Strategic Management Woodside Petroleum

Question: Discuss about the Strategic Management for Woodside Petroleum. Answer: Introduction Strategic management involves the formation of the objectives, policies and procedures for the organization. Besides this, it also facilitates in allocation of the resources to different departments in order to implement plans to achieve the common goal and objectives of the business (Hitt, Ireland and Hoskisson, 2006). In addition to this, it also takes into consideration the analysis of the business environment for the purpose of implementation of the policies and procedures in an effective manner for the purpose of attaining goals and objectives of the business. This report emphasizes on the strategic development of the Woodside petroleum. Development and growth of the organization by the application of corporate strategies The mission of the company is to increase the returns of the shareholders by the way of becoming a global leader in upstream oil and gas. In order to achieve the mission and vision of the company, it emphasizes on three aspects namely increasing the value of core assets, growth of the portfolio of the products and services delivered and enhancing the capabilities in terms of processes and procedures. The company has a reliable asset base and builds strong relationships with its stakeholders which help in gaining a competitive edge over other market players (Woodside Petroleum, 2016). The company has built distinctive capabilities in the value chain of oil and gas and has developed the construction, design and operation of different segments such as FPSO operation, seismic acquisitions and processing, sub sea technology and deep water drilling. In addition to this, the company has adopted new technologies in its different operations such as floating LNG, modular and near shore liquefaction technologies and different sub sea and seismic processing technologies which helps in reducing the operating costs and improve maintenance outcomes. In addition to this, the company also emphasizes on increasing the petroleum provinces by concentrating on the existing areas of Sub-Saharan Africa, the Atlantic margins and Australia (Haugan, 2012). Besides this, it also decides to make corporate and assets acquisitions that helps in increasing the shareholder value and results in managing the risk in an appropriate manner. The company follow five values which helps in attaining its goals and objectives namely working sustainably, respect, integrity, working together, excellence and discipline. The company believes in maintaining its leading position in Australia by maximizing the producing assets and grabbing the opportunities available in the market for the purpose of expansion of its business in other areas of the world. In addition to this, the company engages its employees in the decision making process which helps in improving the performance and productivity of the company. The company enters into partnership agreements with suppliers and business partners in order to deliver the products and services to its customers in a timely manner with high quality and reasonable price (Mokhatab, et al., 2013). The company in order to remain sustainable in the business and achieve competitive advantage makes investments in research and development for the purpose of bringing innovation in terms of technologies and products and services to remain competitive in the market. The company uses advanced analytics and artificial intelligence in its operations which results in improving its productivity and eliminates the occurrence of human error in the operation. In addition to this, the company has also entered into acquisitions which help in the expansion of the business in other countries. In addition to this, the company has also planned to enter into new markets such as New Zealand and Ireland through leveraging deep water capabilities. This facilitates in improving the profitability of the business. This is because; the company has made investment in research and development to develop new in-house capabilities for increasing the range of development solutions (Schueler and Buckley, 2014). Controversy related to Browse LNG project in Western Australia The governments i.e. Federal government and Western Australia government has signed an agreement to assess the locations for processing facility of LNG for the Browse Basin reserves. The agreement provides the information that there is a necessity to assess the sites outside the Kimberley. But the outcome is that no sites outside the Kimberley is considered and results in the occurrence of the legal challenges. Along with this, the company has also received an acceptance from traditional owners in Kimberley to construct gas processing hubs in the north of Broome and allow provision of more than $1 billion as compensation to traditional owners for 30 years. The company with its joint venture partners such as BHP Billiton, Chevron and Shell grant five year leases despite of the slow progress plans to tap the reserve. The company abandons or closes down is Browse LNG Project in Kimberley as it does not adheres to its commercial requirements through its technical and financial evaluation (News, 2013). Controversy related to the expansion of the business operations in Africa Despite of the falling prices of oil, the company has planned to expand its business operations in Africa after Tanzania. There is a presence of plenty of resources in east and west Africa. In addition to this, the company has also made strong relations with its stakeholders which also portrays wining situation for the company. There is a presence of huge opportunities for the company in Africa due to the presence of huge market potential. The company has opened exploration positions in eight new countries in the year 2012. In addition to this, the company has also entered into a joint venture with a company in Tanzania but withdraw its project after carrying out seismic survey. The company has explored various opportunities in East Africa without its formal presence in the region. There is a presence of 95 onshore geological rift basins in east Africa. Besides this, most of the oil and gas potential is in the 3500m deep in the water. The company is experiencing the exploration of th e gas at such depth. The outcome is that the company has explored various opportunities and plan to invest in emerging provinces in the region in next few years (Bhorat, et al. 2014). The oil and gas industry has a steady growth in Australia as it is set to become the largest LNG producer in the world. There is an establishment of new projects in the country despite of rising costs and increase in competition. Besides this, there is an existence of the stable political parties which has a positive impact on the business operations of Woodside Petroleum (The Oil Gas Year Australia 2009, 2009; Fraser, Ellis and Hussain, 2008). Economic factors the economy of Australia is stable with increased FDI inflows. It is expected that the GDP of the country will grow to $1.93 trillion by 2017. There is a huge potential for mining industry, oil and gas