Shell report prepared by Khanpersian50@yahoo.com

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OPERATION MANAGEMENTASSIGEMENT:
SHELL REPORT

ASSIGEMENT:
SHELL Petrolium
SUBMITTED TO:
Sir. Hashim Butt
SUBMITTED BY:
Khalid Mirza (F15-2075)
Syed Aitzar (F15-2089)
Zaman Ali (F15-2065)
Shugufta Shafiq (S16-2016)
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DEDICATION
We would like to dedicate this project to our parents who
cherished us in our childhood and always pray for our better
future.
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ACKNOWLEDGEMENT
All praises and thanks to Almighty ALLAH, the creator who is
the only source of knowledge and wisdom endowed to
mankind.
We feel much obliged to our beloved family members for
their moral support and encouragement. Particularly, we
have always been feeling our parents right behind us
praying, patronizing and enabling us to work out the era of
life both spiritually and physically and whose prayers was
incessant enabling us to acquire this stay.
We would like to thank our instructor Mr.IMRAN YOUSAF,
who was always there to guide us throughout the project and
without his guidance we would have never been able to
accomplish this task. We are also grateful to the Teritory
Manager of SHELL PETROL Mr. Syed Saad Shah.
We are also very grateful to all our well-wishers for their
support, love and sincerity. May Allah give them reward in
his bless and love.
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Table of content
• Executive summary…………………………………………......
• Introduction………………………………………….…….........
• Mission……………………………………………………………..
• Vision ………………………….………....................................
• Strategy…………………………..
• Ambition…………………………
• Shell History in Pakistan…………….…………...................
• Shell Worldwide……………………..…………………………..
• Project Engineering………………………………..
• Shell Forcasting……………………………………………
• Organaizational Structure…………………………………….
• Departmentalization Structure …....…...............................
• Product and Services ……………………………….…..……..
• Product Mix……………….....…………………………………..
• Product Lifecycle…..…..….................................................
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• Pricing……………………………..…….................................
• Market Trends…………………………………….………………
• Financial Performance…...….………………………………...
• SWOT Analysis……..……..……………………………………..
• Competitor Analysis ………………………………….…….....
• Current Marketing Strategy in Pakistan ………...............
• Marketing………………………………………………………….
• Advertising Promotion………….………..............................
• Target Market……………………………………………………..
• Market Sagmentation……………………………………………
• BCG Matrix………………………………………………………..
• Company’s Slogan………………………………………………
• Organizational Resources……………………………………..
• Virul Messages…………………………………………………...
• Conclusion………………………………………………………..
• Recommendation………………………………………………..
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Executive Summary
• Type Subsidiary
• Industry Oil and gas
• Founded1912; 104 years agoU.S.
• HeadquartersHouston, Texas, United States
• Key people Marvin E. Odum(President)
• Revenue US$ 2.147 billion (2008)
• [1]
Number of employees 92,000 (2014)
•
[2]
Parent Royal Dutch Shell
• Websitewww.shell.us
Shell is a superior brand name with more than 100 years
history in this region, in fact the company is still in
possession of a fuel storage tank from 1899. However, the
documented history of the Royal Dutch/shell group the Indo-
Pak subcontinent dates back to 1903 when a partnership
was struck between the shell transporter and trading
company and the Royal Dutch petroleum company to supply
petroleum products in Asia.
With their key indicators of progress already soaring to new
heights, Shell is committed to dedicate all its energies,
resources and the time to bring higher value and satisfaction
to their customers, employees and shareholders.
The graph of Shell is going up every year. The ratio of profit
is increasing at good percentage. Shell is serving the people
at high level of standard by going according to the wishes of
the customers.
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INTRODUCTION
Shell is a global group of energy and petrochemicals
companies. According to the manager, “With around
101,000 employees in more than 140 countries and
territories, Shell helps to meet the world's growing
demand for energy in economically,
environmentally and socially responsible ways”.
The Shell brand is one of the most familiar commercial
symbols in the world. Royal Dutch Shell is the world's largest
private sector oil company by revenue, Europe's largest
energy group and a major player in the petrochemical
industry. One of North America's leading producers of oil,
gas, and petrochemicals, Shell Oil Company has
distinguished itself through its commitment to industry
innovation. Its marketing expertise has enabled the company
to compensate for its relatively low volume of crude oil
production, as compared to its strongest competitors, by
selling an equivalent amount of gasoline nationwide.
Although the company conducts business primarily in the
United States, Shell also explores for and produces crude oil
and natural gas outside the country, both independently and
through joint ventures with other subsidiaries of its parent
organization, Royal Dutch/Shell Group. Shell Petroleum Inc.
is a holding company that is 60 percent owned by Royal
Dutch Petroleum Company and 40 percent owned by The
Shell Transport and Trading Company.
Shell has five core businesses: exploration and production,
gas and power, refining and marketing, chemicals, and
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trading and shipping. Shell's primary business is the
management of a vertically integrated oil company. The
development of technical and commercial expertise in all the
stages of this vertical integration from the initial search for oil
(exploration) through its harvesting (production),
transportation, refining and finally trading and marketing
established the core competencies on which the company
was founded. Similar competencies were required for natural
gas, which has become one of
the most important businesses in which Shell is involved,
and which contributes a significant proportion of the
company's profits.
Over the years Shell has occasionally sought to diversify
away from its core oil, gas and chemicals businesses. These
diversifications have included nuclear power (a short-lived
and costly joint venture with Gulf Oil in the USA); coal (Shell
Coal was for a time a significant player in mining and
marketing); metals (Shell acquired the Dutch metals-mining
company Billiton in 1970) and electricity generation (a joint
venture with Bechl called Intergen). None of these ventures
were seen as successful and all have now been divested.
If we talk about a single franchise, it provides:
• Oil change service
• Convenience store
• Gas
• Petrol
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MISSION STATEMENT
Manager of Shell in Islamabad defined the mission
statement of Shell Petroleum Pakistan as:
“Our aim is to meet the energy needs of society, in ways
that are economically, socially and environmentally
viable, now and in the future.”
Shell is basically an oil company. Its products include oils,
fuels, and card services as well as exploration, production,
and refining of petroleum products. The mission of this
organization is to manufacture and supply oil products and
services that satisfy the needs of their customers. Constantly
achieving operational excellence, conducting their business
in a safe, environmentally sustainable and economically
optimum manner, employing a diverse, innovative and
results-oriented team motivated to deliver excellencei
.
Obviously, an organization’s main purpose is meeting its
profit requirement, so Shell wants to meet the energy needs
of the society with high financial performance.
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VISION STATEMENT
To be the market leader and deliver the best value to their;
stake holders.ii
As the manager said:
“Our vision is to reinforce our position as a leader in the
oil and gas industry in order to provide a competitive
shareholder return while helping to meet global energy
demand in a responsible way”.
In Upstream they focus on exploring for new oil and gas
reserves and developing major projects where their
technology and know-how adds value to the resource
holders.
