No single business organisation exists in a vacuum. It must be comprised of a set of factors within or without its control. Organisations lack control over external competitive and macroenvironmental factors. As such, below is a comprehensive analysis of the competitive and macroenvironmental factors affecting the Royal Dutch Shell PLC.
Competitive environmental factors include rivals who are aggressive both in their marketing strategies and advertisements, thus, pose stiff competition for Royal Dutch Shell PLC. Moreover, the entry of new competitors like Total Oil Company also affects the market share of Royal Dutch Shell PLC. The loyalty of customers also affects the sales of the company since they work as its advocates. The suppliers of the company also have an impact on the company’s performance. Normally, the timely delivery of oil products reduces the breakdown of operations, less complains, and customer satisfaction. Availability of substitute commodities like biogas also poses a threat to Royal Dutch Shell PLC as it lowers its sales.
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The macroenvironmental factors include the laws and regulations affecting the operations of Royal Dutch Shell PLC. They include the taxes imposed on fuel, which raises the prices of the commodity. Moreover, the state of the economy also affects the company’s operations. When the economy is at a boom, the sales increase since there is higher purchasing power from customers. However, when the economy is in recession, the purchasing power of customers reduces leading to low sales volume. Demographics also play a significant part in the operations of Royal Dutch Shell PLC. Demographics consist the population characteristics including age, occupation and income levels. Usually, a population with high-income earners has a higher purchasing power increasing the sales volume of Royal Dutch Shell PLC. The level of technology also affects the operations of Royal Dutch Shell PLC. For instance, computerised receipts ensure accountability and fewer cases of the pilferage.
In conclusion, Royal Dutch Shell PLC is affected by competitive and macro environmental factors. The competitive environmental factors include rivals, new competitors, customers, substitute services, and suppliers while macroenvironmental factors entail laws and regulations, the economy, technology, and demographics. These factors have both negative and positive effects on Royal Dutch Shell PLC. However, proper response and strategies to these factors give Royal Dutch Shell PLC an upper hand in the market despite the negative impacts.
Reference
D&B Hoovers. (2019). Royal Dutch Shell PLC. Retrieved from http://www.hoovers.com/company-information/cs/company-profile.royal_dutch_shell_plc.46df1d67c783aa53.html
