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STRATEGIC GLOBAL MARKETING: SHELL Essay

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Introduction:

The Royal Dutch Shell is one of the biggest multinational petroleum companies, with its basis of origin in Dutch and Britain. It was considered as one of the world's largest corporation by the Fortune in 2009. From its inception in 1907 till date, it has been able to emerge as a successful petroleum country reigning in the British markets. With its operations in 140 countries, the company has been able to successfully manage their business across borders, maintaining their core principles and values across all subsidiaries, in all countries. The company has been proactive in outlining a competitive strategy, increasing the product profile and entering newer markets at the right time[1].

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This was also done to ensure sustained development and growth and lowering of costs through improved efficiency.

The Royal Dutch Group of Companies had exceeded performance expectations, when looking at the bigger picture. Over the course of the years, from 1950s to 1990s, the company has been proactively venturing into different areas of energy production, meeting consumer demands and working with the environments, maintaining their position in the market. However, a slump came in their otherwise shining performance when the scandal of overstating their oil reserves came in the lime light.

Shell's performance, when compared to its peers in the market, was better than the average. In fact it was greater than the weighted average of the competition's return on capital employed. The peak of this return was in 2000-2001 when the ROACE increased to 22%. This shows that the assets employed in the company were providing returns greater than those of its competitors. However, in 2002, the slump in the ROACE is translating into a lower EPS for the stockholders as well. There is a marked difference between the Earnings per share from the year 2001 to the year 2002. The mis-reporting of oil reserves by the management of Shell lead to the slipping of the company's rating of triple A to AA plus. The lowering reserves should be a concern for the company as their main products were dealing with oil reserves. Cutting

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