In Downstream their emphasis remains on sustained cash
generation from their existing assets and selective
investments in growth markets.iii
So, overall the vision of organization is to lead the oil and
gas industry and to develop itself according to the change in
demand of their customers in a profitable way but at the
same time, this way should be environmental friendly and
should not cause any harm to the social values. Shell is also
working for many social causes by operating different NGOs
for deforestation, betterment of education.
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COMPANY STRATEGY
Shell’s strategy seeks to strengthen our leadership in the oil
and gas industry, while positioning the company for growth
as the world transitions to a low-carbon energy system.
Safety and environmental and social responsibility underpin
our business approach.
In February 2016, Shell completed the acquisition of BG
Group, adding significantly to our activities in liquefied
natural gas (LNG) worldwide and deep-water oil and gas
production in Brazil.
Shell’s strategy is now centred on creating a simpler
company, one that offers better returns and growing free
cash flow per share. By investing in compelling projects,
driving down costs and selling non-core businesses, we will
reshape Shell into a more resilient and focused company.
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Shell ambition
• World-class investment case
• Relevant in our industry + growing value share
• Reducing our carbon intensity
• Shared value
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Shell History in Pakistan
The documented history of Royal Dutch Shell plc in Indo
Pakistan subcontinent dates back to 1903 when partnership
was struck between The Shell Transport & Trading Company
and the Royal Dutch Petroleum Company to supply
petroleum to Asia.
In 1928, to enhance their distribution capabilities, the
marketing interest of Royal Dutch Shell plc and the Burmah
Oil Company Limited in India were merged and Burmah
Shell Oil Storage & Distribution Company of India was born.
After the independence of Pakistan in 1947, the name was
changed to the Burmah Shell Oil Distribution Company of
Pakistan. In 1970, when 51% of the shareholding was
transferred to Pakistani investors, the name of changed to
Pakistan Burmah Shell (PBS) Limited. The Shell and the
Burmah Groups retained the remaining 49% in equal
propositions. In February of 1993, as economic liberalization
began to take root and the Burmah divested from PBS, Shell
Petroleum stepped into raise its stake to 51%. The years
2001-2 have seen the Shell Petroleum Company successively
increasing its share, with the Group now having a 76% stake
in Shell Pakistan Ltd (SPL)- an expression of confidence.
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Shell worldwide
Shell is a global group of energy and petrochemical
companies. There headquarters are in The Hague, the
Netherlands, and Chief Executive Officer is Peter Voser. The
parent company of the Shell group is Royal Dutch Shell plc,
which is incorporated in England and Wales.
Shell strategy seeks to reinforce their position as a leader in
the oil and gas industry in order to provide a competitive
shareholder return while helping to meet global energy
demand in a responsible way.
In Upstream they focus on exploring for new oil and gas
reserves and developing major projects where their
technology and know-how adds value to the resource
holders.
In Downstream they emphasis remains on sustained cash
generation from our existing assets and selective investments
in growth markets.
Their core values of honesty, integrity and respect for people
form the basis of the Shell General Business Principles.
Shell by numbers:
• + 90 countries where they operate
• ~101,000 number of employees
• 2% amount of world’s oil thy produce
• 3% amount of world’s gas thy produce
• 3.1 million barrels of gas and oil thy produce every day
• 44,000 Shell service stations worldwide
• 145 billion liters of fuel sold
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PROJECT ENGINEERING
Project Engineers at Shell work on some of the energy
industry’s most pioneering projects
Shell’s Project Engineers collaborate to help shape the
future of the energy industry , which is why we are proud to
retain the highest level of talent. The scale and ambition of
Shell’s global engineering projects – from gas-to-liquid plants
and floating liquefied natural gas projects, to offshore oil
drilling and production platforms – simply do not exist
anywhere else in the industry.
Global expertise
Shell’s Project Engineers innovate at every phase of their
careers, across countries, with colleagues from many
cultures and on pioneering, multi-billion-dollar projects.
From day one, your skills will form an important part of our
continued success. We recruit the very best which is why
you will have early accountability and responsibility for your
projects. Meanwhile you’ll have access to the tools and
processes for safe and consistent delivery of top quartile
projects, from the Assess to the Operate phase, working with
our Integrated Project Management System (iPMS).
Who are we looking for?
We seek ambitious and confident Project Engineers and
Project Managers who want to learn from, and work
alongside, leading industry professionals. We want to hear
from highly technical candidates with remarkable
professional experience who value safety above all else,
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have an international mind-set, and wish to connect and
build relationships with different cultures.
We develop and train Project Engineers and Project
Managers of all levels to reach their full potential at the
externally certified Shell Project Academy, in line with our
world-renowned competency programme.
Forefront of innovation
Our Project Engineers are at the cutting edge of the industry.
Take three of our largest projects, Pearl GTL, Prelude FLNG
and Perdido, all of which truly break new ground. Pearl GTL
in Qatar, for example, is the world’s largest plant converting
natural gas into kerosene, lubricants and cleaner-burning
fuels.
Perdido is the deepest offshore oil drilling and production
platform in the world, moored in 2,450 metres of water in the
Gulf of Mexico.
Prelude, meanwhile, will be the world’s first floating liquid
natural gas project.
Each is at the forefront of their respective technologies and
require innovations beyond anything ever seen before in the
industry. Our Project Engineers and Project Managers lead
these developments and the thousands of skilled engineers
who staff them to ensure they are run safely and efficiently.
Each project carves a path for our future. A Project
Engineering career at Shell is exciting, innovative,
rewarding, and will give you the chance to make an impact
on the energy industry.
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FORECASTING
Forecasting is the process of making predictions of the
future based on past and present data and most commonly
by analysis of trends. A commonplace example might
be estimation of some variable of interest at some specified
future date. Prediction is a similar, but more general term.
Both might refer to formal statistical methods employing time
series, cross-sectional or longitudinal data, or alternatively to
less formal judgmental methods. Usage can differ between
areas of application: for example, in hydrology the terms
"forecast" and "forecasting" are sometimes reserved for
estimates of values at certain specific future times, while the
term "prediction" is used for more general estimates, such as
the number of times floods will occur over a long period.
Risk and uncertainty are central to forecasting and
prediction; it is generally considered good practice to
indicate the degree of uncertainty attaching to forecasts. In
any case, the data must be up to date in order for the
forecast to be as accurate as possible.[1]
Qualitative vs. quantitative methods
Qualitative forecasting techniques are subjective, based on
the opinion and judgment of consumers, experts; they are
appropriate when past data are not available. They are
usually applied to intermediate- or long-range decisions.
Examples of qualitative forecasting methods are[citation
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needed]
informed opinion and judgment, the Delphi
method, market research, and historical life-cycle analogy.
Quantitative forecasting models are used to forecast future
