I created this presentation about Total company with my teammates during Strategic Management class.

1. TOTAL S.A.
Savino Bartolomeo
Paula Biste
Mathieu Picca
Lucas Pilleri
Raffaele Triggiano

2. AGENDA
 COMPANY PROFILE
 BUSINESS MODEL NALYSIS
 Value preposition
 Key activity
 SBU
 SEGMENTATION
 INTERNAL ANALYSIS
 Resourced Based view
 ESTERNAL ANALYSIS
 KSF Analysis
 Competitive Analysis
 Attractiveness
 McKinsey
 SWOT ANALYSIS
 STRATEGY
 ORGANIZATION

3. COMPANY PROFILE
TOTAL is one of the leading integrated oil and gas companies in the
world. The company is engaged in all aspects of the petroleum
industry, including upstream and downstream operations.
TOTAL is also active in the chemicals, coal mining, and power
generation businesses.
Total at a glance:
 Fifth largest publicly-traded integrated international oil and gas
company in the world
 96 104 employees.
 Operations in more than 130 countries
 Exploration and production operations in more than 40 countries.
 Producer of oil and gas in 30 countries.
 2011 sales: €184.6 billion.

4. BUSINESS MODEL
ANALYSIS

5. BUSINESS MODEL
Value proposition
Enable as many people as possible to access
energy in a world of constantly growing
demand

6. BUSINESS MODEL
Key Activities
 Upstream
 Exploration and production activities in more
than 40 countries
 Production of oil and gas in 30 countries.
 Production: 2.34 million barrels of oil equivalent
per day.
 Proved reserves: 11.4 billion barrels of oil
equivalent as of December 31, 2011 (2).
 Refine & Chemicals
 Marketing & Services

7. BUSINESS MODEL
Key Activities
 Downstream
 No. 1 Western European Refiner-Marketer and
No. 1 Marketer in Africa.
 One of the leading traders of crude oil and
refined products worldwide
 Refining capacity: approximately 2.1 million
barrels per day.
 Retail network: nearly 14,819 service stations.
 Sales of petroleum products: approximately 3.8
million barrels per day.
 Brands: TOTAL, Elf, Elan, AS 24

8. BUSINESS MODEL
Key Activities
Chemicals
 Total is one of the world’s largest integrated
chemical producers and a leader in each of
its markets - Petrochemicals and Fertilizers,
Specialties

9. BUSINESS MODEL
Summary
 Vertical Integration
 All activities fully integrated, advantage of sinergy
effects
 Total controls all stages of the value chain from
exploration till the delivering of the product to the
customer

10. BUSINESS MODEL
SBU
 Upstream
 Downstream
 Chemical

11. SEGMENTATION
Oil & Gas Green energies
• Exploration, • R&D
production and • Promotion
refining
Chemicals Supply &
• Oil and gas derivates Marketing
• Fertilizers • Sales of refined
• Resins products
• Retail

12. INTERNAL ANALYSIS

13. RESOURCE BASED VIEW
Tangible intangible human
•Infrastructure (off- •Perforation •Local employees
shore platform, agreements •Trading network
pipelines, •100 year of •Engineering
RESOUCES equipment) experience expertise
•Means of transport •Global mindset •Public relation
•High end •CSR values policy
technology
•Distribution p.o.s
Company know how Org. routine
COMPETENCES •Exploration; explotation •Logistic process
•R&D development •Local recruitment

14. EXTERNAL ANALYSIS

15. KSF - UPSTREAM

16. KSF – DOWNSTREAM

17. KSF – CHEMICAL

18. ATTRACTIVENESS
 Total is involving in project in order to
develop biofuels in partnership with the
leading companies in this sector
 Expanded production of solar photovoltaic
power
Investing in Renewable
Energies

19. COMPETITION ANALYSIS: WEIGHT AND
PERFORMANCE
Net results 2011
35 000
Exxon Mobil
30 000
25 000
Chevron
Royal Dutch Shell
20 000
BP
15 000
TOTAL
10 000
Conoco
Eni Philips
0
50 000 100 000 150 000 200 000 250 000 300 000 350 000 400 000 Revenues 2011

