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Case Analysis Of Chevron
GROUP MEMBERS
Rizwan Ashraf
Shahid Iqbal
Mushtaq Hassan Zeeshan Anwar
1879: CHEVRON began with an oil discovery in north of LOS ANGELES. 1900: Bought by standard oil corporation. 1906: Merged name become SOCAL. 1948: Entered into petrochemical industry. 1984: Merger between standard oil company and gulf oil. As a part of merger SOCAL changed its name to chevron corporation. 2001: Bought TEXACO for $37.5 billion. 2005: Acquisition of UNOCAL made chevron worlds largest producer of geothermal energy.
A World Class Global Energy Company
Chevron Corporation is an American multinational energy corporation There business oil, gas, and geothermal energy industries It including exploration and production; refining, marketing and transport; chemicals manufacturing and sales power generation 66,000 employees 18 refineries
5 popular consumer brands:
Chevron, Unocal,Texaco ,standard and Caltex 25,000+ service stations
5
At the heart of the chevron way is our vision ... to be the global environmental friendly energy company most admired for its people, partnership and performance
Chevron Standard Oil Texaco Caltex Unocal
Star Mart Extra Mile Redwood Market Town Pantry
Delo Havoline Revtex Ursa
Techron- Chevron Clean System
Royal Dutch Shell ExxonMobil BP ConocoPhillips
External FACTOR EVALUATION MATRIX
Opportunities 1 2 3 4 Increase usage for energy Increasing price of energy Increasing propensity of people to spend Increasing mobility of labor, capital and technology Weight 0.15 0.12 0.10 0.09 Rating 4 3 3 2
Weighted Score
0.60 0.36 0.30 0.18
Demand shifts for renewable energy
0.10
0.30
Threats
6 7 8 9 10 Depletion of natural energy resources Royal Dutch Shell and Exxon is rivalry in the industry Regulations restricted excessive emission of CO2 The credit crisis and volatile commodity prices of2008 OPEC restrictions, civil wars and hurricanes. Total 0.11 0.08 0.07 0.10 0.08 1.00 2 2 2 3 2 0.22 0.16 0.14 0.30 0.16 2.72
Internal FACTOR EVALUATION MATRIX
Sr.No 1 2 3 Strengths Spending on alternative energy 3.2 billion since 2002. Continuous investment in high profile projects to increase oil production. Outstanding earning $23.9 billion in 2008 Weight 0.07 0.08 0.11 Rating 3 3 3 W.Score 0.21 0.24 0.33
4
5 6 7 8
Achieve HART energy publishing refiner of the year award in 2009
Investment in 13 power generation projects in Asia and us 4th largest integrated energy company in the world. Operating in more than 100 countries and with around 25,000 service stations worldwide Had global refining capacity of more than 2 mm barrel per day.
0.08
0.10 0.08 0.10 0.08
4
3 3 3 3
0.32
0.30 0.24 0.30 0.24
Internal FACTOR EVALUATION MATRIX Internal FACTOR EVALUATION MATRIX
Weaknesses 71 % drop in income second quarter of 2009. Marketing operations lost $95 million in second quarter of 2009. stop drilling new gas wells in US continent. 51 % decrease in revenue. Chemicals significantly lower margins, lower income from equity. Total Weight 0.08 0.05 0.05 0.07 0.05 1.00 Rating 2 2 2 1 2 W.Score 0.16 0.10 0.10 0.07 0.10 2.71
Competitive Profile Matrix
CHEVRON EXXON MOBIL SHELL
Critical success factors Advertising Product quality Management Financial position Customer loyalty Global expansion Market share Logistics Production capacity Total weight 0.20 0.10 0.07 0.10 0.05 0.20 0.09 0.15 0.04 1.00 Rating 3 3 4 3 2 3 3 3 3 Score 0.60 0.30 0.28 0.30 0.10 0.60 0.27 0.45 0.12 3.02 Rating 3 4 3 2 3 4 3 3 3 Score 0.60 0.40 0.21 0.20 0.15 0.80 0.27 0.45 0.12 3.20 rating 3 2 3 3 3 4 4 3 4 score 0.60 0.20 0.21 0.30 0.15 0.80 0.36 0.45 0.16 3.23
