Royal Dutch Shell SWOT analysis

Tagline: Lets Go, You can be sure of Shell, Made to move further
Target group: Enterprises looking for production, people for petrol diesel for vehicles and
domestic uses
Positioning: The leading oil and natural gas brand in the world
Competitors: Chevron, Exxon Mobil, BP (British Petroleum), Total, Conco Phillips

Internal

Favorable
Strengths:
1. Strong reputation in the
field of energy (is the
seventh biggest oil
company according to
Forbes)
2. High financial growth, since
the 2008/2009 economic
downturn (strong capital
base for competing)
3. Has established strong
brands

Unfavorable
Weaknesses:
1. Legal issues
2. Over statement of oil
reserves controversy
3. Ambiguous corporate
communications affected
marketing
4. Human Rights and
environmental issues
degraded image

4. Latest technology,
diversified portfolio of
products
5. Co-branding with Ferrari
6. Operations in over 90
countries
External

Opportunities:
1. Acquisitions by buying out
competition
2. Increasing demand for fuel
3. Regulating Price of Oil

Threats:
1. Government regulations
2. High competition
3. Environmental laws
4. Economic instability

Strengths:
3.An example is Shell V-Power,, which is a special type of gas that is supposed to be
able to clean away sediments of leftover gas, that could lessen the strength and
performance of the motor. This product was closely developed in cooperation with
Ferrari.
4.In their upstream segment they focus on exploring for new oil and gas reserves
and developing major projects where their technology and know-how adds value to
the resource holders.
In Downstream their emphasis remains on sustained cash generation from their
existing assets and selective investments in growth markets.
5. Shell is closely working together with the luxury sports car producer Ferrari, an
Italian company. Their business collaboration reaches from the popular Sport of
Formula 1, where Shell is Ferraris main Sponsor and supplies them with racing fuel.
In return the very popular/well known drivers do commercials for Shell with their F1
cars, to promote Shell and their products, aswell as the Ferrari F1 Team.
(Shell co-developed with Ferrari a new brand of fuel and oils to be used in the 2014
season of Formula 1. The objective was to create an engine and a type of fuel that
would reduce overall consumption by 30% and increase the life span of the engine.
The development of the engine was handled by Shell engineers .Moreover because
of the partnership Shell has been able to test and further develop different types of
fuel that offer its customers the excellent fuel that they are accustomed to and also
develop new products such as Shell V-Power and the Shell Helix Lubricants. The
partnership has also extended beyond the Formula 1 expertise that shall initially
offered Ferrari by helping with the development of the new engines used in Ferrari
road car. This served to both companys mutual benefit since Ferrari was able to
learn more about what bring efficiency for the engine and Shell was able to acquire
data regarding its fuels field test performance.)

Weaknesses:
1. Shell is in court again, for allegedly stealing trade secrets from smaller
competitors.
Newton Reasearch Partners vs. Shell Oil, Twister B.V. & Shell EP.
Most of the legal issues that Shell currently faces are prevalent within the whole gas
and oil industry. In America one major legal problem constitutes the municipal
authorities ability to enact at any given time a zoning ordinance. As a result of such
ordinances any municipality can deny the oil and gas drilling procedures on any part
of land that is within their jurisdiction. What makes this matter even more
complicated is the state specific regulations that are found within America, meaning
that every state is capable of changing and adjusting its own legislature on the
matter. As such this might result in a difficult legal environment for Shell due to
inconsistency of the laws. Other inconsistencies of the laws apply to the way water

is used in terms of operational practice and whether there should be a separation