20. THE EVALUATION OF THE
ATTRACTIVENESS OF THE SEGMENTS
Global oil, gas & Global renewable
consumable fuels market energy market value
Year $ billion € billion % Growth Year $ billion € billion % Growth
2007 5,883.5 4,231.1 2007 433.1 311.3
2008 6,431.2 4,625.0 9.3% 2008 450.1 323.6 3.9%
2009 6,967.1 5,010.5 -35,8% 2009 461.8 331.9 2.6%
2010 9,026.9 6,491.8 29.6% 2010 484.9 348.6 5.0%
2011 5,797.6 4,169.4 38,3% 2011 500.3 359.6 3.2%
CAGR: 2007–11 10% CAGR: 2007–11 3.7%
Global specialty chemicals Global oil & gas marketing
market value and supply market value
Year $ billion € billion % Growth Year $ billion € billion % Growth
2007 691.3 496.9 2007 300.7 216.2
2008 733.9 527.6 6.2% 2008 361.9 260.2 20.3%
2009 683.7 491.4 -6.9% 2009 256.5 184.4 -29.1%
2010 735.0 528.3 7.5% 2010 313.3 225.2 22.1%
2011 767.5 551.7 4.4% 2011 399.8 287.3 27.6%
CAGR: 2007–11 2.7% CAGR: 2007–11 7.4%

21. INTERNAL ANALYSIS: MCKINSEY
MATRIX
Low Medium High
Oil and gas
Renewable
High
energies
Industry attractiveness
Marketing
Medium
and
supply
Chemicals
Low NB: The size
of the circles
represents
the market
Business strength (competitive position) value

22. SWOT ANALYSIS
Helpful Harmful
•A strong market •Oil spill in the Atlantic
Internal original
presence coupled with •Violation of anti-
integrated operations competitive laws
•Strong R&D capabilities
•Leadership position in
refining and marketing
•Expanded production of
External original
•Environmental
solar photovoltaic
regulations
Power
•Regulations concerning
•Strategic initiatives in
Iran
the area of biofuels
•The US credit downgrade
•Establishment of Jubail
may impact the future oil
Refining and
prices, placing a
•Petrochemical Company
downward
pressure on Total’s sales

23. STRATEGY

24. STRATEGIC ANALYSIS OF THE TOTAL
GROUP
 Factors influencing strategy decisions
 The fluctuation of gas and oil prices
 The increasingly more difficult access to reserves
 The scarcity of resources
 The increasing of geopolitics risks and petrol nationalism
 The change in global demand for petro products
 And the environmental issues
 Strategy in upstream
 Investment policy in exploration and extraction activities
 Geographic and technical diversification in the production of
hydrocarbons
 Integration into LNG
 Objective of becoming the 2nd world producer
 Huge investments in new projects to diversify supplying

25. STRATEGIC ANALYSIS OF THE TOTAL
GROUP
 Restructuring activities
 Adaptation of activities of refining in Europe to oil
demand
 Development of markets in Asia and Middle-East
 Reorganization of different poles in the Group
 Enlarging the energetic value offer
 Prepare the after-oil
 Improve the group image
 Development of biofuels, solar energies and nuclear
energy

26. ACTIVITIES REORGANIZATION
Current organization of Total’s activities
Upstream Downstream Chemicals
Exploration and Fabrication of
Refining and
production of petrochemical
distribution
hydrocarbons products
New organization of Total’s activities
Downstream- Downstream
Upstream industrial -commercial
Exploration and Refining and
production of Distribution,
fabrication of
hydrocarbons petrochemical marketing-
products supply

27. STRATEGY FOR THE LONG TERM
 Development in the solar and biofuels
sectors
 Long term strategy because preparation of the
change in demand for the next decades
Nuclear Alliance with EDF GDF Suez but
Fukushima events put a threat on
this project
Solar Acquisition of 50% in Tenesol, and
100% of Photovoltech, agreement
with Sun power to develop solar
panels
Biofuels Production of methanol and dimethyl
ether
Eolian Central built in Mardyck in the
Flandres

