Swot Analysis on Retail Strategies of Iocl

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CHAPTER -1
INTRODUCTION

1.1 INDIAN PETROLEUM SECTOR

Management of retail business is the key determining factor in the success of any business. To gain a sustainable competitive advantage, a retailer needs to understand and satisfy the customer’s needs. This principle holds true in petroleum retailing too. All efforts at exploration and production, refining, distribution and marketing finally conclude at the retail point after moving through long complicated supply chain. The downstream business is extremely complicated and of substantial strategic importance to the national economy. Oil products, especially transportation fuels, play a key role in the national economic growth. This is what makes the retail business exiting and
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The government also proposes to hold the oil companies accountable for the quality of product dispensed through their network. Retail sales of diesel account for 80% of total sales and in petrol this percentage is 98%.

Price of petrol and diesel so far, has not been a differentiating factor in the retail business. Even after the dismantling of the administered pricing mechanism, the price of the product remains the same throughout the length and breadth of the country. It is a well known fact that the cost of the product is a very important factor in consumer choice. With the entry of a few private players, though in a small magnitude, a price war has already started at a few regions. This price war is going to become a reality in times to come when new entrants go for an aggressive expansion of their retail network. They have already sped up their efforts, commissioning new retail outlets in the past few years. At this stage, for the government oil companies, it is crucial to undertake a concerted effort at cutting down their costs and improving efficiency to effectively counter this challenge. Using information technology for supply chain management, and monitoring the quality and quantity of product can go a long way to improve efficiency and cut down costs.

One of the more visible transformations in the retail business of auto fuels is the realization by oil companies that most non-fuel activities can also be an important source of revenue

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