data as a function of past data. They are appropriate to use
when past numerical data is available and when it is
reasonable to assume that some of the patterns in the data
are expected to continue into the future. These methods are
usually applied to short- or intermediate-range decisions.
Examples of quantitative forecasting methods are[citation
needed]
last period demand, simple and weighted N-
Period moving averages, simple exponential smoothing,
poisson process model based forecasting [2]
and
multiplicative seasonal indexes.
Stock Price Forecast
The 36 analysts offering 12-month price forecasts for Royal
Dutch Shell have a median target of 56.82, with a high
estimate of 67.26 and a low estimate of 40.77. The median
estimate represents a +13.87% increase from the last price
of 49.90.
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Analyst Recommendations
The current consensus among 40 polled investment analysts
is to buy stock in Royal Dutch Shell. This rating has held
steady since November, when it was unchanged from
a buy rating.Move your mouse over past
months for detail
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Financial Forecasting and Planning
Financial forecasts are, quite simply, your forecast of how
your business will perform financially over, say, the year
ahead.
Preparing forecasts will help you to assess your likely sales
income, costs, external financing needs and profitability.
Financial forecasts are essential if you need to raise money
from a third party, such as a bank. But they also provide you
with the means to monitor performance on, say, a monthly
basis and thereby exercise effective financial control -
arguably the second most important management function in
running a business.
Objectives
The aim of this section is to help you to prepare financial
forecasts. It will enable you to:
• understand costing and pricing;
• use break-even analysis as a way of setting sales
targets;
• understand financial forecasting; and,
• assess working capital requirements.
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ORGANIZATIONAL STRUCTURE
AND DEPARTMENTALIZATION
The organizational structure and departmentalization is as
follows:
• Organizational structure:
An organizational structure is a mainly hierarchical
concept of subordination of entities that collaborate and
contribute to serve one common aim. Shell is basically
a multinational corporation, so for operating
successfully worldwide, it needs to have a tall structure
which is further divided on the basis of geographical
regions, functions, goods and services. A tall structure
is one in which there are many supervisors handling
different tasks, it has more levels of authority. Shell has
a wide network of outlets and a very complex structure.
As it is a very large-scale organization, so it follows a
matrix structure. This means that employees are
grouped on the basis of function and product
simultaneously.
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As told by the manager, if we broadly see the organizational
hierarchy, it will be formulated as follows:
Board of directors
Zonal heads
Chairmen (regional/zonal)
Managing directors
Departmental heads
Regional Managers
Territory Managers
Franchise Heads
Service Heads (Petroleum, oil change, convenience store etc)
Front line Managers
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So, to sum up, the organizational structure is a tall one which
has further divisions such as zonal, regional or territory
heads (geographically speaking), then departmental heads
(when we talk about functions) and service heads are the
supervisors of specific services provided like head of
convenience store, oil changing department etc.
If we talk about a single shell outlet, it has:
Franchise Head
Service Heads (Petroleum, oil change, convenience store etc
Front line Managers
• Departmentalization:
Similarly, if we talk about a single Shell outlet, it has
following departments as told by the manager:
1. Petroleum:
Filling petroleum in vehicles.
2. Gas:
Filling gas in the vehicles according to their need.
3. Oil Change:
Changing oil in vehicles.
4. Convenience Store:
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Providing snacks and other things of basic necessity to
customers.
Now, if we take the whole organization in view, then it has
following departments:
1. Exploration and production:
To extract the petroleum and produce the fuel needed.
2. Gas and power:
The extraction of gas and power and its provision to service
outlets.
3. Refining and marketing:
To refine the extracted material and make it fit for use and
then its promotion etc.
4. Chemicals:
Different chemicals produced
5. Trading and shipping:
Trading it to different parts of world where Shell is working.
These were the major departments. Other than that, there
are separate organizations settled for handling management
activities such as human resource, controlling and
assurance etc.
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Product and Services
Product:
Anything that can be offered to market for attention,
acquisition, use or consumption that might satisfy a want or
need. The oil products of shell are given below.
Services:
Services are the form of product that consist of activities,
benefits, or satisfaction offered for sale that is essentially
intangible and do not result in the ownership of anything.
The services that provide shell Pakistan limited are given
below.
There is credit card that given to the customer, in presence
of these credit card shell provide all types of services without
getting charges.
When customer of shell going for pouring oil then also clean
the transportation that is coming for being filled the oil.
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Product Mix
“Product mix is the set of all the products offered for
sale by a company.”
The structure of product mix has both breadth and depth. Its
breadth is measured by the number of product line carried
and its depth by the variety of sizes, colors and models
offered within each product line. Thus the two main products
which Shell Pak. offers are fuel and lubricants. These have
further classifications in various constituents which form the
product line.
Product line:
Shell has two product lines namely, fuel and lubricants.
Fuel:
Shell offers a wide range of fuel. These are:
 Hi-Octane
 Super Unleaded
 Super
 Hi-speed Diesel
 CNG
Lubricants:
The various lubricants offered by Shell are;
 Rimula C
 Rimula D
 Rimula X
 Helix Plus
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 Helix Super
 Helix Standard
 Shell Helix(CNG)
 Product Life Cycle
• Product Life Cycle Stages:
Product Life Cycle means the changes in the sales volume
of the product over the life the product. In market there is
always ups and downs are present because this is a
dynamic world. Everything will have to finish after certain
time period, by finishing their life, so the life cycle of Shell is.
The stages through which individual products develop over
time are called Product Life Cycle. The classic product life
cycle has four stages.
• Introduction Stage:
At the introduction stage market size and growth is slight. It
is possible that substantial research and development cost
have been incurred in getting the product to this stage. In
addition, marketing costs may be high in order to test the
market, undergo launch promotion and set up distribution
channels.
• Growth Stage:
The growth stage is characterized by rapid growth in sales
and profits. Profits arise due to an increase in output
[economies of sales] and possibly better prices. At this
stage, it’s cheaper for business to inset in increasing their
market share as well as enjoying the overall growth of the
market. Shell Pakistan introduction stage is successfully
done because it comes from the international market and
enters in Pakistan market. Now company has about 40-
45.5% of market share and still growing
• Maturity Stage:
The maturity stage is perhaps the most common stage; it is
in this stage that competition is most intense as companies
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fight to maintain their market share. Here both marketing and
finance becomes key activities. Marketing spend has to be
monitored carefully, since any significant moves are likely to
be copied by competitors.
• Decline Stage:
In the decline stage the market is shrinking, reducing the
overall amount of profit that can be shared amongst the
remaining competitors. At this stage great care has to be