28. CORPORATE STRATEGY FOR UPSTREAM:
VERTICAL INTEGRATION
Upstream
 To answer the increasing demand in oil globally, Total
wants to develop the activities of extraction and
exploration of new reserves through vertical
integration, which provides the company with a good
supply chains control and improve efficiency

29. CORPORATE STRATEGY FOR UPSTREAM:
VERTICAL INTEGRATION
 Three main factors reinforce the interest for this integration:
 The average annual price of the barrel reached in 2011 an
historic price of 120 dollars and made profitable the exploitation
of reserves that require complex technology;
 The events in Libya and Iran encouraged Total to diversify and
to integrate its supplying;
 The exploitation margins have been reduced in refining (the
capacity of refining is greater than demand in Europe).
In October 2010 Acquisition of 60% of Yam’s petroleum, an
Ivoirian oil company, to get access to
offshore reserves
In January 2011 Exploitation agreements in Argentina to
exploit shale gas in Neuquen Lake
In March 2011 Acquisition of 33% in three agreements to
exploit Albert Lake reserves
In December 2011 Agreement with Novatek to exploit a field in
Russia by 2015 for 65,000 barrels a day
In January 2012 Acquisition of 25% of oil sands in Ohio,
USA, by creating a joint-venture with
Chesapeake and EnerVest

30. CORPORATE STRATEGY FOR DOWNSTREAM: VERTICAL
INTEGRATION AND GEOGRAPHICAL DIVERSIFICATION
 Downstream
 Improve presence in Liquefied Natural Gas (LNG) and obtain greater market
share
 Presence in North America, Algeria, Angola, Nigeria, Australia, Pacific Asia
 Development of liquefaction, regazification, maritime transport, stockage

31. CORPORATE STRATEGY IN DOWNSTREAM:
LINKED DIVERSIFICATION
 Due to low refining margins in Europe, Total decided to remove its activities
progressively in this sector and implanted them into the new emerging
markets of Asia and Middle-East.
 Furthermore, in order to improve the profitability of downstream activities,
Total announced in October 2011 the fusion of refining and petrochemicals
activities. This operation will allow industrial synergies with economies of
scope. They put in common the key resources and competencies of
both the refining and petrochemicals activities in order to create synergies
February 2010 Closure of refinery in Dunkerque, France
January 2011 Modernization of the refinery in Normandie
to readjust the production of diesel
February 2011 Selling of 48% of the Spanish CEPSA equity
for $3 billion in order to reduce the refining
capacities in Europe
October 2011 Announcement of the fusion between
refining and petrochemicals activities +
creation of a marketing-supply division, in
order to create synergies

32. CORPORATE STRATEGY FOR CHEMICALS: VERTICAL
INTEGRATION AND MARKETING DIVERSIFICATION
• Vertical integration: as for the other segments, Total wants to
reduce its costs and get higher market share through a lot of
acquisitions, and alliances, as illustrated in the chart below.
• Moreover, they intend to diversify their products within this
particular segment by proposing a higher range of petrochemical
products

33. SBU STRATEGY
VALUE Breaktrough strategy High & differentiation
GREEN
+
ENERGY
CHEMICALS OIL&GAS
Low and differentation Reference offer
- M&S
- + PRICE

34. Oil & Gas
• The need for oil and natural gas is steadily rising throughout the
world. Production tests are used to evaluate the feasibility and
profitability of the project. Total’s forecasts are based on an
expectation of strong production growth by 2015
Chemical
• We aim to unlock synergies to be more competitive, optimize the
management of feedstock streams, capital expenditures and
maintenance turnaround at certain production sites and pool
support functions

35. Green
• TOTAL has developed expertise in the power generation sector,
especially through cogeneration and combined cycle power plant
projects.
TOTAL has committed to developing innovative technologies to
improve its portfolio, becoming more specialized and provide
special product to the market
Marketing & Services
• Total is developing its activities in line with several objectives. We
aim to maintain our commercial competitiveness, In every
region of the world, the Marketing & Services organizes the sale
of products to meet local requirements.

