleum Development Oman relies on economic policy behaviour , particularly the Oman gas and oil sectors. Petroleum Development Oil customers are the entities that conduct the operations of the mining and development. Because of the nature of the corporation, as it is government-based, the bargaining power of buyers within this organization is insignificant to average. Government measures to make the economy more diversified have had great impacts on consumers' purchasing and purchasing powers. This was achieved by encouraging customers to take advantage of the lower cost of gas and crude oil.

Bargaining power of suppliers:

The bargaining power is one of Porters' Five Forces, which is described as the pressure that suppliers placed on the organization by increasing their commodity prices and either reducing the availability of goods or reducing their quality. The power of suppliers to negotiate in the oil and gas sector at Petroleum Development Oman is very weak. This is due to the availability to the various sectors and organizations of the significant number of vendors involved in supplying the gas and oil within the market. Some of the problems involved include the organizations' government dependence on financing programs as the raw materials are dependent on government funding. The producers have embraced cost-effective and creative reserves that are useful for controlling the gas and crude oil prices. Suppliers ' bargaining power will still remain limited irrespective of the Government's initiates.

The threat of the new entrants:

The new entrants' vulnerability is centered on the imposition of entry barriers by governments. This is a danger in this particular sector which is a weak one. This is because in these organisations, the Oman government has implemented very strict regulations and long processes for accessing companies. Oman's oil and gas is not much focused on the market, and most companies operating around the field are considered government-based. That's why most companies are not entering the gas and oil market. Potential new entrants are vulnerable, and therefore remain very small.

Threat of substitutes:

Replacements of the oil and gas industry in Oman are lacking. Hence most industries end up using various production and different processing methods for natural gas and crude oil. Nevertheless, there is no substitute for the customers' use of the goods and for the goods themselves. The competition for substitutes within this region remains very small, despite all the details.

Competitive rivalry:

In Oman, both international companies and companies are involved in the economic completion for gas and oil within the country. The oil and gas sector in Oman is the most developed industry, and most of the production units and wells are nationally operated businesses. The government's cooperative bidding agreements streamed the pressure brought about by Total 's involvement and shell within the area. The competitive position of Oman's Petroleum Development Oil in the oil and gas sectors is very weak in position but it is called very high reliance strategy. That forms the organization's competitive market position.

Opportunities:

Some of the opportunities involved include: the balanced nature of crude oil demand, the fact that oil is part of Shell and Total and, lastly, the existence of cost-effective and revolutionary reservoirs.

Challenges:

One of the major challenges involved is that there is fear that the oil deposits will disappear. The rising crude oil prices are another problem. Lastly, the deterioration of the public services in Oman is also a problem.

References:

Indiatsy, C. M., Mucheru, S. M., Mandere, E. N., Bichanga, J. M., & Gongera, E. G. (2014). The application of Porter’s five forces model on organization performance: A case of cooperative bank of Kenya Ltd.

Kaplan, A., & Haenlein, M. (2020). Rulers of the world, unite! The challenges and opportunities of artificial intelligence. Business Horizons, 63(1), 37-50.

Yap, J. (2012). Adapting porter’s strategy formulation process and generic strategies model in today’s competitive business environment. Singapore Management Journal, 1(1), 38-99.

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