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    BP A Shell

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    darshan_zamwar
    The Shell DPM was a technique developed by Shell to systematically analyze qualitative factors that impact corporate planning and resource allocation independently of financial forecasts. It assessed prospects and positions for business sectors and companies based on 4 criteria: 1) market growth rate, 2) market quality, 3) industry feedstock situation, and 4) environmental regulations. A company's market position was rated on a 5-star scale based on its market share and security, with categories like leader, major producer, and negligible. The Shell DPM used weighting and rating methods to evaluate business sector prospects.

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    BP A Shell

    Uploaded by

    darshan_zamwar
    42 views19 pages
    The Shell DPM was a technique developed by Shell to systematically analyze qualitative factors that impact corporate planning and resource allocation independently of financial forecasts. It assessed prospects and positions for business sectors and companies based on 4 criteria: 1) market growth rate, 2) market quality, 3) industry feedstock situation, and 4) environmental regulations. A company's market position was rated on a 5-star scale based on its market share and security, with categories like leader, major producer, and negligible. The Shell DPM used weighting and rating methods to evaluate business sector prospects.

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    The Shell DPM was a technique developed by Shell to systematically analyze qualitative factors that impact corporate planning and resource allocation independently of financial forecasts. It assessed prospects and positions for business sectors and companies based on 4 criteria: 1) market growth rate, 2) market quality, 3) industry feedstock situation, and 4) environmental regulations. A company's market position was rated on a 5-star scale based on its market share and security, with categories like leader, major producer, and negligible. The Shell DPM used weighting and rating methods to evaluate business sector prospects.

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    42 views19 pages

    BP A Shell

    Uploaded by

    darshan_zamwar
    The Shell DPM was a technique developed by Shell to systematically analyze qualitative factors that impact corporate planning and resource allocation independently of financial forecasts. It assessed prospects and positions for business sectors and companies based on 4 criteria: 1) market growth rate, 2) market quality, 3) industry feedstock situation, and 4) environmental regulations. A company's market position was rated on a 5-star scale based on its market share and security, with categories like leader, major producer, and negligible. The Shell DPM used weighting and rating methods to evaluate business sector prospects.

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    of 19

    Anshu Chaudhary (13) Anshuman Pant (14) Anuradha Mukherji (15) Aparna Sreejayan (16) Sanket Aradhye (17)

    C.Aravindhan (18)

    The Shell DPM was a technique originated for systematically analysing the qualitative factors present in the organisation, which had an impact on corporate planning. It was also developed to compare business sectors and company positions in a way that was independent of financial forecasts

    ` ` `

    Determine corporate planning and allocation of resources Financial forecasts not sufficient for above purpose The main criteria by which prospects for a business may be judged to be favourable or unfavourable (favourable meaning a high profit and growth potential) The main criteria by which a companys position in a sector may be judged to be strong or weak

    ` ` `

    Business Sectors Geographical Areas Forecasting Period

    ` `

    ` `

    Qualitative Industry profitability and company competitiveness Greater scope of options No practice of placing an SBU unit as a circle on the matrix

    ` `

    Quantitative Industry profitability and company competitiveness Scope is narrower

    Shell

    GE

    Profitability prospects (or attractiveness) for businesses in petroleum sector are judged on four criteria,
    1. 2. 3. 4. Market Growth Rate Market Quality Industry Feedstock Situation Environmental (Regulatory) aspects

    1.

    Market Growth Rate


    Rating system with midpoint as the average growth rate of the industry Growth rate is given rating from one star to five star

    2. Market Quality To get a rating for market quality, following questions need to be answered,
    Does the sector have a record of high and stable profitability? Can margins be maintained when manufacturing capacity exceeds demand? Is the product resistant to commodity pricing behaviour? Is the technology of production freely available or is it restricted to those who developed it? Do relatively few producers supply the market? Is the market free from domination by a small group of powerful customers?

    2. Market Quality Questions continued


    In the case of a new product, is the market destined to remain small enough not to attract too many producers? Is the product one where the customer has to change his formulation or even his machinery if he changes supplier? Is the product free from the risk of substitution by an alternative synthetic or natural product?
    If a business scores yes on most or all of the above questions, then it will get a four or five rating for Market Quality.

    3. Industry Feedstock Situation This aspect considers the availability and ease in getting the raw material for production. 4. Environmental (Regulatory) Aspects

    Business sector prospects can be affected by restrictions on manufacture, transportation and marketing of a product.

    A petroleum company is judged as strong, average or weak in terms of Market Position, in relation to significant competitors. Factors considered for rating Market Position
    Percentage share of the total market Degree to which this share is secure

    Market Position is rated on following 5 star rating scale,


    Leader (5 stars)
    x This type of company has market leadership and technical leadership usually accompanies this.

    Major Producer (4 stars)


    x This occurs where no single company is leader but there are two to four competitors are closely placed.

    Viable Producer (3 stars)


    x This type of company has a strong viable stake but falls below the top league.

    Minor (2 stars)
    x Businesses in this category are not able to support research and development in the long term.

    Negligible (1 star)
    x Companies with a negligible position in the market fall into this category.

    Weighting Rating

    ` ` `

    The shell questions. Weighting method. Business sector prospect does not have the element of environment. Point allocation method is superior to star rating method.

    ` ` `

    L&T Heavy Engineering L&T Infotech L&T Finance

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