industry and manufacturing in the country. In context of Woodside Petroleum, the company deals in oil and gas industry due to which it has huge opportunities for growth and development in the country (Inkpen and Moffett, 2011). Social factors In this changing business environment frequent changes have been taking place in the tastes and preferences of the customers. Nowadays, people are attracted to those companies who have embedded eco-friendly processes in their business operations. In context to Woodside Petroleum, the company has adopted new technologies that results in lowering of the carbon footprint in the environment. Thus, the company attracts large number of investors and customers to make investment in the company (IBP, Inc, 2015; Mearns and Yule, 2009). Technological factors Rapid changes have been taking place in the technology due to which companies are forced to adopt new technology which facilitates in reducing the occurrence of errors. Besides this, it also helps in optimizing the use of available resources and lowers production cost. In the context of Woodside Petroleum, the company has adopted new technologies for the exploration of the oil and gas from different locations in less time. This helps in attaining competitive advantage over other players in the market (IBP, Inc, 2015). Environmental factors Nowadays, the society has become aware about keeping clean the environment due to which companies have to adopt those processes and practices that reduces the emission of the hazardous material in the environment. This is the reason that companies has adopted such technologies in its process that reduces the carbon emission in the environment. In regard to this, Woodside Petroleum has also adopted such technologies in exploration of the oil and gas products that results in low emission of hazardous gases in the environment (Perks, 2012; Beers, et al. 2007). Specific Environmental Analysis Customers The main customers of the company include corporate and countries and individuals that are in need of fulfilling their energy needs in Australia. Along with this, it also focuses on the enterprises that focus on producing energy for the people who depend on the by- products of the petroleum for domestic uses in 20 countries (Stationery Office and Webster, 2010). Industry The company operates in energy sector. Besides this, it also operates in oil and gas industry and it is the largest company in the industry due to which it is considered as a market leader (McCabe, 2009). Competitors The key competitors of the company includes ROC Oil Co. Ltd, Exxon Mobil Australia and China Petroleum Chemical Corporation (Woodside Petroleum, 2016). Internal Environmental Analysis The company has employed around 3000 full time employees. Besides this, it also engages its employees in decision making process which helps in increasing the level of commitment of employees towards the company and helps in improving their productivity and performance (Hitt, Ireland and Hoskisson, 2006). The company has reduced its expenditure on formal education program and focuses on developing leaders within the organization. The company give emphasis on experience and relationship based learning and provide in-house training for the purpose of sustaining growth and development of the company (Ogidefa, 2015). The company simplifies its processes so that employees can easily understand the processes and implement it with the safety to enhance their productivity and performance and achieving the common goal of the business effectively and efficiently (Woodside Petroleum, 2016). The company makes huge investments in research and development for the purpose of adoption of new technology or bringing innovation in the products and services offered by the company. This helps in making optimum utilization of the available resources and reduced time to produce them (Woodside Petroleum, 2016). SWOT Analysis Strengths The company is a market leader in the industry and is able to attain distinct and sustainable competitive position in the market. It also has high quality assets related to oil and gas in the richest basins of the world such as Carnarvon Basin. It is the largest producer of LNG and focuses on the adoption of new technological capabilities and innovations. It has activities primarily related to deep water provinces in Australia. It also has achieved a competitive advantage and reliability in production due to presence of expertise in construction of vessels and pipe lay barges due to expertise in design capabilities (Cheverton, 2005; Gautier, et al. 2009). Weaknesses The financial performance of the company is negatively affected by the legal problems associated with the land acquisitions for Browse LNG. There is also an occurrence of protest against the involvement of the company in the proposal for the construction of the gas industrial complex in Kimberley region of the country. The oil detector was failed at the Vincent oilfield in Western Australia of the company that negatively affected the productivity of the company (Ogidefa, 2015). Opportunities Expansion of the LNG capabilities results in the expansion of the LNG capabilities of the company and improves the financial position of the company. The offshore and onshore supply of a gas can be maintained by the development in North West Shelf. The company can secure its international growth opportunities in the emerging basins by entering into an agreement with Daewoo international Cooperation (Woodside Petroleum, 2015; Ramesh, Prakash and Shukla, 2010). Threats There is an occurrence of many natural disasters such as floods, landslides, earthquake and cyclones which poses a threat on exploration of the oil and gas products from different basins. There is also a presence of operating risks associated with the exploration and production activities (Hitt, Ireland and Hoskisson, 2006). Leadership style existed in Woodside Petroleum The leadership style adopted by the company is transformational leadership in which a leader work together with the other employees of the organization in order to bring needed change in the organization in a successful manner. In context to Woodside Petroleum, the company engages employees in the decision making process by considering their views and opinions. This helps employees to feel a sense of belongingness with the organization. This also results in increasing the level of commitment with the organization and thereby results in increasing their performance and productivity. Along with this, the employees are informed about the changes to be brought in the processes and policies of the organization on a regular basis as it helps in adoption of the change in the organization in an easy manner (Woodside Petroleum, 2015). Conclusion It can be concluded that the company has adopted transformational leadership style which results in the engagement of the employees in the decision making process. Besides this, all the relevant information is communicated to the members of the organization that are affected by the changes taking place in the organization. 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