Analysis OnStrategic Management & CEO Leadership Of FNQSS
Question
Task: Identify three (3) strategic managementissues that have the potential to significantly impact their organisation over the next five (5) to ten (10) years.
The identified issues must draw on industry reports from the IBIS world database available on the AIM Business School library as well as other relevant sources. Students are required to analyse these issues from the perspective of their organisation’s CEO and prepare a Board Report.
What are the key risks, opportunities and threats that have or may emerge from the identified issues Students are then required to write a reflective briefing paper for the board on why they are the best person to lead their organisation as the CEO for the next five (5) years. Professional Development Plan (PDP) (or equivalent) provides the foundation for reflecting on what they’ve learned as future executive leaders as well as what additional development opportunities they need to address. Any additional insights gained during the unit from reading materials and self assessments should also be referenced in the Assessment Task. Assessment Submission Requirements:
Your assessment is to be written as a two part Board Report
Part 1 – Strategic Issue Analysis – Part 1 must not exceed 2,500 words. Include a minimum of 20 suitable academic journal articles. 3 strategic issues as listed in the briefing paper template.
Part 2 – CEO Leadership Paper – 1000 words a. Include a minimum of 6 suitable academic journal articles in Part 2 of your assignment. Part 2 must not exceed 1,000 words.
Answer
Introduction
As per the viewpoint of Treadgold, (2021), the Petroleum industry is known as the oil patching industry where global processing of extraction, exploration, refining, marketing, and transportation are included. Fuel oil and gasoline are the largest volume products taking place within this industry. Petroleum industry and the corresponding issues in Far North Queensland, which is the northern portion of Australian Queensland are the major highlighted areas in this paper. The petroleum industry is one of the very fastest-growing industries in the country state which is enlisted as a new industry group and also becoming competitive. The various strategic issues that exist in the market trend have been discussed here to identify the recommendations. In the second portion of the paper, the CEO leadership exists in the industry and the market has been portrayed. Far North Queensland (FNQSS) is considered to be Positioned in the petroleum industry over the thirty years which has a considerably strong consumer database as compared to any other industries and for this purpose, the management of different service stations with the wholesale division is necessary for FNQSS. This paper is based on the analysis of FNQSS and their retail division where the strategic analysis has been made to understand the future position of the petroleum industry in the marketplace.
Analysis of strategic issues
Strategic issue 1-Electric Vehicle
Narrative
As per the analysis made by (IBISWorld, I., 2021), the sale of electric vehicles is expected to increase over 49% in Australia by the year 2030, and by the End of the year 2040, the sale of new electric vehicles tends to increase over 100%. People in this century becomes more towards the purchasing of electric vehicles rather than using the vehicles which run through Petroleum. Due to these reasons, the petroleum industry finds it difficult to survive due to the continuously decreasing demand for petroleum, gasoline, or other fuel. With this low demand for Petroleum and relevant products, it has been observed that a major disruption has taken place in the supply of oil which can cause a recession in upcoming years. Electric vehicles are considered as the faster-growing segment in the market which is expected to reach ultimate desired growth in the forecasting period(Research Markets, 2021). As per the analysis made by (Qld.gov.au. 2021), there are almost 3447 electric vehicles among the total 5266 electric vehicles that have been registered in Queensland which make up to 0.13% of the total amount of vehicles. The reason for the increasing demand for electric vehicles is the rate is cheaper as compared to Petroleum vehicles and this cheaper rate makes this car more accessible for the general level of the public in the country. As per the report (Katz, 2021), global battery cost is decreasing in upcoming years where the manufacturing cost has also been reduced due to the improvement of technology. The cost is reduced with the economies of scale and for this reason, the ultimate upfront cost is reduced to a point where they are cost-competitive to Petroleum vehicles. The high Positioning future of electric vehicles demonstrates that the Petroleum running vehicles are considered to be low on the road(afdc.energy.gov, 2021).
The Government of Queensland recognized the enormous potentiality of this innovation and technology where the process of manufacturing electrical vehicles is getting easier and that helps to increase the transition of electric vehicles in the market. The expected cooperation from the government of Queensland shifts towards electric vehicles and that becomes an issue for the Petroleum industry which weakens their chance of future sustainability(Qld.gov.au, 2021).The transportation systems in Queensland around the country and region are undergoing a major phase of transformation where electric vehicles capture most of the market of petroleum running vehicles. The consideration of the threat of these kinds of substitutes with better facilities and cheaper prices sourcing from the implications of innovation and technology which impact the fuel-efficient vehicles(Clarke, 2021). As the consumers in this generation become more conscious about the environment and greenery and due to these reasons, they find it better to reduce the use of fuel-efficient vehicles and purchase electric vehicles. As these kinds of innovative substitutes are positioned in a high range market trend where there is no need to refuel the vehicles within less period of time, the demand for fuel stations and fuel-efficient cars continues to reduce in upcoming years (Australian Competition and Consumer Commission. 2021).
