BUSINESS

Royal Dutch Shell PLC

Executive Summary

The Royal Dutch Shell PLC is commonly known as Shell and is a global organization competing in the oil and gas industry. The headquarters of the companies is located in The Hague in Netherlands with the registered office being in Shell Center, London. The company is also one of the largest energy organizations and second largest in terms of revenue earned and belongs to the “Super-Majors” group of big six oil and gas companies. The number of supplier for Shell is low due to the fact that the company is vertically integrated in terms of processes from extracting oil to selling and distribution of it products. This means the bargaining power of suppliers remains low. The substitutes in the industry are defined as the alternative sources of energy which could include coal, solar, nuclear, hydropower and wind. For new entrants to match these companies, they would require a strong research and development department and scale economies. There have been instances, such as in Russia, where the governments have been accused of trying to regain complete control over natural gas and oil resources. Shell Petroleum had kept an eye on the situation and anticipated the outcome. A number of problems in the Soviet Union were economic in nature.

Royal Dutch Shell PLC

Business Overview

The Royal Dutch Shell PLC is commonly known as Shell and is a global organization competing in the oil and gas industry. The headquarters of the companies is located in The Hague in Netherlands with the registered office being in Shell Center, London. The company is also one of the largest energy organizations and second largest in terms of revenue earned and belongs to the “Super-Majors” group of big six oil and gas companies. The company has operations in more than 90 countries and produces about 3.1 million barrels every day. Shell operates more than 44,000 service stations around the world. The company also has a subsidiary in the United States, Shell Oil Company, which is one of the largest businesses. Shell conducts operations in two segments; upstream and downstream. The upstream sector is responsible for exploration and recovery of crude oil and natural gas reserves all over the world in collaboration with partners. The segment is also responsible for engaging in natural gas liquefying, cooling and transportation to end customers. The company also converts natural gas into liquid for cleaner fuels. Shell also markets renewable energy and has wind-powered turbines that generate electricity. The upstream segment is also involved in extraction of bitumen from sand and conversion of the sand in to crude oil (Rosner, 2006, pp. 212).

Porter's Five Forces of Shell Corporation

Bargaining power of suppliers

The number of supplier for Shell is low due to the fact that the company is vertically integrated in terms of processes from extracting oil to selling and distribution of it products. This means the bargaining power of suppliers remains low as Shell can perform a number of activities of its own relieving the company of the burden of ...