between the water used for drilling and the one used for other operational activities.
2. In 2004 Shell overstated its oil reserves, resulting in loss of confidence in the
group, a 17 million fine by the Financial Services Authority and the departure of
the chairman Philip Watts. A lawsuit resulted in the payment of $450 million to nonAmerican shareholders in 2007.
Shell's advertising regarding its renewable energy business has been described as
a greenwash by some environmental lobbies, though its renewable energy activities
have been praised by other commentators.
3.The size and scale of the global operations of company may be a weakness due to
the difficulties of the company to control quality and standards of its products since
the operational conditions of different refinery sites differ. This also impacts
negatively on the administrative efficiency and effectiveness of the companys
management.
In August 2008, the British Advertising Standards Authority (ASA) ruled that Shell
had misled the public in an advertisement when it claimed that a $10 billion oil
sands project in Alberta, Canada was a "sustainable energy source".
4. Shells image has suffered in the past due to alleged oils leaks and
mismanagement of its dumping procedures. One clear example of this is the 2009
Nigerian oil pollution case in which Shell was criticized and even faced legal threats
in the wake of the oil spillage that occurred on 26 th of June 2005. Shell reportedly
failed to react in time and closed the leaking pipeline 3 days afterwards. The
damage to the environment as well as the plaintiffs created a wave of negative
publicity for the company in the wake of the 2012 court decision. Moreover
consistent criticism from environmentalists and NGOs continues to affect the image
of the company since many activists oppose the exploitation and the pollution
allegedly brought by Shell in the Nigerian delta.
Opportunities:
1.There are also opportunities for the company to expand to the emerging
economies like China through joint ventures, mergers and acquisitions like
acquisition of Neste Oil Oyj in Poland (Reuters, 2012b).
2.There is increasing awareness and concern for environmental sanity where
reduced carbon emission is a necessary consideration for most oil-related products.
Consequently, there is increasing demand for liquefied natural gas as a source of
clean energy. This is likely to increase the companys revenues from liquefied
natural gas.
3. Market rigging. Shell and the other big Oil companys have the possibility of
Rigging, or as they call it, regulating the market. They have giant Silos where they
can store incredible amounts of Oil. When a lot of Oil is flooding into the market, the

price is expected to sink, but Shell can just not realease the entire amount of Oil
into the market, therefore regulating the price of Oil in a theoretically legal way.

Threats:
1.Increasing strict environmental regulations is also a threat to the current and
future operations of the company which will require more efficient and environment
friendly exploration and manufacturing technologies.
2.The competition within the Oil business is very strong, as there are giant
companys like BP or Exxon Mobil that offer exactly the same products as shell. For
Shell this means that they have to be profitable, and good at innovating new types
of products, as for instance the Shell V-Power Diesel, because one new
developement they are slow on, could mean them going out of Business.
3. Given the wide spectrum the company operates and the vast and diversified
geographic locations, Shell has always had a difficult time managing to comply to
some environmental laws. The fact that other operations such as oil and gas
production as well as transportations is being handled in certain regions that make
it more difficult to ensure safety or expose the flora and fauna to a higher degree of
risk have had its mark on the company. Beyond incurring significant additional costs
for the company due to the damage of the environment, a disastrous accident could
lead to a potential loss of license to operate in that specific region or maybe
altogether. To make matters worse, global economy has forced a major upheaval in
terms of conservation of the environment. Rules and policies are being changed or
enforced at a faster rate which in turn proves to have a higher impact on the
company due to the lower reaction time.
4.The economic slowdown in the US and European Union due to the debt crises
involving member countries presents a threat to the companys profitability.
Terrorism activities threaten the companys global functions by increasing related
business operational expenses. Fluctuating interest rates and the war in the Middle
East countries is also a threat to the company due to its global operations.

Sources (in APA format):

About Shell. (n.d.). - Shell Global. Retrieved September 30, 2014, from
http://www.shell.com/global/aboutshell.
Decoding the Ferrari-Shell partnership. (n.d.). Decoding the Ferrari-Shell partnership.
Retrieved October 1, 2014, from http://pitchonnet.com/blog/2013/03/07/decoding-the-ferrari-shellpartnership/
Royal Dutch Shell plc Annual Report and Form 20-F 2013 - About this Report. (n.d.). Royal
Dutch Shell plc Annual Report and Form 20-F 2013. Retrieved October 1, 2014, from
http://reports.shell.com/annual-report/2013/strategic-report/our-businesses/risk-factors.php

Royal Dutch Shell | SWOT Analysis | BrandGuide | MBA Skool-Study.Learn.Share..

