The SWOT Matrix

Given the strength and opportunities of the company, the Strength-Opportunity (SO) strategies
that can be outlined are:

1. Extend number of service location to more rural area to capture more market share (S1,
S7, O1, O3)
2. Promote renewable energy worldwide (S3, S7, O5)
3. Research for renewable energy and alternative energy (S4, S5, O5)
4. Increase number of refineries and chemical plant worldwide (S3, S7, S8, O2, O4)

And with the given weaknesses and opportunities, the Weakness-Opportunity (WO) strategies
that can be outlined are:

1. Promote LNG energy as the most cost effective as alternative energy for petrol vehicles
(W2, O2)
2. Relocate chemical plants to more cost-effective location to cut down operating
expenses (W4, O4)

The Strength-Threat strategies that can be outlined are:

1. Promote alternative energy (S3, S5, S7, T2)

2. Develop alternative way of supplying gas which will reduce disruption (S2, S4, T6)
SPACE Matrix

For the financial position of Shell, it is divided into three major categories; net income,
working capital, and good will. Based on the findings, below are the ratings for Shell’s financial
position:

1. It has an income of $USD26.5 billion and a capital investment of USD$38.4 billion.

This indicates an average working capital.
2. It has invested in research and development for more than USD$12 billion. This
indicates a strong good will.
3. It experienced a decrease in net income to USD$5 billion compared to last year. This
indicates low net income.

To summarize, Shell’s financial position can be rated as follows:

Working capital 4.0

Goodwill 7.0
Net Income 2.0
Financial Position Average 4.3

For the industry position of Shell, it is divided into three major categories; growth
potential, profit potential, and ease of entry into market. Based on the findings, below are the
ratings for Shell’s industry position:

1. The demand for energy usage is increasing tremendously. This indicates a strong
growth potential.
2. The company has invested for alternative energies. This indicates an average profit
potential.
3. High capital investment and use of the technology have created the barriers of entry.
This indicates a tough entry to the industry.

To summarize, Shell’s industry position can be rated as follows:

Growth Potential 5.0

Profit Potential 4.0
Ease of Entry into the Market 3.0
Industry Position Average 4.0
 For the stability position of Shell, it is divided into three major categories; economic
environment, fuel price, and natural phenomenon. Based on the findings, below are the ratings
for Shell’s stability position:

1. The economic environment is unstable especially in under developing countries. This

indicates a bad economic environment.
2. The fluctuation of oil price affects business environment. This indicates a high stake of
fuel price.
3. The risk of expanding the business is great due to natural disasters. This indicates a
high risk related to natural phenomenon.

To summarize, Shell’s stability position can be rated as follows:

Economic Environment -5.0

Fuel Price -4.0
Natural Phenomenon -3.0
Stability Position Average -4.0

For the competitive position of Shell, it is divided into three major categories; market
share, efficiency, and production capacity. Based on the findings, below are the ratings for
Shell’s competitive position:

1. It operates in more than 100 countries and around 4500 service station worldwide. This
indicates a very high market share.
2. It runs more than 25 refineries and chemical plants. This indicates strong efficiency.
3. Shell has a very high production capacity.

To summarize, Shell’s competitive position can be rated as follows:

Market Share -1.0

Efficiency -2.0
Production Capacity -1.0
Competitive Position Average -1.3

Below is the illustration for Shell’s positions in general:

 Internal Analysis: External Analysis:

Financial Position (FP) Stability Position (SP)

Working Capital 4 Economic Condition -5

Goodwill 7 Fuel Price -4

Net Income 2 Natural Phenomenon -3

FP Average 4.3 SP Average -4.0

Internal Analysis: External Analysis:

Competitive Position (CP) Industry Position (IP)

Market Share -1 Growth Potential 5

Efficiency -2 Profit Potential 4

Production Capacity -1 Ease of Entry into Market 3

CP Average -1.3 IP Average 4.0

The SPACE Matrix are as follows:

Conservative 7 Aggressive
6
5
x = 2.7
4
3 y = 0.3
2
1
-7 -6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6 7
-1
-2
-3
-4
-5
-6
Defensive -7 Competitive
The company should pursue aggressive strategies (backward, forward, and horizontal
integration; market penetration; market development; product development; diversification).