taken to manage the product carefully. Shell Pakistan is a
brand name and company is not in decline stage because
their sale increases day by day.
Pricing
Price is the amount of money for which a product is offered
in the market. The amount of money charged for the product
of services of sum of the value that consumer exchange for
the consumers exchange for the benefits for having or using
the product of services price is only which brings revenue in
the market, so it plays a tremendous role in the market.
Basic Objectives of Pricing
Survival:
Shell Pakistan ltd also tends to its lubricants in order to
survive the tough competition lubricants industry. The pricing
of fuels is not in the bands of Shell Pakistan limited or any
other such company.
Maintenance of current profit:
The next objective of pricing is the maintenance of current
profits. At the moment shell Pakistan ltd is the leader in fuel
and lubricants industry and there for tends to maintain its
profits through appropriate pricing.
Product quality Leadership:
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Shell lubricants and fuels have been especially formulated to
meet the demanding requirements of a wide range of
customers in most sectors of the company.
Selection of Pricing Method:
Companies usually select the price of their products in
accordance to the following three: customer demand
schedule, the cost function and competitors price. However
companies adopt various strategies in order to price their
products.
The strategies adopted by the shell Pakistan ltd are:
1: Price of competitor’s product
2: Price premium for high quality
3: Price premium for high purity
4: Price premium for better services
5: Is the appropriate price for shell.
Going price rate
“Going price rate means that a company bases the price of
its product in accordance to the price offered by its
competitors.” In fact shell Pakistan’s competitors are like;
1. PSO
2. TOTAL
3. ATTOCK
4. CALTEX
5. ADMORE
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INNOVATION
Innovation and technology are vital to providing a wider,
more sustainable mix of energy resources for the world’s
growing population. Thousands of Shell scientists,
researchers and engineers around the globe are working to
develop tomorrow’s ground-breaking solutions, collaborating
with experts and specialists beyond our industry.
Shell has been a technology pioneer for more than a
century. Today we are one of the largest investors in
research and development (R&D) among international oil
and gas companies. We employ around 43,000 technical
and engineering staff and spend $1 billion each year to turn
ideas into commercially viable technologies.
Scientists and researchers at our R&D facilities around the
world work across time zones to develop ground-breaking
innovations. These range from fuels and lubricants that help
customers use less energy to the world’s largest floating
production facility to unlock and liquefy natural gas at sea,
Prelude FLNG.
We also develop innovative ways to make our operations
more efficient and help manage water consumption and
carbon dioxide (CO2) emissions. In Canada, for instance, our
Quest project will capture and store up to one million tonnes
of CO2 from our oil sands operations every year, and store it
safely underground.
Working with others
We work with governments, world-class academics and
industry specialists to help meet the world’s growing energy
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needs, and we share ideas and expertise with partners
inside and beyond the energy sector to drive innovation
forward. For example, we are openly sharing our knowledge
and experience gained from developing Quest. Our
collaborations range from developing advanced fuels to
improving data processing within the IT industry.
We actively support such open innovation because it can
help speed up and deliver more cost-effectively
developments in areas such as natural gas, biofuels, solar
power, water treatment, CO2management and energy
efficiency.
Researching around the world
We operate a global network of R&D centres. These include
three major technology hubs located in India, the
Netherlands and the USA.
More than 5,000 scientists and technical specialists work at
these hubs on a broad spectrum of projects, such as turning
natural gas into more efficient and cleaner fuels, developing
technologies to unlock energy thousands of metres below
the sea surface, and improving energy efficiency in our own
operations.
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Market trends
Shell is always observing the new trends of the market; it
has accepted the new trends and is constantly in a process
of developing itself according to the needs of the new era.
According to consulted manager of shell:
“The 19th century was about coal, the 20th century
about oil and the fuel of the 21st century will be gas”.
So, now the organization is developing itself according to the
modern needs. They believe that the global trend is now
towards cleaner fuel and advances in technology. Their
vision includes to develop themselves according to the
changing environment and to provide quality service to their
customers. They have always ensured the quality of their
service to be the prior job.
In addition to the technology that allows them to discover oil
and to produce it, the technology which; allows us to
safeguard the environment has changed too. With this, they
have developed their organization accordingly. They seek a
high standard of performance, maintaining a strong long-
term and growing position in the competitive environments in
which they choose to operate.iv
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Financial Performance:
• Sales Analysis:
Shell Pakistan Limited reported sales of 63.63 billion
Pakistan rupees for the fiscal year ending June of 2001. This
represents an increase of 76.2%, versus 2000.When the
company’s sales were 36.12 billion Pakistan rupees.
During 2001, the company’s sales increased at a faster rate
than all three comparable companies. While shell Pakistan
limited enjoyed a sales increase of 76.2% the other
companies saw smaller increases; Chennai Petroleum
Corporation Limited sales were up 29.1%, National Refinery
Limited increased 15.9%, and Mangalore Refinery &
Petrochemical Limited experienced a sales decline of 6.3%.
Shell Pakistan Limited currently has 608 employees with
sales of 63.63 billion Pakistan Rupees.
• Stock Performance:
In recent years, this stock has performed terribly. In fiscal
year 2000 the stock traded as high as 367.50 Pakistan
rupees. During the past 13 weeks the stock has fallen 803%.
During the 12 months ending 30/06/01, earnings per share
totaled 30.12 Pakistan rupees per share. Thus, the
price/Earnings ratio is 5.48. Earnings per share fell 18.7% in
2001 from 2000.The Company’s price to book ratio is higher
than that of all three comparable companies, which are
trading between 0.25 and 0.97 times book value.
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• Profitability Analysis:
On the 63.63 billion Pakistan rupees in sales reported by the
company in 2001, the cost of goods sold totaled 44.75 billion
Pakistan rupees, or 70.3% of sales. This gross profit margin
is significantly better then the company achieved in 2005,
when cost of goods sold totaled 91.1% of sales.
Shell Pakistan Ltd’s 2001 gross profit margin of 29.7% was
better than all three companies.
The SWOT Analysis
THE SWOT ANALYSIS
STRATEGIC PLANNING THROUGH SWOT ANALYSIS
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SWOT stands for Strengths, Weaknesses, and Opportunities
&Threats. In which, Strengths and weaknesses are related
with internal environment of the organization and
opportunities and threats are related with external
environment of the organization.
Strengths:
 The managers regard their sub ordinates.
 Main focus of the organization to increase their
customers.
 Managers use participative approach.
 Their employees are highly motivated.
 They hire local employees.
 No clash with GOVT. or any agency.
 They care about the hygienic factor.
 Shell is using effective means for the promotion of its
products.
 Shell provides in time deliver to their petrol pumps.
 Incentive based policies for motivating employees.
 Shell has international Standard petrol pumps.
 Mobile training units keep the staff up-to-date.
Weaknesses:
 They are not offering any package to their regular
customers.
36

