PSO PROFILEMuhammad Saad FA08-MM-0081 Managerial Policy Submitted To Sir Zaffar Mannan 1 TABLE OF CONTENT S.NO 1 2 3 4 5 6 7 8 9 10 11 12 13 14 PARTICULARS Company Profile & Background Corporate Social Responsibility PSO Products Oil Market Share Pie Chart Vision & Mission Statements IFE & EFE Matrix IE Matrix SWOT Matrix Competitive Profile Matrix Space Matrix BCG Matrix Grand Strategy Matrix QSPM Suggestions & Recommendations PG NO 3 4 5 6 7 8 9-10 11-13 14 15-16 17 18 19 20 2 . flexibility and security to the customers while enabling them to earn redeemable loyalty points and avail attractive discounts for purchase of non-petroleum products at a large number of merchant outlets in various cities on use of Loyalty and Corporate Cards. Fleet Card and Prepaid Card. Corporate Card. HSD. It is engaged in import. has been a popular topic of case studies in Pakistan and abroad based on its radical corporate turnaround over the last few years. For efficient handling of customer complaints. PSO has launched Loyalty Card. About 21 Mobile Quality Testing Units ensure top of the line quality of products and services. storage.COMPANY PROFILE: Pakistan State Oil (PSO) is the oil market leader in Pakistan enjoying over 79% share of Black Oil market and 58% share of White Oil market. CNG and Petro-chemicals. compliance with quality standards is ensured in construction of new facilities like recently developed stateof-the-art facilities for Aviation customers at Lahore Airport. PSO has introduced total quality management system in its operational activities. business centers. In addition to quality assurance in upkeep and maintenance of existing facilities. industrial. PSO's state-of-the-art New Vision retail outlets are equipped with the most modern facilities. These cards provide added convenience. This blue chip company. internet facilities and Easy Payment Centers for payment of utility and Citibank credit card bills. As innovative customer service initiatives. aviation. TOTAL QUALITY CONTROL: PSO has been meeting the country's fuel needs by merging sound business sense with national obligation. including auto car wash. convenience stores. including Mogas. SAFETY AND ENVIRONMENT: 3 . The concept of Quick Oil Lube Vans introduced by PSO provides the lube change facilities at customers' doorsteps. EXCELLENCE IN CUSTOMER SERVICE: PSO serves a wide range of customers throughout Pakistan. Fuel Oil. HEALTH. marine and government/defense sectors. including retail. Professionals at PSO strive for providing unmatched and diverse services to the customers in line with best international practices. Jet Fuel. the winner of "Karachi Stock Exchange Top Companies Award" and a member of World Economic Forum. distribution and marketing of various POL products. Furbished with A toll free telephone number (0800-03000) and automated customer feedback registration system. Consistent conformance to prescribed standards and specifications across the whole range of activities from receipt. In order to satisfy the customers' needs while ensuring the highest quality of products and services. these centers provide an efficient system of 24-hour customer care. Kerosene. storage. electronic dispensing units. PSO has developed Customer Service Centers at all its 14 divisional offices. queries and suggestions. transportation and delivery of products is the cornerstone of PSO's quality management system. LPG. An attractive and comprehensive. legal.Ensuring the health and safety of PSO employees. which has divided the Company's major operations into independent activities supported by the financial. This program covers the revamping of the organizational architecture. it is the Company's policy to perform work in the safest practicable manner. consistent with best industrial practices while adhering completely to the requirements of health and safety codes and practices. and as a priority it ranks equally with market share and profit. One of the top priority areas of PSO's corporate reform is Human Resource Development. Adequate resources are made available to ensure the success of HSE policy. PSO's corporate structure has evolved into a matrix. contractors. Retail Outlets and Airports. Terminals. particularly to the under-privileged and deprived sections of the populace irrespective of ethnicity. and efficiency and transparency in decision-making through cross functional teams. by world's leading consulting and financial advisory firms and by leading educational institutions. CORPORATE SOCIAL RESPONSIBILITY: PSO is highly committed to fulfillment of its corporate