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Student Number | 32695016 | Surname | Zhang | Given name | Ming | Email | Zhangming_90@hotmail.com | | | Unit Code | BUS317 | Unit name | Strategic Management | Enrolment mode | | Date | 4th Oct 2015 | Assignment number | 1 | Assignment name | Short Eassy | Tutor | Frankie Yee |

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Contents Introduction 3 The Value Chain 3 Technology development 3 Human Resource management 4 Procurement 4 Core Competencies 5 Recommendations 6 References 7

Introduction
Chevron’s upstream business has big operations in the world’s most important gas and oil regions, Chevron’s downstream and chemicals business is a leader in additives, refining, fuels and lubricants. Chevron have market networks which supports retail outlets on five continents, and employing 64700 people, making it one of the world’s leading integrated energy companies. (Chevron 2015)
Chevron success is attributed to its ability to constantly applying innovative technologies for research and development. Chevron explore for transport and produce natural gas and crude oil, they refine, distribute transportation and market fuels and lubricants, manufacture and sell petrochemical products, and they develop the energy resources of the future, including researching advanced biofuels.
The Value Chain
Technology development
Chevron has been extensively investing in advance technology in areas such as information integration, production and energy development. Chevron uses the technologies to find and commercialize new oil and gas fields cost-effectively and recover more resources from existing fields. Technologies also enable Chevron to integrate data and information so that they can manage and develop their global assets efficiently. And technologies help them advance emerging energy with the goal of developing scalable and economical new resources while reducing their environmental footprint. (Chevron, 2015)
Chevron owns three technology companies which are Information technology, Technology Ventures, and Chevron Energy Technology. Chevron Energy technology manages and develops technology to help find and produce new oil and gas reserves. Information technology supports the entire business by integrating information to connect people, ideas, processes and data. And lastly Technology Ventures identifies, develops and sponsors emerging energy technologies and helps integrate them into their core business. Having all these technologies help Chevron to gain competitive advantage against their competitors. (Chevron, 2015)
Human Resource management
Chevron has different human resource developing program that they provide to their employees to prepare them in the petrochemical and related industries. (Chevron Richmond 2015) Chevron also provides development programs to help develop confidence and mindset to pursue continuous improvement. By providing these development programs, Chevron employees are able to know their fields well and operate responsibly and executing with excellence and applying the innovative technologies and capturing new opportunities for profitable growth. Furthermore providing them with chances and opportunities to lead will allow the employees to come up with better plan to aid the company. (Chevron Careers 2015)

Procurement
Chevron has a multiple manufacturing company, one of them its CPChem, which is responsible for developing and trading raw materials. CPChem which is half owned by Chevron is a global leader in manufacture of specialty chemicals, which are marketed and distributed in more than 40 locations worldwide. Chevron’s suppliers can purchase raw materials at a favorable price and availability. (Chevron, 2015)
Being vertically integrated, Chevron is able to control the procurement and supply of raw materials to its suppliers, and this allows Chevron to control the supplier’s price, output and product quality. And all this allows Chevron to have high bargaining power over suppliers since they are vertically integrated which the benefits can become competitive advantages to Chevron.

Core Competencies

One of Chevron core competencies which is identified based on the VRIN framework are the inimitability of the strategic positioning in the energy industry as a market leader, cost leader and differentiator.(Chevron, 2010) In the petroleum industry, companies rely on attaining cost leadership for its competitive advantages. Therefore in order for Chevron to gain competitive advantages, Chevron depends on low input costs, economies of scale, and the acquisition of assets to create and enhance the competitive advantage and increase the value of the firm. Acquisition of assets needs capital, time to research and plan therefore it is difficult to be imitated by its competitors. (Denis, 2012)
Chevron’s capital expenditure level is another core competency that is difficult to in imitate by its competitors. For example, Chevron has a massive $6.4 billion natural gas project in china. (Chevron, 2015) Chevron continue to seek for compelling projects that will help them gain in assets and value so that they can definitely has a sustainable competitive advantage in the energy industry. Investment like this is difficult to imitate by its competitors.
Chevron research and development is also a competitive advantage against its competitors. Chevron research and development center research for innovative plans and ideas to execute and develop the technology which are profitable to Chevron. For example, Chevron is the largest producer of geothermal energy which supplies energy to 7 million homes. In the 1960s Chevron began geothermal operations by pioneering the development of the Geysers. And with further development and research, Chevron is able to become the largest producer of geothermal energy and gain a sustainable competitive advantage against its competitors. Research and development progress and results is also difficult to be imitated by its competitors.

Recommendations

With the threat of decline in crude-oil prices, Chevron may have a material adverse effect on its results of operations and its capital and exploratory expenditure plans. As such Chevron should continue to expand and invest in sustainable projects such as energy projects which will help Chevron to not only becoming the market leader for oil industry but other industry as well. So that Chevron will not only depend of the oil industry markets but other industry markets as well. (Wikinvest, 2008)
Another environmental factor that may affect Chevron is the Geological risk. As exploration of Oil and Gas Company continues, many of the easy-to-get oil and gas fields is already tapped out, or in the process of being tapped out. Thus, exploration has been forced to be invested much more heavily and has been moved on to areas that require much more effort and cost to extract the oil. One of the strategies that Chevron can adopt is to invest in their exploration department, this will allow the exploration team to be able to increase the chances of finding better areas with lesser risk involved. (Andrew, n.d)
In order to maintain a sustainable success, Chevron will need to continue to enhance its existing core competencies while developing other core competencies. And Chevron has to ensure that its competencies remain relevant in Chevron to be able to have a sustainable competitive advantage against its competitors.

References

Andrew, Beattie. "5 Biggest Risks Faced By Oil And Gas Companies." Whenever an Investor Approaches a New Industry. Web. 4 Oct. 2015.

Chevron, Corporation. "Company Profile." Providing Energy for Human Progress. 2015. Accessed September 16, 2015.

Chevron, Corporation. "Career Growth & Global Opportunities." We Invest in People. 2015. Accessed September 19, 2015.

Chevron, Corporation. "Technology." Technology Plays an Important Role. 2015. Accessed September 17, 2015.

Chevron, Corporation. "Chemicals." We Are One of the World's Leading Manufacturers of Petrochemicals. 2015. Accessed September 17, 2015.

Chevron, Corporation. "Chevron Well-Positioned for Future Growth." Chevron Corporation (NYSE:CVX) Enters the Decade with an Upstream. March 9, 2010. Accessed September 17, 2015.

Chevron, Corporation. "China." Business Portfolio. May 1, 2015. Accessed September 19, 2015.

Denis, Hurley. "The Best Of Both Worlds." Stability And Growth For Chevron Investors. March 21, 2012. Accessed September 17, 2015.

Fidan, A. (2012, September 2). Top 10 Challenges in Oil and Gas Industry. Retrieved September 17, 2015.

Wikinvest. "Risk Factors." Chevron Is a Major Fully Integrated Petroleum Company. 27 Mar. 2008. Web. 17 Sept. 2015.