 They are not offering any bonus package scheme.
 Shell has eight regional retail managers. They are
insufficient to handle the problems.
 They have no proper shades and sitting arrangement at
the filling stations.
 There is no proper drainage system at filling station.
Opportunities:
 Shell is an international company so it should introduce
packages.
 Company has an opportunity to give special packages
to its employees.
 Company has opportunity to install more CNG as well
as petrol pumps in rural areas of Pakistan.
Threats:
Threats are actually competitors.
 PSO and CALTEX improvement.
 Installation of stations by TOTAL.
 The smuggling of petrol in Baluchistan from Iran.
 Entry of new companies in the refinery sector.
Competitor Analysis
Shell Pakistan Ltd. supports free enterprise. They seek to
compete fairly and ethically and within the framework of
applicable competition laws; they will not prevent others from
competing freely with them. Major competitors of Shell are
PSO with petrol pumps and Caltex with petrol pumps. But
shell Pakistan limited operates in the petroleum refinery
sector. Shell Pakistan limited also competes with three other
petroleum refiners in Asia. Shell Pakistan Limited Operates
in the Petroleum refining sector. This Analysis compares
37

shell Pakistan Limited with three other petroleum refiners in
Asia.
Pakistan State Oil
The past of PSO dates back to mid-70s when the
Government of Pakistan amalgamated three “Oil Marketing
Companies”: Esso Eastern, Pakistan National Oil (PNO) and
Dawood Petroleum as part of its “Nationalization Plan”.
The company is the only public sector entity in Pakistan that
has been competing effectively with three multinationals
(Shell, Caltex and Total). PSO is currently enjoying over
73% share of Black Oil market and 59% share of White Oil
market.
It is engaged in import, storage, distribution and marketing of
various petroleum products including mogas, high speed
diesel (HSD), fuel oil, jet fuel, kerosene, liquefied petroleum
gas (LPG), compressed natural gas (CNG) and
petrochemicals. PSO also enjoys around 35% market
participation in lubricants and is blending/marketing Castrol
brands, in addition to a wide array of its own. It is considered
as one of the most successful mergers in the history of
Pakistan. The company has retail coverage of over 3,800
outlets, representing 80% participation in total industry
network. The company has been the winner of Karachi
Stock Exchange Top Companies Award for many years
and is a member of World Economic Forum.
PSO serves a wide range of customers throughout Pakistan
including retail, industrial, aviation, and marine and
government/defense sectors. PSO has been meeting the
country’s fuel needs by merging sound business sense with
national obligation.
38