social responsibility and believes that the benefits of the Company's progress and financial gains must flow down to public at large up to the grassroots levels. caste and creed. This Structural change has been reinforced and putting in place several corporate monitoring and control systems have established related checks and balances. Such initiatives include instituting gold medals. REFORM OF CORPORATE GOVERNANCE: PSO's comprehensive and far-reaching corporate renewal program resulting in dramatic corporate transformation has been widely appreciated at various national and international forums. The Company's Health. supporting Citizen Police Liaison Committee and sponsoring road awareness programs like Karavan Karachi for the children. PSO has undertaken a wide range of initiatives to support several social. These activities operate in an autonomous and collegial manner in the form of Strategic Business Units based on the clear and transparent allocation of responsibility and accountability. cash awards and scholarships for top students of leading professional educational institutes. information and other services. installing direction signs and traffic signals at major streets and thoroughfares. rationalization of staff. employee empowerment and development. Use of relevant safety equipment at work is mandatory for employees. providing computer training to students and other residents of Badin district in rural Sindh province through a well facilitated training institute established for this purpose. Plants. Safety & Environment (HSE) Steering Committee monitors HSE compliance on regular basis while HSE Site Committees ensure that HSE Requirements are met at all operating locations. Regular HSE audit of facilities and HSE training of relevant staff is carried out and commissioning of new facilities is subject to HSE clearance. Accordingly. health and educational programs. including Depots. customers and members of public likely to be affected by the Company's operations is one of the basic corporate objectives. The Company has undertaken several initiatives to ensure induction and 4 . providing moral and financial support in form of donation on compassionate basis to charitable institutions. various in-house courses. Through computer training. the Company is providing its employees the opportunities for continuous development and learning. Effective implementation of corporate reform and business development strategies in line with best international practices has enabled PSO to maintain its market leadership position in a highly competitive business environment. o PSO extends lube testing facilities and advisory services for costumers to drive maximum benefit from its products. PSO LUBES o PSO is the largest lubricants marketing company in Pakistan o PSO has the complete range of automotive lubricants. o PSO is totally committed to quality and excellence and its lubricants department is ISO 9001:2000 certified. 5 . sponsorship of staff for studies at professional institutions and seminars.training of professionals with the objective of ensuring high level of professionalism and productivity at all levels of its employees. For testing and processing facilities of all automotive lubricants. OMC MARKET SHARE: SHEL 6 . ” “Lowest cost operations and assured access to long-term and cost effective supply sources. high quality.” Mission statement: “Professionally trained. working as a team in an environment. innovation and creativity. Highly ethical.Vision statement: “To excel in delivering value to customers as an innovative and dynamic energy company that gets to the future first. safe environment friendly and socially responsible business practices” 7 . which recognizes and rewards performance. and provides for personal growth and development. motivate workforce.” “Sustained growth in earnings in real terms. 30 0.07 0.12 2.52 3. Score 0.22 0.06 1.14 0.11 0.14 0.13 0.30 0.31 8 .39 0.6 0.13 1.10 0.39 0.12 0.12 0.33 0.24 0.14 0.10 0.18 0.07 0.36 0.36 Threats • Research in the alternative energy • Strength of competition • More environment conscious consumers • Changing demographics • Current economic crisis Total: 0.14 0.0 Rate 4 2 3 3 3 2 2 3 2 2 Wt.08 0.06 0.10 0.15 0.12 Rate 4 3 3 Wt.56 0.00 3 4 2 3 4 0.15 0.56 0.16 0.8 EFE (External Audit): Key internal Factors Opportunities • CNG and LPG expansion • Only serving 18% of the lubricant market • Growing number of cars Wt 0. Score 0.IFE. EFE & IE metrics: IFE (Internal Audit): Key internal Factors Strengths • Brand Equity country-wide • 42% of petrol business • Consumer Loyalty • Successful items • Product quality Weaknesses • Declining market share • Weak product development • Disgruntled franchisees • Lubricant market • Slowed revenue and income growth Total Wt 0. 