Question

Overview

Though flexibility and adaptability are often required in today’s business world, organizations still require a roadmap that encompasses the parameters against which they will make managerial decisions as well as the steps they plan to take to ensure they get from point A to point B. This assignment will ask you to develop a 3-year strategic plan for an organization with which you are affiliated. It could be your place of employment, a volunteer organization, a sports team, a religious organization, or even your child’s day care facility. The assignment will ask you to develop your strategy in three phases: strategy formulation, strategy implementation, and strategy evaluation.

Overall Instructions

This assignment is designed to expose you to the complexity of a strategic plan and the measures required for properly implementing and evaluating a plan. It will allow you to:

1.Expand your knowledge of strategic planning within an organization.

2.Develop your ability to use strategic planning tools.

3.Contribute to your ability to assess the strategic directions and plans for an organization with which you are affiliated.

4.Create a fully implementable strategic plan.

The assignment will be submitted in four parts throughout the semester. The staged approach is designed to allow you to submit drafts of the three main areas of the project so that early feedback can be incorporated into your final project submission at the end of the course.

Instructions

Prepare a draft document for review by your professor that includes the following:

Analysis of current vision/mission and proposal for updated vision/mission.

External Factor Evaluation Matrix and Porter’s 5-Forces Analysis.

Internal Factor Evaluation Matrix.

SWOT Matrix.

BCG Matrix.

Strategic direction choice and rationalization – choose one (or two) of the strategic directions as defined in Chapter 5 that you feel will be best for your organization to pursue in the coming 3 years, and develop a rationalization for this choice. Ensure that the choice is driven by the matrices developed above.

Answer 1

Introduction and Background of the company:
The company discussed in the case is Saudi Aramco. They are a world leader in exporting crude oil and natural gas liquids. They have a well setup supply chain with has used latest technologies in re-engineering the value chain for creating better supplier and customer experiences and optimize their own performance. The major products sold by Saudi Aramco are Oil, Gas, Refined chemicals, base oils and converge. They produce 5 variants of oil as per the market need. Natural gas is another major component provided by them and during the production of natural gas, ethane, natural gas liquids and condensate are obtained as byproduct which are sold as feedstock to other major petrochemical companies. The refined products include LPG, Naptha, gasoline, jet fuel, diesel etc. Apart from this they also produce aromatics, olefin and synthetic rubber among host of other chemical products.

Vision Statement:
The vision statement of Aramco is “to be the worlds leading integrated energy and chemicals company, focused on maximizing income and helping in increasing the kingdom`s economy”.
The current vision statement clearly shows the intention the leadership team is having towards achieving maximum profits and their ambition to be the world`s leading integrated energy and chemicals company.

Proposed Vision statement:
“To be the world`s leading integrated energy and chemical company using the latest emerging technology to maximize income and obtain world leadership status in terms of market share and help the kingdom`s economy grow and work in a manner that is in harmony with environment”
The proposed vision statement includes the use of emerging technology and an improved focus of harmonizing with the natural environment. The theme of this proposed statement is to adapt the organization as per technology changes and ensure the outcomes are not harmful to environment.

External and Internal factor evaluation:
1. In any business scenario and environment, there is a constant change in the macro and the micro environment factors that affect the business portfolio. To identify this, there are multiple techniques that are used. Few popular tools are:
• SWOT Analysis
• Pestle Analysis
• Five forces
• Balanced scorecard etc.
In all these above techniques there are various factors that are considered by the company before implementation or going to full scale rollouts. Few of the major elements that are focused highly by companies are Strengths, differentiation value and threats from other areas.
Strengths:
• Large and world class infrastructure and refinery setup
• Easy access to oil and natural gas
• High working capital
• Favorable government policies
• High investment in new technology and expansion
Weakness:
• Very high dependency on natural resources
Opportunities:
• Expansion of markets worldwide and getting greater market share in Asia and Africa
• Use of new technology to improve the customer experience
• Mergers with other giants to provide faster deliveries worldwide
Threats
• Revenue model is from selling the product worldwide at cheap rates. Other competitors are rising worldwide to challenge this
• Worldwide Demand to focus on alternate energy sources

Strategic direction: the strategic change in the company as already mention in the proposed vision statement is to include emerging technology solutions. Information and communications systems can be used extensively in a large company like Saudi Aramco. ICT systems can help in optimizing the various processes in the supply chain. Right from procurement to warehousing and distribution ICT can provide a solution to address the growing needs and ease the operations. In Warehousing, the materials can be stored using optimized solutions provided by EWM – Extended Warehouse Management systems. They provide effective bin management solutions which helps in grouping of shipments as per type, customer and space utilization. For truck reporting at plant and warehouse, slot management systems can be used. They help in placing truck at the right moment ensuring that the truck cycle time within plant or warehouse is minimal. Even the opening of new warehouses can be planned as per optimized models provided by network design models. ICT can help in not only optimizing the supply chain but also reducing the losses and improving the effectiveness in the supply chain.

Cost and schedule analysis can be easily modelled using ICT solutions. Cost optimization and value analysis can be done using the ICT models. The value chain and production schedules have to be optimally derived to ensure the crude is properly used to get profit maximization. ICT has helped in providing the same. All major oil and gas companies across the world use schedule optimizers to run the plant and prepare production schedules.

Another major strategic change would be to focus on web enabled supply chain. They include the following aspects:
• Web enabled procurement systems can be an effective system to reduce the manual intervention and increase tracking.
• Web enabled order tracking systems such as Vehicle tracking system and fleet management systems can help in getting real time updates about the location of the vehicle and share the status to customers
• Warehouse management systems help in provided optimal solutions to bin management, storage optimization and vehicle management within the warehouse premises
• CRM systems help in sharing the customer related data and provides an ease of use touchpoint to customer to help in placing order, tracking the order and finally sharing the electronic proof of delivery.
• For any complaints and queries they can use the CMR platforms and help in tracking the issue resolutions.

These are some of the strategic changes that can be undertaken by a company like Saudi Aramco to ensure the future is sustainable and they are ready for growth. The strategic initiatives mentioned above are something which can be easily deployed in a period of 3 years. Apart from giving better operational efficiencies they will also give better customer experiences.