The Government of Pakistan (GOP) holds approximately
54% stake in Pakistan State Oil Company Limited (“PSO”),
including both direct holdings of the Federal Government
and indirect holdings through GOP owned institutions. The
GOP is in the advanced stages of divesting 51% of the in
PSO to a strategic investor.
Current Marketing Strategy of Shell
Pakistan Ltd
The current strategy of shell is concentrate on its business
and selected market areas. By using this strategy company
expands its business by upgrading petrol pumps in the
country.
Especially they are concentrating in the following three
areas:
 Customer Services
 Brand Image
 Quality and quantity
Customer:
Our customer is high class, low class and also middle class,
because every class is used petrol for consumption.
Customer Services:
Shell Pakistan Ltd is working for customer satisfaction
because customers play a very vital role in the prosperity or
failure of a particular company. That is the reason that shell
39

is operating with the basic aim to satisfy its customers and
provide better and better service to its customer. In brief it
can be said that shell gives a strong emphasis on customer
services.
Seven Steps for better Customer Services:
Every shell operation site follows the seven-point formula for
providing customer service to its customer is stated below:
1. As customer drive in, guide him to a vacant filing unit by
a neatly uniformed attendant of the petrol pump.
2. Then the attendant well comes to that customer from
the driver side.
3. Attendant takes the keys from the customer. After that
the attendant asks to the customer about the quantities
of fuel.
4. The attendant shows meter reading before filing the fuel
to the customer.
5. After filling the tank attendant tells the customer to see
the meter reading and amount of liters, hands over the
keys and takes amount from customer.
6. Attendant asks to the customer that he would like to
purchase an international high quality of Rimula X.
7. Then the attendant cleans windscreen of the vehicle
and say good-bye with smile.
By this procedure customer feels that he is being given
proper attention and he will come again to the filling station
to fill the tank of his vehicle.
Customer Knowledge:
Shell Pakistan is fully committed to achieve excellence in
customer services and product quality. This can only be
done by having complete knowledge of the needs and wants
of their customers. It is due to this reason that Shell Pakistan
has established a special customer service centre by the
name of “Shell Edge.”
40

Brand Image:
The Second strategy of shell is creating a strong Brand
image of the company in the customer mind. In Visual terms,
the installation of Shell’s Retail Visual Identity (RVI) makes a
striking and immediate difference between shell’s gasoline
stations and those of its competitors, Pakistan state Oil
(PSO) and Caltex. The RVI programmed is massive, for the
1200 or so sites which shell inherited through the takeover,
around two thirds are scheduled to be developed as RVI
sites, many of them being completely redesigned from the
underground storage tanks up. In addition, new sites are
being acquired in strategic locations
Marketing
At the moment Shell Pak. has a market share of about 40%
to 45% in Pakistan. It is trying hard to become the market
leader in Pakistan. Shell has strong distribution channels.
Their market size is very large. Therefore, marketing staff is
very efficient and their main objective is satisfying the
customer and people have the brand loyalty.
Market leadership due to innovation:
Shell is considered to be the market leader in innovation. It
was the first company to get legal approval to operate mini-
market. It was the first among its competitors to introduce
(rainbow) jet wash and (prosper) branded oil change facility.
It provides suggestive literatures to its customers while
launching a new product such as Helix super and Helix
Lubricant etc.
It was also the first company to introduce the concept of
Mobile Training Unit (MTU) for the purpose of training the
workers and workers and introducing quality and quantity
control units, which check the quality and quantity of major
gasoline at various filing stations.
41

