CALTEX PAKISTAN Strategic Marketing Review

CALTEX PAKISTAN INTRODUCTION Chevron Pakistan is a wholly-owned subsidiary of Chevron Corporation, one of the world’s leading integrated energy companies Headquartered in San Ramon, California, Chevron conducts business in more than a 100 countries and has a diverse and highly-skilled global workforce of approximately 58,000 employees Being the world’s fourth largest oil company, Chevron is engaged in every aspect of the oil and natural gas industry, including exploration and production; refining, marketing and transportation; chemicals manufacturing and sales; and power generation In 2001, Caltex became a part of Chevron-Texaco Corporation, which four years later changed its name to Chevron Corporation The Chevron-Texaco merger fostered many natural synergies with Caltex, including shared standards of performance and operational excellence geared to being a consistent leader in the marketplace The company has an extensive presence in the country with a nationwide retail network consisting of 538 petrol outlets Chevron was the first in modernizing its retail outlets, installing electronic dispensers and implementing Customer Service Systems It was also the first oil marketing company to launch a CNG station in Islamabad in 1996 Its modern testing laboratory, fully equipped with the latest equipment coupled with fully documented procedures, was the first ISO 9000 accredited Oil Testing Facility in the country Chevron is also the pioneer in establishing convenience stores at retail outlets and introducing co-branded Cards in the market Chevron Pakistan is also the industry-leader in quality Lubricants in the commercial, industrial and consumer marketplace Chevron Pakistan is highly committed to setting the industry standards for safety and environmental protection, having recently received three international awards in recognition of its world-class Health, Environment and Safety Standards As an equal opportunity employer, Chevron is proud of having women employed in key management positions across different departments With 98% of its employees worldwide being local nationals, Chevron is a part of the community it serves Chevron Pakistan is actively engaged in community engagement activities in the country We have established enduring partnerships with highly reputable NGOs and educational institutions We support educational projects for underprivileged primary school children and are also contributing towards quality higher education We also help provide free healthcare and basic education and vocational training to deserving women in an underprivileged community In 2011, we have partnered with a leading Cancer Hospital to provide free treatment to patients Caltex recorded an after tax profit of $530 million for the 2013 full year This includes significant gains of approximately $26 million (after tax) This compares to the 2012 full year profit of $57 million, which included significant items of $309 million (after tax) in respect of future costs relating to the closure of the Kurnell refinery The 2013 result includes a product and crude oil inventory gain of $172 million after tax, compared with an inventory loss of $92 million after tax in 2012 CURRENT STRATEGIC DIRECTION: VISION & MISSION STATEMENT “Our energy fuels a brighter future” “We are Caltex We are passionate about energy We think and act like business owners and we're in the business of serving customers We are trailblazers, we move swiftly, expect to win and exercise care in everything we do.” EVALUATION MISSION & VISION STATEMENT I think this company’s mission and vision statement has got all the components of an effective statement i.e We are passionate about energy reflects technological aspect and also that they are dealing with the fuel and oil industry that reflects the market, We think and act like business owners reflects their philosophy, we're in the business of serving customers reflects customer component We are trailblazers reflects that they are guider and innovating leaders for their employees We move swiftly reflects survival growth strategy Expect to win is their self concept and exercise care in everything we reflects positive public image VALUES MAIN COMPETITORS OF CALTEX ARE:     Shell PSO Total Attock Oil Company limited LEVELS OF STRATEGIES: Strategic Plan sets direction, aligns organization and differentiates them from the competition It guides actions to successfully manage risk and deliver shareholder value Enterprise Strategies People Invest in people to strengthen organizational capability and develop a talented global workforce that gets results the right way Execution Execute with excellence through rigorous application of our operational excellence and capital stewardship systems and disciplined cost management Growth Grow profitably by using our competitive advantages to maximize value from existing assets and capture new opportunities Major Business Strategies Upstream Grow profitably in core areas and build new legacy positions Downstream and Chemicals Deliver competitive returns and grow earnings across the value chain Gas and Midstream Apply commercial and functional excellence to enable the success of Upstream and Downstream & Chemicals Technology Differentiate performance through technology Renewable Energy and Energy Efficiency Invest in profitable renewable energy and energy efficiency solutions SWOT ANALYSIS Strengths barriers of market entry high growth rate skilled workforce high profitability and revenue Weaknesses high loan rates are possible future profitability costs competitive market Opportunities new acquisitions growing economy new markets income level is at a constant increase growing demand new products and services Threats global economy growing competition and lower profitability financial capacity government regulations external business risks unexpected problems ANAYSIS OF EXTERNAL ENVIRONMENT PEST ANALYSIS: PEST analysis stands for "Political, Economic, Social, and Technological analysis" and describes a framework of macroenvironmental factors used in the environmental scanning component of strategic management POLITICAL FACTOR  A powerful influence over the production of oil and the price is made by instable situation from the Middle East, where every conflict could disturb oil production and transport, resulting in the rising of oil price  Crude oil prices have risen dramatically over the last few years, driven by strong global demand, limited spare oil production capacity, and continuing political instability in certain oil producing regions  Taxes take up a significant component of the price in a litre of fuel, but it varies from product to product Tax rates can be as high as almost half the cost of fuel ECONOMICAL FACTOR  In any market situation, supply and demand imbalances can affect prices in the short term Supply shortages typically cause upward price pressure, and can result from an unplanned refinery outage, pipeline problems, or an unforeseen increase in demand Conversely, length of supply, where supply exceeds demand, can result in downward price pressure  Generally, price adjustments in the market affect short-term supply-demand imbalances and bring supply and demand back into balance Whether in a situation of supply tightness or length, price will eventually bring the supply-demand balance into equilibrium by attracting additional supply or influencing demand SOCIAL FACTOR  Chevron Pakistan is actively engaged in community engagement activities in the country They have established enduring partnerships with highly reputable NGOs and educational institutions They support educational projects for underprivileged primary school children and are also contributing towards quality higher education also help in providing free healthcare and basic education and vocational training to deserving women in an underprivileged community In 2011, they partnered with a leading Cancer Hospital to provide free treatment to patients TECHNOLOGICAL FACTOR  Chevron Pakistan has a clear technological advantage and is responsible for the introduction of modern operational concepts in the industry Chevron Pakistan’s state-of-the-art computerized lubricating oil blending plant, set up and commissioned at the West Wharf Terminal, Karachi is a prime example of its superior technology It is also the country’s first oil company to acquire ISO 14001:2004 International Environmental Management System for its West Wharf Laboratory and West Wharf Lube Blending Plant ENVIRONMENTAL FACTOR  Geographic position influence the activity of oil companies because it defines the distances between exploitation, refiners and consumers, or could influence the demand for oil because of transports, international trade and migration  Caltex is committed towards making fuel efficient and less engine emitter products  Caltex with Techron is unbeatable at keeping fuel systems clean The unique formulation also minimizes any contribution to harmful combustion chamber deposits which can cause increased emissions of nitrogen oxides  ... including exploration and production; refining, marketing and transportation; chemicals manufacturing and sales; and power generation In 2001, Caltex became a part of Chevron-Texaco Corporation,... co-branded Cards in the market Chevron Pakistan is also the industry-leader in quality Lubricants in the commercial, industrial and consumer marketplace Chevron Pakistan is highly committed to setting... inventory loss of $92 million after tax in 2012 CURRENT STRATEGIC DIRECTION: VISION & MISSION STATEMENT “Our energy fuels a brighter future” “We are Caltex We are passionate about energy We think and