(n.d.). Royal Dutch Shell | SWOT Analysis | BrandGuide | MBA Skool-Study.Learn.Share. . Retrieved
September 30, 2014, from http://www.mbaskool.com/brandguide/energy/406-royal-dutch-shell.html
Shell lawsuit (re oil pollution in Nigeria) | Business & Human Rights Resource Centre.
(n.d.). Shell lawsuit (re oil pollution in Nigeria) | Business & Human Rights Resource Centre. Retrieved
October 1, 2014, from http://business-humanrights.org/en/shell-lawsuit-re-oil-pollution-in-nigeria
Shell's track-to-road technology transfer with Ferrari. (n.d.).philstar.com. Retrieved October 1,
2014, from http://www.philstar.com/motoring/2012/07/11/826452/shells-track-road-technologytransfer-ferrari
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ABOUT ROYAL DUTCH SHELL

Shell is a global group of energy and petrochemical companies. Our
headquarters are in The Hague, the Netherlands, and our Chief Executive
Officer is Ben van Beurden. Shell has a single-tier Board of Directors
chaired by a non-executive chairman, Jorma Ollila. The parent company of
the Shell group is Royal Dutch Shell plc, which is incorporated in England
and Wales.
Our values:
As a global energy company we set high standards of performance and ethical
behaviours. We are judged by how we act - our reputation is upheld by how we live
up to our core values honesty, integrity and respect for people. The Shell General
Business Principles, Code of Conduct and Code of Ethics help everyone at Shell act
in line with these values and comply with all relevant legislation and regulations.
Our business:
Upstream
Our Upstream business searches for and recovers crude oil and natural gas. It
liquefies and transports natural gas, and operates the infrastructure needed to
deliver both oil and natural gas to market. The Upstream business also extracts
bitumen an especially thick, heavy oil from oil sands and converts it into
synthetic crude oil. We are also developers of wind power as a means to generate
electricity.

Our Upstream businesses are grouped into two organisational units: Upstream
Americas, covering the Americas, and Upstream International, covering the rest of
the world with major interests in Europe, Asia/Middle East/Russia, Australia/Oceania
and Africa.
Downstream
Our Downstream business manages Shells refining and marketing activities for oil
products and chemicals. Refining includes manufacturing, supply and shipping of
crude oil. Marketing sells a range of products, including fuels, lubricants, bitumen
and liquefied petroleum gas (LPG), for home, transport and industrial use.
Chemicals produces and markets petrochemicals for industrial customers, including
the raw materials for plastics, coatings and detergents.
The Downstream business also trades crude oil, oil products and petrochemicals
including supply to our own businesses and markets gas and power. It provides
shipping services by managing one of the worlds largest fleets of liquefied natural
gas (LNG) carriers) and oil tankers. In addition, Downstream oversees Shells
interests in alternative energy (excluding wind) and CO 2management.
Our strategy:
Meeting the growing demand for energy worldwide in ways that minimise
environmental and social impact is a major challenge for the global energy industry.
We aim to improve energy efficiency in our own operations: we support customers
in managing their energy demands and continue to research and develop
technologies that increase efficiency and reduce emissions in the production of
liquid products and natural gas.
Our commitment to technology and innovation continues to be at the core of our
strategy. As energy projects become more complex and more technically
demanding, we believe our engineering expertise will be a deciding factor in the
growth of our businesses.
Our key strengths include the development and application of technology, the
financial and project-management skills that allow us to deliver large field
development projects, and the management of integrated value chains.
We aim to leverage our diverse and global business portfolio and customer-focused
businesses built around the strength of the Shell brand.