31 from the IFE EFE matrices which mean that the company lies in the high external and medium internal factor.99 Low 1.0 to 4.31 which means that the rivals of the company are far behind the company.0 to 2.8 which means that there is room for much improvement in the sector that the company specifically the lubricant sector. This is true as the company has more then 50% of the total fuel market.0 to 2.99 High 3.0 to 1. Other things can also be improved for example employee morale.0 Average 2.0 to 4.IE (Internal & External Matrix): Strong 3. From this the 9 THE EFE TOTAL WEIGHTED SCORES .99 Low 1. EFE The company has an EFE score of the 3. But the company also has to increase the market share in the engine oil lubricants sector as well.8 & 3. IE The company has a combined score of 2.0 Medium 2.0To 1. their skills and company promotion.99 THE IFE TOTAL WEIGHTED SCORES Interpretation: IFE The company has an IFE score of the 2. Human Resource with no or little technical knowledge. 2. OPPORTUNITIES: 1. Toll blending opportunities. 3. 3. Professional management. SWOT Matrix: STRENGTHS: 1. Government supports towards foreign investment in industry. 7. 4. 9. Increased Environment Conscious Society. 10 . Consumers are more inclined toward one-stop service. Dedicated Staff. 2. 4. Untapped Niche Markets. Upcoming OEMs into Pak auto market. 6. 3. 8. 8. 10. 5. Focus of company on fuels (Make 90% GM). Growing awareness about alternate fuels THREATS: 1. 9. 11. Global procurement of raw material by our competitors. 2. Fuel/BO/Additive prices increasing. State-owned entity. 3. Largest retail network. 4.company is suggested to focus on the internal factors and its competitive advantage and try to put barriers for any upcoming competitors. Lower Interest rate for Car Financing Schemes given by banks. 6. 6. 4. Construction and infrastructure development. Country-wide storage network. Low spending on A&P. Growing Number of private service station. Weak positioning. Pioneer in cards. No entry-barriers for local producers/importers. Global base oil crisis. 10. 5. State of the art ERP system (SAP). Weak distributors’ network. 2. 7. Quantity and Quality assurance WEAKNESSES: 1. 5. Tracking system for logistics. State of the art LMT. Lack of CRM. Consumers becoming more Brand-Conscious and loyal. O2) Turn the company focus from only fuel sector and gather the lubricant market as well. Low pricing of local blenders. 7. O11) Improve the distribution network to counter the low prices of the local blenders. (S9. 6. O8) WO STRATEGIES: Use the loyal customers to market and advertise the company.5.(W3. T6) Transfer the focus from only the fuel oil market and cover other lubricants in order to make them more competitive with other brands. (W5. Spurious products available at cheaper rates.(W1. (S1. Smuggling of branded lubricants. Attock & Admore. O5) Use the growing number of the stations to increase customer relationship. Global shortage of oil. OOTC. (S6. (W1. HASCOL. W9. OOTC. Various other OMC’s entering the market such as Bakri. 9.(W2. (S9. T10) Use the large customer base and quality of products to put barriers for other OMC’s entering the market such as Bakri. Acquisition of only monopolized base oil refinery by an OMC.(W2. T8) Use the countrywide storage network to buy oil at bulk prices in order to escape the oil crisis. Reduce awareness of product quality and specs amongst consumers. 03) ST STRATEGIES: Use the law enforcing contacts to put an end to the smuggling of oil and other lubricants. HASCOL. Attock & Admore SO STRATEGIES: Use the tracking system feature to capture the logistics market. 11. O2) Use the dedicated staff to gain edge in the construction and other infrastructure. O11) Use the various cards to increase the customer loyalty. (S6. 10. (S7. 8. T9) 11 . T11) WT STRATEGIES: Prepare the employees in order to retain customers or else other competitors will take over the market. 