36. FOCUS ON DIFFERENTIATION
LIMITATION FOCALISATION
GREEN
ENERGY
NICHE
PURIFICATION IMPROVEMENT
M&S
WHOLE
LOW HIGH
HAND HAND

37. MULTIDIVISIONAL ORGANIZATION

38. MULTIDIVISIONAL ORGANIZATION
ADVANTAGES
•Flexible (external influences and factors)
•Possibility to track the performance
• each branch is specialized in its own activities and competences.
DISADVANTAGES
•Duplication of central and divisional functions
•Likely to lose the central control
What do we do better:
Sharing BCP (best case practice)
Long term training policy: Personal developement & skill
developement
Doing more to reward all aspects of performance

39. CORPORATE GOVERNANCE
Total has been actively examining corporate
governance matters, with a:
 Board of Directors
 The Executive Committee
 Management Committee

40. CULTURE
Functional
division
National Funds Pilot project could
be funded, and with
future management
development
Organizational
•Attracting Talents
•Diversity Organizational The
•Employee Relations
•Fair Compensation
field individual
and Benefits Take in care of
•Developing Skills Christophe de
Environment issue Margerie (CEO)

41. ETHICAL BUSINESS CONDUCT
The core principles underpinning Total’s Code of Conduct are:
 Upholding human rights.
 Preventing corruption and fraud.
 Promoting free competition.
 Promoting financial transparency.
 Respect for people.
In all host countries where Total does business, Total educates and shares
with our employees our business principles and rules of individual behavior
— which are based on the values of respect, responsibility, integrity
and exemplary behavior — and requires employees to apply these
principles.

42. INITIATIVES AND PARTNERSHIPS
 The United Nations created the Global Compact in 2000
following a call by its Secretary-General urging businesses to play
an active role in the globalization process.
 Partner companies must annually reaffirm their
commitment and report their progress on one or more
principles on the UN’s Global Compact web site through
a Communication on Progress.
Total is involved even in:
 Extractive Industries Transparency Initiative (EITI)
 Voluntary Principles on Security and Human Rights (VPSHR)
 International Chamber of Commerce (ICC)
 International Petroleum Industry Environmental Conservation
Association (IPIECA)
 Institute of Business Ethics (IBE)
 Global Business Initiative on Human Rights (GBI)

43. STOCKPRICE DEVELOPMENT

44. STOCKPRICE DEVELOPMENT
 Compared to the market (CAC 40) Total’s
stockprice shows a paralel development with
only one critial price-fall in the last five
years by the end of 2008 due to the financial
crisis.
 Total S.A. makes 12.55% of this market
index, a fact which explains the similar
development of the firms stockprice.

45. STAKEHOLDERS
Employees
Activist
CEO
Groups
Owner
Customers
Shareholder
Total
S.A.
Creditors Suppliers
Governments Society

46. PRO SHAREHOLDER
 Strong shareholder policy
 Constant dividend growth
 Constant investment in new projects inspite
of their controversial nature
 Construction of a pipeline in Mianmar condoning
the use of civil sclavage inspite European’s
Union’s sanctions
 Acusations on corruption
 Corruption in the Italian division of the company
 Acusation of having done payments to Irqui
officers during Sadam Husseins regime to secure
oil supply

47. PRO STAKEHOLDER
 Strong engagement in CSR initiatives:
 Global Compact
 GRI: Global Reporting Initiative
 Due to local recruitment policy Total S.A.
contributes in the countries of operation by
creating jobs and enhancing economic
growth
 Strong commitment in R&D investment in
new energies to gradually leave energy
production based in fossil energies although
this sector doesn’t bring hughe revenue yet
(long term vision)

48. SOURCES
 http://www.total.com/
 Xerfi
 MarketLine