Recommend solutions to overcome this issue
In the above discussion of the considerable market issue faced by the petroleum industry in the market due to the increasing demand for electric vehicles, there are some recommendations that need to be made to revamp the market position of the fuel industry. as per the analysis made by (IBISWorld, 2021), fuel supply chain management needs to take into consideration the gap between the current share of fuel purchase and the Targeted market share of fuel. Due to the increasing price of fuel, the overall industry comes under pressure where the government finds it necessary to improve the market position of the fuel industry by ensuring reasonable tax, exercise, and duty over the fuel cost(Clarke, 2021). As per the analysis of reducing the price of fuel it has been observed that the fuel price in this last month has made the highest record of 178.8 Cpl which is considerably expensive as compared to using electric vehicles for the purpose(couriermail.com.au, 2021).
The major recommendation can be made that to save the Industry it is necessary to save fuel for the very first instance. People need to be more conscious about their driving where they need to maintain speed, use gearbox in a sensible way where engine idling for long periods also needs to be avoided. The fuel save department also recommended keeping the ignition system and fuel of the vehicle in good working order where the regular change of engine oil with the usage of the correct grade of oil is also recommended by the fuel manufacturers which one the one hand save fuel and other hand save the demand for the industry.
Strategic issue 2-Threat of New to Industry (NTI)
Narrative
The threat of new to the industry (NTI) is considered as another strategic issue faced by the industry.it has been identified that the cost to set up a service station is considerably higher. The cost is increasing in the Far North Queensland of Australia where the brands like British petroleum (BP), Mobil, Shell, and some others exist in the market and the New to the industry like 7- eleven threaten the existing brands with their improved service level and extraordinary branding arrangements. Due to the lack of customer knowledge about the fuel industry the brand awareness is lower for which there is a chance for the new to industry companies to capture the entire market in the upcoming years (witaaet al., 2018).From the viewpoint of Compliance and enforcement(2021), Petroleum stations are more customer-centric which creates some barriers in the industry. As 7-eleven and other companies under the New to industry (NTI) arrive in the concerned region the price of fuel becomes volatile as compared to earlier and this establishes the market competitiveness. The revenue of the existing fuel-efficient companies is negatively impacted due to the low level of profitability and share of total profits with new to industry (NTIS) companies.
he threat for new entrants in the market is also considerably higher due to the power of the supplier where the FNQSS purchases refined fuel directly from the new competitors(Oecd.org, 2021). The ability of the supplier and their bargaining power is considerably higher which also impacts the price of the fuel in the market. 7-eleven is among one of the most highlighted firms in Queensland which has projected to open almost fifteen stores throughout the market and the threat has been increased due to their business affirmation and different style (WANG, 2018). The existing Petroleum market is a threat due to this company and their corresponding supplier and purchaser that entangled the competition of the market. It has been obtained that to improve the market position of the petroleum industry and beat the competitors the required turnover of the petroleum industry is lower and for this reason, the concentration of the petroleum industry is also low. Rivalry among the existing market firms and the new to the industry (NTI) is considered to be high as the new firms like 7-eleven and Pearl give heavy discounts on petroleum products that lower the total purchasing price for the consumers. This increasing rivalry and heavy discount tends to push the new firm more into the market region and capture the market share. The Existing brands like Mobil, BP, and Shell are unable to maintain their brand image due to the uncertain circumstances, and their inability to offer discounts and other facilities to the consumers make their consumers more into the new firm(Schweitzer, 2021).
