Corporate & Business Strategy
essay about …
Part 1: choices, justification and critical evaluation of the models
Total is a part of the most important five oil groups at the world level. There is also Exxon/motive, Royal Dutch Shell, ConocoPhillips and British Petroleum: Total is on the fifth place. Total Group is present in the different domains of the "life cycle" of theoil; the Group is present on the exploration until the derivative products sale (fuels, plastics…). Christophe de Margerie is the Chairman and Chief Executive Officer of the Group which counts more than 90.000 employees and which is present in more than 130 countries. To analyze this firm, I took these two points: environmental analysis and organizational structure analysis. We can define thestrategy as a suite of decisions and actions to look for and obtain a competitive advantage to guarantee to the company competitiveness and profitability on the long term. Now, for it, the company needs to understand the environment in which it evolves. Environmental analysis: I’m going to talk about the external environment of the firm using: PESTEL PESTEL analysis is one of tools allowing making adiagnosis on all the elements which influence the company and so on which it can act. Then the synthesis of the analysis PESTEL has to allow making new segments of activities and a general policy for years to come. So to make the analysis PESTEL of Total, it is advisable to wonder, what are the factors which affect it’s organization and what among them are the most important to take into account todayand in the years to come. Porter five forces This analysis o o o o is about factors influencing the performance of a company by five strengths: Threat of substitute product, new entrants Bargaining power of suppliers, of buyers Rivalry among existing competitors Role of the state ( 6th)
Essential point of Porter 5 forces consists in organizing into a hierarchy these strengths so as todetermine what are the strategic elements which it’s advisable to control to obtain a competitive advantage. Limits: o o o The model doesn’t confront the synergies and the interdependence of the business portfolio of the big companies The model doesn’t include the possibility that a company is attractive because certain companies are applied to it It’s possible to create new markets instead of using thosealready existing
Organizational structure analysis: I’m going to talk about internal environment of Total using: SWOT It’s an analysis of the threats and the opportunities allow determining the key factors of success. It’s the strategic elements that the company has to overtake to surpass the competition. Limits: o o o The fact that during the evaluation of the strengths and theweaknesses, the learning is underestimated The reflection is too much disjoin from the action The environment can change permanently
So SWOT has to be used as a guide and not as a recipe to be applied in a strict and binding way. Mc Kinsey matrix It’s a model to do an analysis of business portfolio Strategic Business Units (SBU) of a company. The Matrix Mc Kinsey is more sophisticated than the MatrixBCG on three aspects: o The attraction of the market o The competitive strength o The Analysis of the Activities leans on a matrix 3*3 To apply the Matrix Mc Kinsey, the approach is made in six steps. Limits: - The evaluation of the realization of the diverse factors (mailmen) - The aggregation of indicators is difficult - The hearts of skills aren’t represented - The interactions between Unities(Unit) of Strategic Business (Affairs) aren’t considered
Part 2: analysis of Total
Total Group divided his activities in three centers of profits. It stays a complete group and manage upstream, downstream and a chemistry. Organizational structure analysis: The strategic fields of activity o Upstream: it’s about all the activities in contact with the research for oil and natural gas, as...
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