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Shell Retail Stations Non-Fuel Services Offered

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Submitted By Brandon077
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One BSM Fueling Brunei’s Future
Shell or Royal Dutch Shell Plc is a Dutch-British multinational oil and gas company with its headquarters at the Netherlands. It has operations in over 90 countries and has 44,000 service stations worldwide. Shell has been in Brunei Darussalam since 1929 with over 14,000 staff and contractors.
Presently, there are 4 venture companies in Brunei which includes Brunei Shell Petroleum Sendirian Berhad (BSP), Brunei Liquefied Natural Gas (BLNG), Brunei Shell Tankers (BST) and Brunei Shell Marketing (BSM).

BSM is a joint venture between His Majesty the Sultan and Yang Di-Pertuan of Brunei Darussalam and Shell Overseas Holding Limited. BSM operates at Bandar Seri Begawan, Mura Depot and Brunei International Airport Depot with over 70 employees. BSM is the downstream line of the oil and gas industry in Brunei Darussalam. This means that BSM is responsible for marketing and distributing Shell fuels and other products such as lubricants, Jet fuels and Bitumen.

Retail Stations
BSM is the sole distributor of fuels in the country with 38 retail stations across the 4 district in the country. Currently, of the 38 stations in the country two of which is Company Owned and Company Operated (COCO) and the remainder are Dealer Owned Dealer Operated (DODO). However, BSM faces competition on their other products such as lubricants and Bitumen.

Current state
Currently, only the two COCO stations are up to par with Shell Global Standards while most DODO dealers are still not taking steps to improve the current situation of the retail stations. Shell Global Standards of the retail station consists of the signage of the entire retail station, the proper layout and display at the other non-fuel profit centers.

Roxanna Filling and Service Station and Bunut Filling station are the two COCO stations which are the role models for the non-fuel profit centers at a retail station. However, both stations are only in their early stages of improving the retail stations.

The current situation for the convenient store in Brunei retail station is that COCO stations have the approved Shell Global layout and signage whiles other DODO stations do not. The best convenient store role model is the Roxanna filling and service station because they have nearly completed Shell Global standards. The only items they are missing are the Shell products such as shell branded utilities and drinks. If these are met this will be the only station being able to use the shell “select” which is the name given to convenient store that complies with the Shell Global Standards.

The next non-fuel profit centre is the service centre. The first of which in the country is open at the Bunut Filling Station recently in 2010. Its sole purpose is to allow customers to have a quick servicing and have minor repairs done. The main purpose of the Shell Helix Service Centre is to provide additional services, i.e. oil change and lubrication services, to the motorists visiting the petrol station other than just to refuel. The centre has been conceived with the motorists in mind, designed to offer a new experience by offering them a more convenient location, speed, and value for money with services carried out by experienced mechanics. In addition, this will ease the customers, especially young drivers, to search for car workshop if they do not know any workshop location to have their car quick repair and/or maintenance.

Currently, there are a handful of service stations at retail outlets which owners of retail station rent out the space to earn additional income. However, to use the Shell Helix Service Centre name, a station has to comply with the Shell Global Standards such as having a convenient store.

The car wash is the next non-fuel profit centre in a station. Currently, there is a number of car wash services at our retail station which is run by service centre dealers or owners of station. This non-fuel profit centre is usually run together with the Shell Helix Service centre.

The fast food outlets at retail stations are another non-fuel profit centre. So far in Brunei Darussalam we do not have any full-fledged fast food outlets operating at any of the country’s petrol stations. Since 2011 Kentucky Fried Chicken (KFC) has been working closely with BSM on opening the first drive through outlet in the country. Presently, the plan for the first drive through in the country has completed its 1st phase of the project. The 1st phase was done by KFC through setting up a takeaway corner inside the station’s convenient store where they had an area for customers to dine in. As of mid 2012, KFC has stopped their operations at the station temporarily. In the future, BSM has already pinpointed several stations to open a fast food outlet drive through service in the country if the first drive through is a success.

Incentives
With the evolution of the current fuel businesses in Brunei, the local dealers have strived sturdily in the fuel monopoly industry with the intention of enhancing their businesses sales. Ultimately, it creates competition among these dealers in their respective industries.

With that, BSM has implemented two incentive schemes namely the Retail Award Program (RA Program) for the dealers and Shell Stars Contest for the employees specifically for the front line site staffs. Such implementations act as initiatives to achieve BSM’s objectives to see all retail stations in Brunei Darussalam to be successful in their businesses as well as to assist the retailers to find and train high performing staffs.

