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National University of Management

A case Study on Strategic Management



TOTAL Company










Group members:
1. Ky Sophan
2. Khun Linna
3. Pheng Chheanghong
4. Vong Rada
5. Lao Sophorn
6. Ouk Chandaravuth
7. Touch Chamrong
8. Sim Pheak
9. So Sokfai






July 2014













A case Study on Strategic Management

TOTAL Company






Table of Contents
I. General Overview of the Company ................................................................... 3
Company history ............................................................................................ 3
Major products and services ............................................................................ 3
Customers ..................................................................................................... 3
Strategic goal, vision, mission and values .......................................................... 3
Current corporate and business strategy ........................................................... 4
Major facing problems..................................................................................... 4
II. Environmental Analysis ................................................................................. 4
1) External Environment ................................................................................. 4
2) Internal Environment .................................................................................. 5
3) Construction of Matrixes: ............................................................................ 5
3.1. External Factors Evaluation Matrix (EFE Matrix) ........................................ 5
3.2. Internal Factor Evaluation Matrix (IFE Matrix) ........................................... 6
3.3. Internal and External Matrix (IE Matrix) ................................................... 6
3.4. Strategic Position Action Evaluation Matrix (SPACE Matrix) ......................... 7
3.5. SWOT Matrix ........................................................................................ 8
III. Conclusion and Recommendation ................................................................ 9
Conclusion ..................................................................................................... 9
Recommendation ......................................................................................... 10
Reference .................................................................................................... 10
Appendix ..................................................................................................... 10















TOTAL Company
A case Study on Strategic Analysis


I. General Overview of the Company
Company history

TOTAL S.A., a French socit anonyme (limited company) incorporated on March 28,
1924, together with its subsidiaries and affiliates, is the fifth largest publicly-traded
integrated international oil and gas company in the world
1
.

With operations in more than 130 countries, TOTAL has activities in every sector of
the oil industry: including in the upstream (oil and gas exploration, development and
production, liquefied natural gas) and downstream (refining, petrochemicals, specialty
chemicals, the trading and shipping of crude oil and petroleum products, marketing).
In addition, TOTAL operates in the power generation and renewable energy sectors
and has equity stakes in coal mines.

Major products and services
Oil and gas (Petrol, fluid, natural gas)
Specialty chemicals (Rubber)
Renewable energies (Solar, biomass)
Trading and Transportation
Marketing and Service Stations
2


Customers
Manufacturing
Transportation
Aircrafts
Consumers

Strategic goal, vision, mission and values

Vision:
Total's strategic vision, which combines performance and responsibility in an
integrated business model, coincides with rising energy demand and new
environmental challenges.


Mission:
To responsibly enable as many people as possible to access energy on a continent where demand
is constantly growing by focusing on three basic cornerstones:
Ethics
Safety
Corporate social responsibility (CSR)

1
Registration document 2013, Total S.A
2
http://www.total.com/en/energies-expertise/oil-gas


Current corporate and business strategy

TOTALs activities lie at the heart of the two biggest challenges facing the world now and in future:
energy supply and environmental protection. The Groups responsibility as an energy producer is
to provide optimum management of these twin imperatives.

TOTALs strategy, the implementation of which is based on a model for sustainable growth
combining the acceptability of operations with a profitable investment program, aims at:
- expanding hydrocarbon exploration and production activities and strengthening its
worldwide position as one of the global leaders in the natural gas and LNG markets;
- progressively expanding energy solutions and developing new energies to complement oil
and gas;
- adapting its refining and petrochemical base to market changes, focusing on a small
number of large, competitive platforms and maximizing the advantages of integration;
- developing its petroleum product marketing business, in particular in Africa, Asia and the
Middle East, while maintaining the competitiveness of its operations in mature areas; and
- pursuing research and development to develop clean sources of energy, contributing to
the moderation of the demand for energy, and participating in the effort against climate
change.
Major facing problems

Totals Controversies are as the following:

TOTAL met some challenges in operating in some countries such as Malta, Myanmar,
Italia, Iraq, Iran. Those challenges are bribe commission from bidding and tenders,
secure contract,
II. Environmental Analysis
1) External Environment

List of opportunities:
- Increasing fuel/oil price
- Increasing natural gas market
- More oil well discoveries
- Expand export market
- Increasing mobility of labor, capital and technology
- Demand shifts for renewable energy

List of threats:

- Government regulations
- High Competition
- Hybrid cars replacing petrol and diesel cars
- Depletion of natural energy resources.
- Disruption in gas supply
- OPEC restrictions.

