1200 Formative Essay examples

1861 Words8 Pages
Sustainable Strategy - from Planning to Implementation M002LON

Afren plc’s Management Report

Itipat Therdchitpaisarn 6157391

Dr. Jonathan Groucutt

Words Count : 1285/1769

Submission Date: 23 MAy 2015
Executive summary The purpose of this report is to identify the key factors that affect in
Afren plc in the term of macro and micro environment, and to evaluate company position and strategic direction to make a recommendation to the company. By using PESTEL framework and Porter’s five force to analyze company external factors and SWOT analysis, VRIO framework and TOWS for internal factors that base on The company’s annual reports in years 2013 and 2014.

Introduction 1

PESTEL Analysis 2
…show more content…
Threat of Substitute (LOW)
Substitute products in the Porter’s model are referred to products from others industry. In this case, substitute products are the renewable energy sources such as nuclear power, solar power, coal, and wind power, which have high production cost and sunk cost. Therefore, the threat of substitute to Afren is still low.

Bargaining Power of Buyers ( HIGH )
As the growth in the shale, oil market is continuously increased the input of oil supplies in the market by 11 per cent, which make an oil price fall cause of overwhelming supply (Meyer,2013).As a result of this, the buyer has more choice to seek a supplier , which has a lower prices and better contract condition. Thus, these forces become a high threat to Afren.

Bargaining Power of Supplier (LOW)
The main supplier of Afren referred to the oil-rich country in Africa such as Nigeria, which is the main business unit of Afren (Afren plc.,2014). As Nigeria is supportive for foreign investment (Rice, 2014).

Rivalry Among the Existing Competitors (HIGH)
The international energy agency (IEA) report that global upstream expenditure and development in oil and gas industry has a strong growth by averaging 11 percent per year in 2000 – 2012 and
Open Document