The Retail Award Programme has run annually since January 2010. It uses a set of performance measures to derive operational excellence at site level in the retail stations. The purpose of such incentive programme is to prepare the current local retail stations to be ready for future challenges. In addition, it also facilitates in improving the retailers’ professionalism and their competency in managing stations. Ultimately, it will achieve what customers need and provide excellent customer services, thus improving the overall productivity. In short terms, it is an effort to add value between BSM and its retailers through the management and services offered at stations.

To participate in the RA Program, stations have to fulfill certain criteria which have been set by BSM. For instance, the convenient store should provide top-up card services, the availability of car parking space, and the minimum size of the station will all be assessed before the station is pronounced eligible to participate in the contest. This incentive program has been designed specifically for the shell station in such way that it drives the station to give their best performance in order to win the challenge. Surprise inspections will also take place where scores/points will be given for the cleanest and stations that comply with their safety criteria shall be awarded.

Another incentive program that is designed for the staffs is the Shell Stars Contest. It has officially started in 2011. Such safety program aims to enhance the confidence of the frontlines site staffs’ in handling difficult and non-compliance customers on Health, Safety, Security and Environment (HSSE) intervention and response to emergency situations. Non- HSSE compliance include smoking, not switching off engine, and usage of mobile phones when they are at retail stations.

The Shell Star Contest is aligned with other Shell HSSE programme in other parts of the world, for instance in Malaysia, they had Flying Superstar and Singapore We Got Talent in which the response was a success. With the contest in place, it provides objectives for the staffs specifically for the front line site staffs that have close interaction with the customers.

With commencement of the Shell Star Contest, it anticipates to alter the behaviors of the staffs towards HSSE as well as to encourage internal competitions among the staffs. This is to increase their self-esteem in their daily performed tasks and build up their confidences and thus can enhance their motivation to provide better customer services. Apart from that, the contest also allows the front line site staffs to improve their communication and grooming skills. Ultimately, it allows all front line site staffs to be proud of their position as a forecourt crew.

Similar to the RA Program, several criteria are required to be fulfilled by the participants in order to participate in the contest. It requires two participants namely a mentor (can be the dealer, supervisor or manager of the station) and a forecourt crew. The mentor is obligated to undergo three main processes including Wet Stock Management Process, Emergency Response Process and PDC Process. On the other hand, the forecourt crew is only required to perform role play on stage whereby the scene will be prepared by BSM and is selected randomly on the spot to test the immediate response of the front line site staffs.

Improvements
The main reason for improvements is to prepare the retailers for future competitions in the fuel industry. BSM currently has taken initiatives to diversify the profit centers of the retail stations by looking into the non-fuel profit centers in the station. The non-fuel profit centers at the retail station consist of the convenient store, car wash services, drive-through fast food outlets and the service station. Another reason for improvements is because; currently Brunei fuels are being subsidized by the Government of His Majesty. For example, Ron97 is sold in the country for $0.53/liters the remainder of the cost is borne by the Government of His Majesty.

Conclusion
Shell is a well known brand across the world for its quality fuels and their work in the oil and gas industry. In Brunei, BSM is the sole provider of fuels in the sultanate but is subsidized by the Government of His Majesty. Nevertheless, BSM still faces stiff competition in other product sectors such as lubricants and bitumen. Hence, in order to maximize the profit for the retail stations, BSM has taken steps to diversify its profit centers as mentioned above to prepare their retailers for future competition as well as to comply with the Shell Global Standards.
Questions:
1) Discuss on ways to improve the non-fuel profit centers.
2) Discuss if the current incentive program of BSM is effective? Give suggestions if there is a need for improvements on the current incentive program.
3) What are the possible solutions to increase more customers to shop in the convenient store, other than mentioned above?
References:

Shell (2011) “People Makes The Difference Real”, [Online], Available at: swwdownstream.uk [26th September, 2012]

BSM (2011) “Company Background”, [Online], Available at: http://www.bsm.com.bn/index.php/en/about-us/companybackground/history [26th September 2012]

Brunei Times (2010) “Helix Service Centre at Bunut Shell Station”, [online], Available at: http://www.bt.com.bn/happenings/2010/07/11/helix-service-centre-bunut-shell-station [28th September 2012]

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