2) Internal Environment

List of strengths:
- Strong corporate governance
- Strong corporate culture and management
- Strong on human resource, multi-cultural nations, there are 99,000 employees
in over 130 countries (include 31% of women)
3

- Strong corporate branding and marketing
- Financial strengths: Revenues EUR189,5 Billion; Net debt to Equity Ratio: 0.23
(2011), 0.22 (2012), 0.23 (2013); ROE: 19% (2011), 18%(2012), 15%
(2013)
4

- Standard of operation and environment: ISO14001
5

- Operation and marketing in more than 130 counties with 15,551 service
stations
6

- 5
th
ranked international oil company
- Research and development investment $7.1 Billions
- Involve more in corporate social responsibility
7


List of weaknesses:
- Sale decreased 5.23% in 2013, ROE decreased at 16.67% in 2013
8

- Total number of sites operated by the Group decreased from 867 to 858
9


3) Construction of Matrixes:
3.1. External Factors Evaluation Matrix (EFE Matrix)


Key External Factors Weight Rating
Weighted
score
Opportunities
Increasing fuel/oil price 0.05 2 0.10
Increasing natural gas market 0.10 3 0.30
More oil well discoveries 0.05 2 0.10
Expand export market 0.10 3 0.30
Increasing mobility of labor, capital and technology 0.06 3 0.18
Demand shifts for renewable energy 0.05 1 0.05
Threats

Government regulations 0.10 3 0.30
High Competition 0.20 3 0.60
Hybrid cars replacing petrol and diesel cars 0.05 1 0.05
Depletion of natural energy resources 0.10 3 0.30
Disruption in gas supply 0.04 3 0.12

3
Total at a Glance 2013, TOTAL
4
http://csr-analysts.total.com/key-indicators/economic
5
http://csr-analysts.total.com/key-indicators/environmental
6
Total at a Glance 2013
7
CSR Report 2013, Total company
8
http://csr-analysts.total.com/key-indicators/economic
9
http://csr-analysts.total.com/key-indicators/environmental
OPEC restrictions 0.10 3 0.30
Total Score 1.00 2.70




3.2. Internal Factor Evaluation Matrix (IFE Matrix)

Key Internal Factors Weight Rating
Weighted
score
Strengths
Strong corporate governance 0.08 4 0.32
Strong corporate culture and management 0.08 4 0.32
Strong on human resource, multi-cultural nations, there
are 99,000 employees in over 130 countries (include
31% of women)
0.09 4 0.36
Strong corporate branding and marketing 0.09 4 0.36
Financial strengths: Revenues EUR189,5 Billion; Net debt
to Equity Ratio: 0.23 (2011), 0.22 (2012), 0.23 (2013);
ROE: 19% (2011), 18%(2012), 15% (2013)
0.10 4 0.40
Standard of operation and environment: ISO14001 0.09 3 0.27
Operation and marketing in more than 130 counties with
15,551 service stations
0.10 3 0.30
5th ranked international oil company 0.10 3 0.30
Research and development investment $7.1 Billions 0.10 3 0.30
Involve more in corporate social responsibility 0.05 3 0.15
-
Weaknesses
Sale decreased 5.23% in 2013, ROE decreased at
16.67% in 2013
0.08 3 0.24
Total number of sites operated by the Group decreased
from 867 to 858
0.04 3 0.12
Total Score 1.00 3.44


3.3. Internal and External Matrix (IE Matrix)

EFE = 2.70 IFE = 3.44
E
F
E






3





2


1
IFE
4 3 2 1
I



II III
IV




V VI
VII


VIII IX




3.4. Strategic Position Action Evaluation Matrix (SPACE Matrix)


Strategic Position Rating

Financial strength (FA) +
Financial strengths:
Revenues: 189,542 (2013), 200,061 (2012), 184,693 (2011)
6
Decreased in ROE by 22% in 2013 4
Decreased in ROA by 21% in 2013 4
Earnings per share decreased by 21% in 2013. 3
Total assets growth rate: 1% (2013), 5% (2012) 5
Liquidity:
Current ratio: 1.37 (2013), 1.38 (2012), 1.36 (2011)
Quick ratio: 0.33 (2013), 0.32 (2012), 0.30 (2011)
Debt to equity: 1.32( 2013), 1.36 (2012), 1.40 (2011)
4
Decreased in growth rate by (0.05) in 2013 4
Average scores 4.28
Environmental Stability (ES) -
Productions disruptions due to political crisis -2
Low bargaining power -1
Technological change from fuel to renewable energy -3
Barriers to entry -1
Competitive pressure -2
Product demand -1
The fluctuation of oil price affects business environment -3
The economic environment is unstable especially in under developing
countries.
-3
Natural disasters -3
Average scores -2.11
Competitive Advantage (CA) -
Market share among the largest marketers in Western Europe, No. 1
marketer in Africa
10

