Understanding SWOT on the Shell Example

2021-05-07 10:18:54
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One way of understanding the companys environment is through a SWOT analysis model that assesses the organizations internal and external factors that influence its business processes. Specifically, the SWOT analysis model examines the Strengths, Weaknesses, Opportunities and Threats within a companys environments (Redgwell, 2008).

Shell Company, officially known as the Royal Dutch Shell Plc. is one of the largest multinational organizations and valuable brands globally. It is a multinational company in the oil and gas industry. Shell as its headquarters at The Hague in the Netherlands, but is incorporated in the United Kingdom (Georjon, 2004). The company was formed through a merger of Shell Transport and Trading Company from the UK and Royal Dutch petroleum that was based in Holland. Shell is among the six major companies in the oil and gas industry commonly known as the super-majors.

The Human Resource (HR) pool at Shell is one of the largest among multinational organizations. The company has more than 35000 employees located in its offices around the world. The annual budget of shells HR is estimated to be in the region of US$900 million (Hickman, 2010). This also indicates the heavy investment that the organization has put in developing its human resources in order to achieve its objectives. One of the most critical areas in the companys HR management is the health and Safety Function. Petrol filling stations are some of the most hazardous environments due to the highly flammable nature of oil and gas products (Campbell & Miller, 2004). Therefore, it is necessary for the organization to put in place appropriate measures to ensure high health and safety standards for its employees as well as customers within its premises.

A SWOT Analysis for Shell is as illustrated in the table below:

Strengths

The companys diversified product range gives it greater competitive advantage.

Shell has a huge pool of resources, which guarantees future business operations through investments in exploration and new technologies.

Shell as a globally recognized brand with a positive reputation as it has been recognized as one of the most valuable brands internationally.

Weaknesses

- Shells huge investments in oil and gas necessitate a continuous process of exploration in order to find replacements of the supplies.

- The company experiences challenges with its waste management practices as they are deemed unfriendly to the environment.

- Some of the companys operations are located in politically unstable countries, for instance, Nigeria, where the companys distribution network is constantly affected by chaos.

Opportunities

- There is still a lot of potential in terms of discovering new locations for oil and gas into the future.

- The company has invested in some of the places which rich reserves such as Iraq, which had not been explored before.

- Shells diversification into new products such as biofuels paves way for sustained operations and opening up new markets

Threats

- The volatile nature of oil prices leads to constant fluctuations in the companys profits.

- Political instability in countries like Nigeria threatens the companys operations.

- Adverse weather changes such as the Hurricane Ike can have adverse effects on the companys business processes.

References

Campbell, T., & Miller, S. (2004). Human rights and the moral responsibilities of corporate and public sector organisations. Dordrecht: Kluwer Academic Publishers.

Georjon, A. (2004). Shell Truck Marketing Communication Strategy. Munich: GRIN Verlag GmbH.

Hickman, G. R. (2010). Leading organizations: Perspectives for a new era. Los Angeles: SAGE Publications.

Redgwell, C. (2008). Beyond the carbon economy. Oxford: Oxford University Press.

 

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