Strategies of Shell Company Essay
Shell Business Report
To: Jeroen van der Veer, Chief Executive, Royal Dutch Shell
From: A. Businessperson
Date: 13th February 2006
Subject: Review and evaluation of Shell’s strategies
This report considers the current strategies of Shell (name used by convention to refer to Royal Dutch Shell) and evaluates their success.
1. Shell - Overview of current strategy
The current strategy at Shell is focused on three core issues (Shell 2004a):
- a. Increased upstream activity (i.e. exploration and extraction) to deliver profits downstream
- b. Improving operational performance and returns in all Shell businesses
- c. Ensuring Shell’s culture is ‘Enterprise First’: as an employee, you are “only useful if you look at Shell as one enterprise … you should serve the objectives of that enterprise first and not your own” (Schuk 2005).
The following sections look at how elements of strategy address these aims.
2. Strategy areas
a. Corporate strategy
Shell’s corporate strategy
is led by 8 principles, reviewed in 2005 for the first time since 1997 (see Appendix for current list). The latest principles focus on increased corporate social responsibility (CSR), sustainable development and post 9/11 security.
- ‘Enterprise First’ ties in with Principle 1, which is profit-focused
- Improved performance in all Shell businesses is more specific than any of the principles, as is upstream activity for downstream profit: both loosely relate to Principle 1.
has a broad portfolio of activities including:
- oil production (core business)
- oil-related businesses (petrol stations, exploration and production, oil by-products)
- wider energy-related operations (LNG or liquefied natural gas, renewable energy)
- shipping (transportation and consultancy for e.g. governments)
- credit cards
The Boston Consulting Group (BCG) matrix helps analyse the portfolio according to market share and level of investment (see over).
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