-1
Product quality -2
Product life cycle -1
Customer loyalty, more than 3 million customers stop by TOTALs retail
outlets every day.
11

-1
Technological advantage High tech for industry -1
Control over supply chain and distribution operation over 130 countries
worldwide.
-1
Average scores -1.17
Industry Strength (IS) +
Low threat of substitutes 6
Growth potential 5
Profit potential 5
Financial stability 5
Technological know-how 4
Resource utilization 4
Capital intensify 5
Ease of entry into market 6

10
Registration document 2013, TOTAL S.A
11
Total at a Glance 2013, Total S.A
Average scores 5.00






X axis: CA + IS = -1.17 + 5.00 = 3.83
Y axis: FA + ES = 4.28 2.11 = 2.17






















3.5. SWOT Matrix

S

S1. Strong corporate governance
S2. Strong corporate culture and
management
S3. Strong on human resource, multi-
cultural nations, there are 99,000
employees in over 130 countries
(include 31% of women)
S4. Strong corporate branding and
marketing
S5. Financial strengths: Revenues
EUR189,5 Billion; Net debt to Equity
Ratio: 0.23 (2011), 0.22 (2012), 0.23
(2013); ROE: 19% (2011),
18%(2012), 15% (2013)
S6. Standard of operation and
environment: ISO14001
W

W1. Total number
of sites operated
by the Group
decreased from
867 to 858
W2. Sale
decreased 5.23%
in 2013, ROE
decreased at
16.67% in 2013

FA
Conservative +6 Aggressive
+5
+4
+3
+2
CA +1 IS
-6 -5 -4 -3 -2 -1 +1 +2 +3 +4 +5 +6
-2
-3
-4
-5
Defensive -6 Competitive
ES
S7. Operation and marketing in more
than 130 counties with 15,551 service
stations
S8. 5th ranked international oil
company
S9. Research and development
investment $7.1 Billions
S10. Involve more in corporate social
responsibility

Opportunities

O1. Increasing fuel/oil
price
02. Increasing natural
gas market.
03. Increasing mobility
of labor, capital and
technology.
0.4 More oil well
discoveries
0.5 Expand export
market
0.6 Demand shifts for
renewable energy



SO

S01. Expand Market distribution
Channels to other target countries.
S02. Increase renewable energies
to global market. (Solar or Bio).
S03. Increase chemical plant
worldwide.

WO

W01.
Developing
new strategies
for sale and
Marketing.

T

T1. OPEC restrictions
T2. Disruption in gas supply
T3. Depletion of natural
energy resources
T4. Hybrid cars replacing
petrol and diesel cars
T5. High Competition
Government regulations

ST

ST1. Research and develop new
technology for Hybrid car ,
ST2. Promote alternative energy

WT

WT1. Develop
strategic
alliance with
stakeholders
(Government
and OPEC.






III. Conclusion and Recommendation
Conclusion



Recommendation






Reference
2013 Activity Report, Total Corporate Foundation




Appendix





Chapter Responsible Closing Date
I. General Overview of the company
Company history
Major products and services
Customers
Strategic goal, vision, mission and values
Current corporate and business strategy
Major facing problems

Khun Linna
Seam Pheak
30 Jun 2014
II. Environmental Analysis
1) External Environment
Economic Environment
Political and Legal Environment
Social and Cultural Environment
Technological Environment
Ecological Environment
Government Agencies
Labor Supply
Creditors

Vong Rada
Chheang Hong
30 Jun 2014
2) Internal Environment
Corporate Culture
Human Resource Management
Marketing
Management
Accounting/Finance
Research and Development
Operation/Production
Management Information System
Ky Sophan
Chandaravuth
30 Jun 2014
3) Construction of:
- External Factors Evaluation Matrix (EFE
Matrix)
- Internal Factor Evaluation Matrix (IFE
Matrix)
Lao Sophorn
Sok Fai

30 Jun 2014
- Internal and External Matrix (IE Matrix)
- Strategic Position Action Evaluation
Matrix (SPACE Matrix)
- SWOT Matrix
III. Conclusion and Recommendation
Conclusion
Recommendation
Reference
Appendix
Ky Sophan

10 July 2014