Product knowledge:
As there are so many products offered by the shell, it is very
important that the customers have full knowledge about the
product. Shell Pakistan informs customers by their marketing
and positions itself in their mind.
Subliminal marketing:
According to the shell manager they do subliminal marketing
by keeping their prices high. High prices mean superiority.
This will automatically appeal to the customers as this is
human psychology high prices means high quality. So shell
will be considered as the best quality provider.
Advertising: Promotion
“Advertising is any paid form of non-personal presentation
and promotion of ideas, goods or services by an identified
sponsor.”
Objective of Advertising:
Another feature of a good market leader is to heavily
advertise in order to compete with the competitors and to
create more awareness amongst already existing and new
customers.
Shell also adopts the same strategy. It advertises both on
electronic and print media to keep its customers well
informed. The company has also started a magazine named
“Spirit” to promote its products.
Kinds of Advertisement:
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There are different kinds of advertisements which a
company may adopt during the PLC. Shell also requires
advertising its products in order to create awareness about
the new or already existing products.
The types of advertisements which Shell Pakistan Ltd. Has
adopted are as follows:
Informative Advertisement:
“The type of advertising which is done during the introduction
stage of a product is known as informative advertising.”
Shell adopted this strategy when it launched its Shell Helix
CNG Oil. It adopted all kinds of media to inform the public
about the new product. Shell advertised through Television,
News Papers, billboards, etc to build a good product image
in the minds of the customers.
Persuasive Advertising:
“The advertising done to compete with the competitors and
to create more demand of the product in comparison to the
competitor’s products, is known as persuasive
advertisement.”
Shell Pak Ltd. also adopts such strategy to compete with its
competitors. You must have seen various adds of Shell
featuring celebrities like Michael Schumacher in order to
make them attractive and also adds in which comparison is
made among Shell and competitor’s products. Comparison
features include purity, viscosity, efficiency and performance.
Kinds of Media to be used for Advertising:
“Media is basically a carrier which carries a message or any
kind of information from the sender to the receiver.”
The different kinds of media used by Shell Pak .Ltd. are:
1. Television
2. Radio(Especially FM stations)
43

3. Internet
4. Telephone Service (This function is performed by “Shell
Edge” customer services centers. Their toll free number
is 0800-22737)
5. Newspapers
6. Magazines (Shell has its own magazine “Spirit”)
7. Billboards
Target Market
A target market is the market segment which a particular
product is marketed to. It is often defined by age, gender
socio-economic grouping.
Targeting strategies is the selection of the customers u wish
to service. Including;
 How many segments to targets
 Which segment to target
 How many product to offer
 Which product to offer in which segments
There are three steps to targeting:
 Market quality
 Target choice
 Product positioning
Targeting strategy decision is influenced by:
 Market maturity
 Diversity of buyers need
 The companies size
 Strength of the competition
 The volume of sales requires for profitability
44

Market Targeting
It is the process of evaluating each market segment’s
attractiveness and selecting one or more segments to enter.
Market targeting depends upon the financial positioning of
company. If company is strong financially then he must go
for market targeting. Shell in Pakistan produces verities of
products. All these products are available urban as well as
rural area.
Market Segmentation
Market is the processing which dividing a market in to
distinct group of buyers on the basis of needs characteristics
or behave who might requires separate products or
marketing mixing.
Market consist of buyers and buyers differs in one or more
ways they may differing their wants, resources, locations,
buying attitude and buying practice.
Shell Pakistan ltd. Divide his market in to following
segments:
 Demographic segmentation
 Geographic segmentation
 Psychographic segmentation
Demographic Segmentation:
Demographic segmentation is dividing the market in to
groups based on demographic variables such as:
 Age
 Gender Education
 Income
45

 Family size
 Occupation
 Social class
Shell introduces their product for upper class, upper middle
class and middle class. In other words shell produces its
products for everyone who have automobile.
Geographic segmentation:
Geographic segmentation is dividing the market in to
different geographical units such as.
 Region
 Density
 Cities
This is all about the segmentation of shell. Shell provides
facilities of petroleum to urban as well as rural areas.
Segmentation basically depends upon
 Population of that area
 Living standards of people
Levels of Market Segmentation:
There are three levels of market segmentations
 Mass marketing
 Segment marketing
 Niche marketing
Mass Marketing:
Shell Pakistan limited go for the mass marketing because its
distribution is very extensive. Internationally its products are
goes into international market.
Marketing Channel:
46

“Marketing channels are set of interdependent organizations
involved in the process of making a product or service
available for use or consumption”
The entities involved in the distribution of Shell products in
Pakistan are:
 Supply Chain Department
 Shell Depots
 Distributors
 Fuel Stations
 Consumer
The BCG Matrix
Stars:
Stars are high growth businesses competing in the market.
Often they need heavy investment to sustain their growth.
Cash Cows:
Cash cows are low growth businesses with relatively high
market share. These are mature successful businesses with
relatively little need for investment.
Question Marks:
These are the SBUs with low market share but which
operate in higher growth market.
Dogs:
Dogs refer to businesses that have relatively low share in
unattractive low growth markets. Organizations prefer to
divest from dogs.
Shell in BCG Matrix
We put Shell in Stars in the BCG Matrix because shell has a
good market share and it has the opportunities to grow
more.
47

Effective Placement of Products:
Shell has established a special council called “Product
Placement Council.” Its sole function is to keep an eye on
proper placement of the various products offered by the
company. The council makes contracts with dealers and
retailers regarding the placement of the products and also
keeps checks in order to see that there is no violation of the
contracts.
Positioning:
The process of arranging of product to occupy clear distinct
and desirable place related to competing products in the
minds of target consumer. Shell Pakistan companies lies its
growth stage in the market and enjoys 65% shares. Now
gradually with the increase of growth rate is expands its
products line and also its distributions
.
Company’s Slogan
“You can be sure of Shell”
This slogan positions shell in customer’ mind as a reliable
company.
Responsibilities of shell:
Shell Pakistan Ltd. recognizes five areas of responsibility. It
is the duty of management continuously to assess the
priorities and discharge these inseparable responsibilities on
the basis of that assessment.
a. To shareholders
To protect shareholders’ investment, and provide a long-
48