40 0.10 0.15 0.15 1.20 0.45 0.80 0.30 2.45 0.15 3 3 3 3 4 3 12 0.CPM Critical Success Factor Product Quality Price Competition Financial position Customer Loyalty Market Share Global Expansion Weight PSO Rating Score Shell Rating Score Total 0.50 0.25 0.30 0.75 0.00 2 3 2 2 2 2 0.45 3.20 .15 0.30 0.45 0.20 0. capacity utilization = 3 =5 Competitive advantage (CA) Customer loyalty = 1 13 . So it should improve the performance in the various other elements especially expansion.Interpretation: The company even though is performing better then its major rival Shell in terms of the fuel market but is lags behind due to the other things. SPACE Matrix: Financial Strength (FS) Price earning ratio = 1 Return on investment = 1 Cash flow = 1 =3 Environmental Stability (ES) Rate of inflation = 3 Competitive pressure = 1 =4 Industry Strength (IS) Financial stability = 2 Productivity. Product quality = 1 =2 Financial Strength (FS) Environmental Stability (ES) Industry Strength (IS) Competitive advantage (CA) X-axis = CA + IS = 2 +5 Y-axis = FS + ES = 3 + 4 =3 =4 =5 =2 =7 =7 X-axis = CA + IS = 2 +5 Y-axis = FS + ES = 3 + 4 =7 =7 Aggressive 14 . Conservative Defensive Competitive BCG Matrix: 15 . Horizontal Integration.II Star I Question Mark III Cash Cows BCG STRATEGIES: Backward Integration. IV Dogs II Grand Matrix: I III IV 16 . Product Development. Market Penetration. Forward Integration. Market Development. -As PSO is lying in Quadrant I therefore the following strategies should be adopted: Market Development Market Penetration Product Development Forward Integration Backward Integration Horizontal Integration Related Diversification QSPM: Key internal factors Wt AS TAS AS TAS 17 . 40 0.10 0.15 1.60 0. Disgruntled franchisees.20 0.60 0. More environment conscious consumers Key internal factors 0.60 0. Key external factors Opportunities 1.15 2.20 2.60 RECOMMENDATION & SUGGESTIONS: The recommendation and suggestions received can be categorized into 3 basic categories i. 42% of petrol business 3. Research in the alternative energy 2.30 0.15 0. Consumer Loyalty WEAKNESSES 1. Weak product development.15 0.20 0. Brand Equity country-wide 2.00 4 2 2 3 2 2 0.60 3 1 2 2 2 3 0.40 0.20 0.60 0.80 0.20 0.0 0.00 4 2 3 2 2 1 0.e.40 5.STRENGTHS 1.40 0.30 0.35 4. 2. 3.30 0.40 0.20 0. Only serving 18% of the lubricant market 3.40 0. 18 .15 0. Growing number of cars Threats 1.10 1. CNG and LPG expansion 2.30 2.20 0. Declining market share.30 0.15 0.40 0.30 2.80 0.30 0.25 3 2 2 3 2 2 0.20 0.30 0. Strength of competition 3. etc should be used to help PSO achieve this objective. they should make use of this fact and use the Pakistani factor to induce a feeling of Patriotism among its customers. PSO is the only major Pakistani organization working in this sector in Pakistan. A number of respondents found themselves running short of time while on road. Other suggestions received with regards to the quality of service included keeping a check on the proper functioning of ATM machines at PSO petrol stations and extending this facility to all the PSO petrol stations spread across major cities of Pakistan. Thus strict action must be taken against any attendant found involved. 3. 2. The need to promote PSO lubricants. Installation of television sets on the petrol stations were suggested so that the customers may kill their boredom while they are waiting in line to get their motor vehicles refueled.1. it also reduces the level of trust PSO customers have in the organization. during rush hours or increasing the number of petrol pumps on the same route were some of the suggestions received in this regard. 3. PSO must keep an extremely vigilant eye on all such practices as it not only adversely affects customer satisfaction. Filling less than the required amount or overcharging the customers were some of the complaints received. billboards. Along with catering to the needs of existing customers PSO should have a long term planning. Targeting the future customers. Analysis of the recommendation and suggestions: 1. Increasing the size of petrol stations to cater to a greater number of customers simultaneously. They expect quick and efficient service while getting their motor vehicles refueled. 2. focusing on the future customer base. Long waiting lines at petrol stations not only creates problems for them. it also discourages them from using certain petrol stations. Improvement of the quality of service offered at PSO petrol pumps. Strong advertising campaigns in which appeal is made to people’s sentiments. Effective advertising campaign through media. Suggestions were also received regarding the attraction and entertainment aspect at PSO petrol stations. their values and culture should be use so that they can identify with PSO products as their own. PSO must take this customer requirement into account. PSO strongly needs to promote its line of lubricants as more than half of the sample surveyed was unaware of the PSO lubricants Deo and Carient. 19 . Cheating and unfair malpractices were highly resented by some of the respondents. newspapers.