Recommend solutions to overcome this issue
There are some recommendations that can be made for the existing Petroleum firms in Queensland with which they can withstand the new to Industry (NTI) firms with efficient manufacturing and service strategic implementation. According to the viewpoint of (GallegosandMiralles, 2021), competition in the petroleum industry includes the business and the corresponding brand promotion with the expected level of products and services. Defining the competition is one of the major recommendations that can be made by the firms to overcome the situation of rivalry. despite taking competition in a negative way the firm needs to improvise its state of competitive advantage by qualifying market demands and impressive service(IBISWorld, 2021). Major business strategies and utilization of plans can help the firm and the industry to maximize the market share. The development of a competitive matrix plays an important role here as it helps to meet the customer’s satisfaction and also increases the quantity of sell-by cutting edge of something that has never been done before. As recommended by Parviainenet al., (2017, p. 65), identification of industrial needs and taking steps to meet the needs with efficient quality of products and services are necessary for driving the market higher. It's great to invent something in an existing industry and business activities but reinvention is more required for the sustainability of the existing firm. As per the report (Gorton and Troup, 2018), improvement of existing products and innovation of services is required for the instance of company growth and this enables the firms like BP and Shell to sustain in the market by covering equal market share as new firms into the similar industry. Highlighting the differences with the new to the industry and taking the initiative to utilize innovation and technology help to manage the prices and also strengthen the market position.
Strategic issue 3-Ever-increasing costs of government Compliance with
Petroleum
Narrative
Another strategic issue faced by the industry is the increasing cost of government compliance with the petroleum industry. The use of petroleum products causes a high risk to the environment and also increases the risk of pollutants and fire. As per the environmental protection agency (EPA), the traditional method of petroleum manufacturing and usage continues to increase the risk to the environment and it becomes difficult for the environmental protection agency to regulate the pollution. Each and every state of the country has a specialized environmental regulatory agency and due to the high Maintenance cost by the environmental regulatory group, WorkSafe in Queensland the government charges more. As per the report of 2017, the government of Queensland in Australia mandated and imposed restrictions on the total volume of petroleum sales where the companies can sell up to 4% of petroleum products band the petroleum must be bio based like ethanol. These restrictions on petroleum products and services correspond to threaten the overall market growth and industrialization. FNQSS has made cost-effective changes in the reduction of carbon footprint and pollution in every petroleum service station for that purpose the LED lights replaced the old lighting. Considering clear green policies FNQSS also tends to face the budget issue where the government charges a high level of pricing on Petroleum compliances.
There are some legal sides of increasing the cost of government compliance with the industry and more specifically with the company FNQSS.its had been observed that the wholesale division of the firm adherers to the oil code because of the power of Australian consumers and competition commission (ACCC). The legislature imposed on anti-slavery has also meant to impact the company's total turnover more than of $100 million which shows that the company does not entertain slavery and for that reason, the government comes into action to manage the compliances(Ilo.org, 2021). Protection made by the consumers under the consumer law goes against the issues like the price of the fuel and quality and substances of the fuel which increase the government concern. The issue become a major challenge for the industrial growth after the Covid-19 pandemic where the demand for petroleum products become lower as compared to the pre-covid-19 phase and due to this reason FNQSS and the entire Industry found the requirements of government intervention and strategic implications for improving major compliances(worldbank.org, 2021).
Recommend solutions to overcome this issue
Increasing the cost and burden of government compliances is the major concern as it disrupts the growth of the industry. Australian financial institutions stated the increasing cost of government compliances owing to internal and external environmental complexities. The department of compliance in Queensland needs to arrange programs to discuss their compliance with petroleum, greenhouse gas, biofuel, and geothermal storage. a wide range of activities for ensuring the operational framework comply with the policies and laws that have an impact on the entire Industry. The restrictions and high-cost compliance can be cut down by ensuring smooth operations and obligations within the industry under Queensland law. The encouragement to the industry operators is also taken into consideration as it voluntarily expands the obligations for the very first instances. As recommended by (Environment | Department of Environment and Science, Queensland, 2021), the public and stakeholders need to boost up their confidence level with more transparency and effectiveness that improve their regulatory compliance and make it more cost-effective. As per the major recommendation, the department has considered undertaking the work and activities for revitalizing and reshaping the proactive compliance methodology that provides the more improved technologies band compliances to the major economic and environmental concerns. The compliance steering committee in Queensland is comprised to represent each of the operational areas which ensure active governance and other activities and enforcement. The last recommendation for the increasing compliance cost is the requirements of imposing subsidies to the petroleum products for which the compliance cost, manufacturing cost, and purchasing cost would be reduced.
