Throughout the following report you will read about UK based company, Global Ventures Plc and their ongoing expansion into international markets. Global Ventures has no prior involvement in the target petrochemical industry and therefore it is essential that the environmental audit covers as much detail to ensure the expansion is a success.
The report will cover several key areas, namely the Product Market to be Investigated, Scope of Entry into the Market, The Opportunities and Threats Facing Companies and Possible Barriers to Entry. These areas should provided good coverage of the key areas which will affect the viability of development in the countries specified.
Table of Contents
1. Product Market to be Investigated
2. Recommendations of International Scope of Entry into the Market
2.1 South America – Chile
2.2 Asia (Far East) – Malaysia
3. The Opportunities and Threats Facing Companies in the Petrochemical Industry
3.1 Political
3.2 Economic
3.3 Social
3.4 Technological
3.5 Legal
4. Threats for Global Ventures
4.1 Political
4.2 Economic
4.3 Technological
4.4 Environmental
4.5 Competition
5. Possible Barriers to Entry of Companies in the Petroleum Market
5.1 Brand Recognition
5.2 Security of Oil and Gas Supplies
5.3 Politics of Climate Change
5.4 Cost and Investment
Research Objectives and Key Topics
This report evaluates the strategic viability of Global Ventures Plc entering the international aviation fuel market. It identifies target markets in Chile and Malaysia, assesses the political, economic, and social landscape of these regions, and examines the competitive pressures and entry barriers inherent in the petrochemical industry.
- Market expansion into the aviation fuel industry in developing nations.
- Comprehensive environmental and economic audit of Chile and Malaysia.
- Analysis of competitive dynamics using Porter’s Five Forces.
- Evaluation of operational risks and barriers to entry, including infrastructure and policy shifts.
Excerpt from the Book
POSSIBLE BARRIERS TO ENTRY OF COMPANIES IN THE PETROLEUM MARKET
With all new businesses the most fundamental obstacle to be overcome is being recognised by the target market. Existing companies are there because they have this recognition. It is often down to promotions and advertising to secure these initial sales however with the low switching costs for buyers it is not uncommon for fuel companies to continue advertising.
There are two key factors here; firstly the threat of terrorist activity which has been seen across the world. The September 11th attacks saw the share prices of airlines everywhere plummet. British Airways fell out of the FTSE 100 (BBC Radio 4, September 2002) as a direct result, despite not being involved. This also led to fewer flights resulting in lower demand for oil impacting suppliers. There is also the constant threat of dwindling oil reserves. It is widely accepted that these will run out in the near future, established petroleum companies are investing heavily in the research and development of alternative fuel sources.
Global Ventures will, essentially, be encouraging inhabitants to pollute further. This means they are likely to receive opposition from environmental groups who want a substitute to fossil fuels. Unfortunately neither of the countries looked at are in a position to fund research into alternate sources and are dependant on other regions to develop the technology.
The Governments of both countries are currently stable but there have been examples in recent history of turbulence. There were imposed restrictions on access of goods and services, and there is always the threat of this returning due to the nature of neighbouring countries. The markets are easy to enter because Global Ventures will be utilising common technology and existing resources consequently there are active distribution channels in place. Should Global Ventures wish to leave the market they will difficult to exit the market due to specialist equipment and assets, also the interrelated nature of the business; connecting the refinement to the end user means Global Ventures are dependant on both the supply and demand of oil. Both of these facts lead to high exit costs and therefore Global Ventures will not be able to depart the market quickly.
Summary of Chapters
1. Product Market to be Investigated: This section details Global Ventures' plan to expand into the supply of aviation fuels, specifically focusing on distribution and storage in emerging economies to reduce initial investment costs.
2. Recommendations of International Scope of Entry into the Market: This chapter provides an economic and environmental analysis of potential markets in Chile and Malaysia, highlighting the importance of foreign imports to their growing economies.
3. The Opportunities and Threats Facing Companies in the Petrochemical Industry: This section explores PESTLE-related factors, examining how political, economic, social, technological, and legal conditions influence business prospects in the target regions.
4. Threats for Global Ventures: This chapter outlines specific risks, including geopolitical tensions, oil price volatility, environmental seismic risks in the 'Ring of Fire', and competitive market pressures.
5. Possible Barriers to Entry of Companies in the Petroleum Market: This section analyzes obstacles such as the necessity of brand recognition, the impact of global instability on supply security, environmental regulations, and high exit costs due to specialized infrastructure.
Keywords
Global Ventures Plc, Petrochemical Industry, Aviation Fuel, Market Expansion, Chile, Malaysia, Porter’s Five Forces, Oil Consumption, Economic Growth, Barriers to Entry, Fossil Fuels, Supply Chains, Infrastructure, Competitive Rivalry, Energy Policy.
Frequently Asked Questions
What is the core focus of this report?
The report examines the feasibility of Global Ventures Plc entering the aviation fuel market in international regions, specifically Chile and Malaysia.
What are the primary themes addressed?
The text focuses on market expansion strategy, the assessment of economic and political environments, competitive analysis, and identification of operational barriers.
What is the overarching goal of the study?
The primary goal is to determine the viability of development in specific countries by analyzing the demand for aviation fuel and the associated business risks.
Which scientific or analytical models are used?
The report utilizes PESTLE analysis for the external environment and Porter’s Five Forces model to assess competitive dynamics within the petrochemical industry.
What topics are discussed in the main body?
The main body covers market demand in Chile and Malaysia, opportunities and threats within the industry, and detailed barriers to entry including technical, financial, and environmental challenges.
Which keywords best describe this research?
Key terms include Aviation Fuel, Market Expansion, Petrochemical Industry, Competitive Rivalry, and Economic Growth.
How do territorial disputes affect the Chilean market?
Territorial disputes with Peru and Bolivia threaten trade routes and could potentially harm the country's economic stability and growth if conflicts were to escalate.
Why is the Pacific 'Ring of Fire' a specific concern for Global Ventures?
The region is prone to volcanic and seismic activity, meaning infrastructure like pipelines and storage facilities must be built to withstand earthquakes, which increases operational expenditure.
What role does brand recognition play for new entrants?
Brand recognition is identified as a fundamental obstacle because existing competitors are already established, forcing new entrants to invest heavily in advertising to capture initial market share.
Why are exit costs considered high for this industry?
Exit costs are high because the business relies on specialized equipment and assets, as well as an interconnected supply chain that links refinement directly to the end user.
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- Paul Dickenson (Autor), 2009, Global Business Context Environmental Report - Petrochemical Industry, Múnich, GRIN Verlag, https://www.grin.com/document/142346
