Oil and Gas Industry Overview
Being one of the biggest sectors in the world in terms of dollar value, the global oil and gas industry is regarded as the powerhouse that employs thousands of workers globally, while generating billions of dollars annually. Today, oil and gas companies form a vital part of the global economy and contribute significantly towards the national GDP.
However, there has been an increase in regulatory pressure for oil and gas companies, due to major environmental disasters that have taken place in the past. The recent increase in the adoption of renewable energy sources and the growing trend towards alternative energy sources are the major contributors that have cast a negative spotlight upon the oil and gas companies. Such factors coupled with the rise in governmental and pro-eco legislation pressure have made it challenging for leading oil and gas companies to stabilize their presence in the global market.
Importance of PESTLE Analysis
Every organization operates in a complex, dynamic environment that is affected by multiple, ever-shifting forces, trends, and challenges. Thus, developing a PESTLE analysis framework for monitoring and responding to the external environment is an effective strategy to overcome market challenges. A PESTLE analysis is centered around the political, economic, social and technological, environmental, and legal factors of a business. The goal of a PESTLE analysis is to develop a profound understanding of the external environment where the organization operates. Businesses that strongly monitor and respond to changes in the macro-environment are able to differentiate themselves from the competition and build a competitive advantage.
About the Client
The client is a leading oil and gas industry supplier in the international market. The company has an in-house team of highly experienced geophysicists supported by data processing experts. Based out of the US, the client has over 30 years of experience in the oil and gas industry.
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As the global business environment kept changing, the client – a leading oil and gas industry company realized the need for an effective mechanism to determine the risks and opportunities associated with the market. Moreover, the rising environmental regulations were making it too expensive for the oil and gas companies to conduct business in specific areas or along certain lines of production. Thus, the client wanted to determine how the current/pending regulations would impact their business models and how sensitive their business is to changes in tax policies. By leveraging SpendEdge’s PESTLE analysis template, the oil and gas industry client wanted to assess how developing technologies would affect their potential consumer base and wanted to anticipate future difficulties to avoid or minimize the effects.
With the help of solutions recommended by a team of specialists at SpendEdge, the client was able to make use of profitable opportunities and anticipate all the future difficulties. The PESTLE analysis model supported strategic management by identifying the external factors that presented data on opportunities or threats, based on the remote or macro-environment of the business, pertaining to the political, economic, sociocultural, technological, legal, and ecological factors. Analyzing the problems that might arise, now or in the future, helped the company circumvent various issues. This subsequently helped the client to spot better business opportunities.
Analyzing the effective external factors also helped the company to plan a way to scale its growth, ensure cost-effective production levels, and understand when major shifts in technology are likely to occur. Moreover, the in-depth insights obtained from this PESTLE analysis engagement proved to be valuable in making smart and prudent business decisions.
Changes in your business environment can create great opportunities for your organization. So, don’t delay, Get in touch with our experts today!