CEO leadership
Narrative
After the covid-19 pandemic, there has been a massive humanitarian crisis has been found in the country and the region there are millions of losses has been faced by the petroleum industry with the increasing price of petroleum products. The rate of unemployment has also been a major economic concern. during this scenario to robust the economic and social position of the country and the world CEO and their corresponding leadership style are important. The CEO of an organization needs to take the seriousness of responsibilities and actions which come from distinctive continents, industries, and countries, and a variety of companies and operational frameworks are emphasized on the Role of the CEO. The CEO of the concerned organization needs to have the ability to envision, nominate, and manage any kind of crisis held in the sector due to the change in the environmental, economic, and social position of the market. The leadership style of the CEO also needs to share specialized practices that include iterative Behavior and strategic implementation. CEO of the organization needs to be steady and take essential and effective leadership skills to revamp industrial proposition and achieve success. As per the analysis made by Harvard business review, Effective leadership skills by the CEO of an organization encompasses the key behaviors which include making resolute and faster decisions, proactive as, high performance and also need to avoid unnecessary and ambiguous pieces of information at the time of making business decisions. For the concerned organization, the CEO needs to play the role of a leader where the CEO needs to carry out all the major duties and responsibilities related to business operations, decision making, and other subsidiary activities.
Key insights
In this analysis, key insights help to understand the major findings of the CEO and corresponding leadership style to build an appropriate analysis of the topic and issues. Here the key insights help to analyze the required characteristics a CEO leader should build to reduce any kind of issues in the company, FNQSS, and the targeted business promotion and growth. From a database of 1700 C-suite assessments that a CEO of an organization is considered to be successful with the demonstration of specific behavior and improving the areas of personal characteristics (Ferramosca and Allegrini, 2018.). Decisive, engagement towards the business decisions, adaptability, and proactive mess are some of the important behaviors which the CEO of the company needs to develop within the personality. Optimism is the most important trait the CEO needs to be concerned about with which the leaders are able to be more optimistic over their work and take the required action to overcome the business and market issues. Acceptance is another trait that makes the CEO of FNQSS understand their market position and strategic issues which need to be taken into account for success (IBISWorld, 2021).
Connection to the strategic issues
The required leadership qualities within the CEO personality can be understood by linking with the strategic issues faced by the petroleum industry and the FNQSS.CEO of the organization needs to manage the supply chain of the firm which helps the company to revamp the old market position which has been affected by the innovation and usage of more of electrical vehicles rather than using petroleum effective vehicles. The price of Petroleum has also been the major concern of the CEO of the firm who needs to dictate the whole team to utilize more innovation and technology into the manufacturing process and improve the selling structure with cost-effective prices. CEO of the organization adopt the transformational leadership style with which they can involve in the transformational market and consider focusing more on effective marketing and promotional strategies that help to establish their market position like any other top positioned company in the world and the country. CEOs also need to promote their business with leaflets and advertisements where the saving of fuel and saving of environmental performance has been dictated. Considering the second discussed strategic issue faced by the firm of threats from new entrants into the market, it has been observed that the CEO of the company needs to establish effective brand positioning and target market.
The leaders also need to understand the completion and its major implementation that help them to work with collaboration under the major CEO guidance and maximize their market share. As the petroleum industry is highly volatile in nature where the consumers and suppliers play an important role, the CEO needs to set the required actions where they are able to meet all the needs of the suppliers and all the demands of the consumers. Leaders are the important positions of the company and FNQSS developed their green policies with some major cost-effective changes under the guidelines of the CEO. As discussed above the third strategic issue faced by the company and the entire Petroleum industry is the increasing cost of government compliances with petroleum. The CEO needs to work on their manufacturing and selling compliance which can reduce their cost and other disadvantages. The CEO of the firm needs to adapt the delegation and authoritative leadership style to boost the confidence of staff and stakeholders for effective performance to come into major action. The transparency needs to be placed in a specific place of action.
Professional development plan
|
Skills for improvement |
Reason required for improvement |
How you are going to do this |
The time frame for the improvement |
|
· Optimism · Communication · Acceptance |
· By focusing on the goal and expectations the optimism can be improved · By participating more in interactions · Understanding the present market conditions |
· Practicing gratitude · Participating in a conversation with others and practicing active listening · Participating in real-time risk and analyzing the solutions |
|
Conclusion
At the end of the paper, it can be concluded that the strategic issues of the petroleum industry in far north Queensland in Australia. The economic social, political environmental issues have been evaluated as per the industrial analysis and the corresponding analysis of the company FNQSS. Three major strategic issues have been observed where the introduction of electric vehicles, the threat of new to industrial firms, and increasing compliance cost. The corresponding recommendations as per overcoming the stated issues have also been evaluated. In the second portion of the paper the CEO leadership the required traits and skills to overcome the discussed strategic issues have been confirmed which help to understand the economic position and future possibilities of the company to sustain in the industry.
Reference
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