Space Matrix
Financial position Spending on alternative energy 3.2 billion since 2002. 51 % decrease in revenue. Outstanding earning $23.9 billion in 2008 Marketing operations lost $95 million in second quarter of 2009. Rating 5 4 6 3 18\4=4.5 Industry position The demand of energy usage is increasing tremendously. High capital investment and the use of technology have created the barriers of entry. The company has investing for alternative energies. 6 5 5 Competitive position Achieve HART energy publishing refiner of the year award in 2009 Investment in 13 power generation projects in Asia and us 4th largest integrated energy company in the world. Operating in more than 100 countries and with around 25,000 service stations worldwide 16/3=5.33 -4 -4 -5 -5 -18/4=-4.5 -14\3=-4.67 Stability position The economic environment is unstable especially in under developing countries. The risk of expanding the business is greater due to natural disasters. The fluctuation of oil price affects business environment. rating -5 -4 -5
Space Matrix
The External-Internal Matrix
Boston Consulting Group (BCG) Matrix
DIVISION REVENUES MILLION $ Revenue % Profit million $ Profit % Mkt share Growth % rate %
1.Upstream and gas
2.Downstream 3.Chemicals 4.Power Total
1,28,747
47 %
18,187
76
24%
45 %
1,33,594 2,617 8,047 2,73,005
49 % 1% 3% 100
6,222 (239) 239.31 23,931
26 (1) 1 100
27% 20% 30%
30 % 5.96 % 32 %
Boston Consulting Group (BCG) Matrix
4 2
Quantitative strategic planning Invest in matrix solar and
Opportunities Weight
Invest in biofuel wind energy energy AS TAS AS TAS
Increase usage for energy
Increasing price of energy Increasing propensity of people to spend Increasing mobility of labor, capital and technology Demand shifts for renewable energy
0.15
0.12 0.10 0.09 0.10
2
2 2 2 4
0.30
0.24 0.20 0.18 0.40
4
4 3 3 3
0.60
0.48 0.30 0.27 0.30
Threats
Depletion of natural energy resources 0.11 2 0.22 3 0.33
Royal Dutch Shell and Exxon is rivalry in the industry
Regulations restricted excessive emission of CO2 The credit crisis and volatile commodity prices of2008
0.08
0.07 0.10
3 -
0.21 -
1 -
0.07 -
OPEC restrictions, civil wars and hurricanes.
0.08
0.16
0.08
Strengths 1 2 3 4 5 6 7 8 Spending on alternative energy 3.2 billion since 2002. Continuous investment in high profile projects to increase oil production. Outstanding earning $23.9 billion in 2008 Achieve HART energy publishing refiner of the year award in 2009 Investment in 13 power generation projects in Asia and us 4th largest integrated energy company in the world. Operating in more than 100 countries and with around 25,000 service stations worldwide Had global refining capacity of more than 2 mm barrel per day. weaknesses 71 % drop in income second quarter of 2009.
Weight 0.07 0.08 0.11 0.08 0.10 0.08 0.10 0.08
As 3 2 2 2 1 1
TAS
AS
TAS 0.21 0.44 0.24 0.24 0.40 0.24
0.21 3 -
0.22 4 0.16 3 -
0.16 3 0.10 4 0.08 3
0.08
Marketing operations lost $95 million in second quarter of 2009.
0.05
stop drilling new gas wells in us continent. 51 % decrease in revenue. Chemicals significantly lower margins, lower income from equity. Total
0.05 0.07 0.05 1.00
2.84
--
4.20
S # 1= invest in solar and wind energy
S# 2= invest in biofuels
= 2.84
= 4.20
Recommendations
Should have to sale its chemical business because it becomes
dog. Should invest in wind and solar energy.
Start exploration of gas wells
Get help from technology Should invest in bio-fuel energy sources. Should have to improve ethical operating standards