term return competitive with those of other leading
companies in the industry.
b. To customers
To win and maintain customers by developing and providing
products and services which offer value in terms of price,
quality, safety and environmental impact, which are
supported by the requisite technological, environmental and
commercial expertise.
C. To employees
To respect the human rights of our employees and to
provide them with good and safe working conditions and
competitive terms and conditions of employment.
To promote the development and best use of the talents of
our employees; to create an inclusive work environment
where every employee has an equal opportunity to develop
his or her skills and talents.
To encourage the involvement of employees in the planning
and direction of their work; to provide them with channels to
report concerns.
We recognize that commercial success depends on the full
commitment of all employees.
d. To those with whom we do business
To seek mutually beneficial relationships with contractors,
suppliers and in joint ventures and to promote the application
of these Shell Pakistan Ltd. General Business Principles or
equivalent principles in such relationships. The ability to
promote these principles effectively will be an important
factor in the decision to enter into or remain in such
relationship.
e. To society
To conduct business as responsible corporate members of
49

society, to comply with applicable laws and regulations, to
support fundamental human rights in line with the legitimate
role of business, and to give proper regard to health, safety,
security and the environment.
Socio-cultural forces In Pakistan population is increasing
and social values are also changing so the demand of fuel
consumption is also increasing. People are coming from
rural areas to cities and their motor cycle for traveling.
Pakistan’s attempt to raise the living standards of its citizens
has meant that economic development has largely taken
precedence over environmental issues.
Organizational Resources
Shell has established 1404 petrol filing station in different
areas of Pakistan. But now the company is trying to reduce
the number of petrol filing station because they do not need
that filing station, whose monthly sales are less then 500000
liters. Up till now about 50 pumps are renovated in different
cities of Pakistan.
Number of Depots in Pakistan:
Shell has got 14 depots in different areas of Pakistan.
Types of Resources:
1) Marketing
2) Financial
3) Research and Development
4) Human Resource
5) Operation
6) Information System
50

Innovation the key to opportunity:
Innovation use of technology is the key to other possible
opportunities related to remote gas reserves that remain
stranded due to the prohibitive cost of development.
Research and Development:
Research and development strategy deals with product and
process innovation and improvement. Shell spends on
research and development more than most in the other
companies to differentiate the performance of its products to
its competitors.
Human Resources:
Shell provides the training facilities to their labor and
management to create the good relation to their employees.
Shell Company also motives its employees and provides
different incentive on their good performance.
Operation:
Operation of the company is based on continues
improvement is the acknowledgement that workers
experience and knowledge can help to shoe production
problem and contribute towards tightening variances and
reducing error.
Information System:
Shell design and manage high-class information system that
improves the productivity and decision-making. In
organization information may be collected, stored and
synthesized in such manner that answers important
operational and strategic questions.
51

Information system is one of the strength of the organization.
It provide aid in environmental scanning and in controlling
activities, it can also used as a weapon in gaining
competitive advantage.
SHELL TECHNOLOGY VENTURES
Advanced technologies and disruptive innovation are vital to
help meet future global energy needs. Shell Technology
Ventures (STV) invests in companies across the energy
sector to speed up the development and deployment of
technologies complementing our business.
Established in 1998 as the first corporate venture fund in the
oil and gas industry, we act as an investor and a partner in
the commercialisation of innovation.
STV’s investment focus is a mix of traditional oil and gas,
clean and green technologies, funds-of-funds and supporting
companies to spin out. We consider companies in all stages
of maturity, from seed to growth.
As well as funding, we can offer companies technical and
scientific expertise, R&D facilities and field trial pilots to
further develop and demonstrate their concepts. We also
provide unique access to a global customer base and to an
extensive supplier and contractor network.
The team
Our STV team works closely with entrepreneurs, industry
partners and the venture capital firms that invest in
them. Meet the STV team and see where our people are
52

based, what our different focus areas are and how you can
get in touch with us.
Read an interview with Geert van de Wouw, Managing
Director of Shell Technology Ventures, on his tips for turning
bright energy ideas into commercial innovations:
CONCLUSION
Shell is a global group of energy and petrochemicals
companies. Its products include oils, fuels, and card services
as well as exploration, production, and refining of petroleum
products .As like other organizations Shell has its own
Mission, Vision, ways of carrying out the all the marketing
functions. It has its own structure and hierarchy as well as
leadership style. It functions as a complete organization
having its braches worldwide carrying out different strategies
and techniques to reach its goals and mission.
It has positioned well in customers mind and has created
good brand image. All of its marketing strategies are very
effective and are helping Shell reach the heights. Shell
Pakistan has maintains its image in this fast moving world
with its core values and giving more importance to its
customers. With the research and development that its
departments carry puts the results into time-to-time changes
and innovations that lead the organization to better
performance and achievement of goals.
53

Recommendations
 There should be proper shades and proper sitting
arrangements at the filling stations.
 Lubricants should be disposed in a proper way to
protect the environment from being polluted.
 Shell should provide small incentive to its customers.
 Schemes like “buy 50 liters of super and get a cola drink
free”, should be kept introducing time to time.
 Shell should make company operation site in every city
to capture the new market.
 There is only one thing that is constant that is change;
shell should invest on research& development to cope
with dynamic environment.
 Company should establish new regional office to control
the activities of company operations.
 The company should provide the facility of free oil
change on all its outlets.
 Shell should develop modern retail outlets. These
outlets should have all possible facilities for customers
because one of the reasons behind decrease market
share is modernization of competitors.
 Shell should develop effective marketing programs that
help the company to increase sales that will lead to
increase the market share. In these market programs
emphasis should be given to advertising, which is the
most effective and efficient tools of promotion for such
type of business.
54

References
 http://shell.com
 http://wiki.answers.com
 http://allbusiness.com
 http://en.academic.com
 http://thefreedictionary.com
 http://scribd.com
 http://wikipedia.com
 http://soopertutorials.com
 http://shell worldwide.com
55

Shell report prepared by Khanpersian50@yahoo.com

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Shell report prepared by Khanpersian50@yahoo.com