Description
Q – Please read the discussion below and prepare a Reply to this discussion post with comments that further and advance the discussion topic.
Discussion
A Case Study in Competitive Advantage and External Environment Strategies
Introduction
This article focuses on the international growth strategies of Saudi Aramco, one of the global largest oil producers, as a case for Saudi Arabian companies. We will review how Saudi Aramco has attained a competitive edge and has been able to cope with its external environment. It uses analytical tools and theories from international business textbooks. This paper will examine how Saudi Aramco captures its exceptional resources and core competencies to make the best of the foreign market. Last, recommendations will be given for a possible expansion based on academic sources.
Method of International Growth
The international expansion strategy of Saudi Aramco mainly focuses on the strategic alliance, the capitalization of which will help the company to make use of foreign partners’ resources, know-how, and access to the market. Among various methods, joint ventures in refining and marketing are worth mentioning because Saudi Aramco partners with major oil companies worldwide to get access to new markets and energy distribution networks. Besides, this tactic is about Saudi Aramco’s global presence and helps the firm’s partners access the country’s oil resources (Shenkar et al., 2021). Apart from this, Saudi Aramco also forges tech partnerships, cooperating with tech companies on their research and development projects, mainly focusing on enhanced oil recovery and carbon capture. Through such collaborations, the organization can position itself well in the market as it keeps up with the latest trends and addresses environmental needs (Martin-Roberts et al., 20201). Through creating tactical frames, Saudi Aramco can successfully combine the complexities of foreign expansion with mutually beneficial outcomes. The cooperation also allows the organization to change its operations and be in an excellent position to compete with other international energy markets. First, the strategic partnerships between refining, marketing, and technology enable the company to expand its market and use the best technology. This also strengthens innovation and sustainability in the operations. This collaborative approach guarantees that Saudi Aramco stays ahead of the curve as the energy industry experiences continuous change. At the same time, it also contributes to the broader aim of guaranteeing energy security and achieving environmental sustainability.
Source of Competitive Advantage
The remarkable preeminence of Saudi Aramco in the industry is the result of an enviable endowment of natural resources and a sophisticated operating model. The company is able to enjoy a great cost advantage due to the fact that it owns huge amount of oil and this further positions it as one of the leaders in the global energy market (Knudsen et al. (2021). Moreover, the company’s successful 4-decade history of oil and gas activities including exploration, production, and refining has huge potential for strengthening the operational effectiveness by improving feedstock and reducing costs (Baylis et al. , 2021). Additionally, the company is able to use its strong financial position when making strategic investments and acquisitions that reinforce its competitive position even further. This financial prowess is therefore supported by the organization’s technical knowledge and strong control over its supply chain. Marked funds keep its traditions and contribute to occupying a leading role in the oil and gas sector. They are carried out by the development of the newest technologies. In addition, the company’s a well-built up supply chain to operate involved in exploration, production, and refining entirely to ensure smooth process and timely service delivery. Being richly blessed with an action packed extra-resources and the latest technologies, Saudi Aramco is a strong company which stands out in the energy market and stays on top for a long period.
Dealing with the External Environment
Saudi Aramco has several tools to control and develop its external environment, contributing to its success and flexibility. Initially, the business had strong government links necessary for its sustainability by building close ties with the government of Saudi Arabia, which provided resources and policy support. Similarly, Saudi Aramco is participating in managing the energy transition by investing in renewable energy and carbon capture technologies, which help to adapt to global trends and secure its place in the changing landscape of energy. The company further accentuates social responsibility by integrating its social and environmental effects into various initiatives, improving its reputation and sustainability (Malik et al., 2021). In the future, Saudi Aramco could further enhance its expansion plans by venturing off oil and investing in clean energy technologies and substitute fuels to remain competitive in a shifting energy market. Strategic expansion into emerging markets with the need for power is an opportunity for partnership and acquisition. Moreover, the need for investing in human capital development through training and drawing skilled workers from around the globe will be necessary for maintaining competitiveness in the knowledge economy through being able to utilize skills for innovations and growth. These are developed based on the company’s current strengths to enhance them further in the future
Conclusion
Saudi Aramco is a textbook case demonstrating the importance of Saudi Arabian companies utilizing their rich resource base and capabilities to create a giant company in the global energy sector. Aramco has maintained its vital position in the oil and gas industry by effectively managing its external environment, maintaining good relations with the government, and actively participating in the energy transition. The company’s close ties with the Saudi government ensure access to the most critical assets and policy support, making it easier to solve regulatory issues and stay on top of the market. Besides, Saudi Aramco moves proactively in the energy transition by investing in renewable energy and carbon capture technologies, which shows its ahead-of-time nature and sustainability in a dynamic environment.
External Environment Strategies Discussion 1
Q – Please read the discussion below and prepare a Reply to this discussion post with
comments that further and advance the discussion topic.
Please provide the references you used.
Ensure zero plagiarism.
Word limit: 250 words
Discussion
A Case Study in Competitive Advantage and External Environment Strategies
Introduction
This article focuses on the international growth strategies of Saudi Aramco, one of the
global largest oil producers, as a case for Saudi Arabian companies. We will review how
Saudi Aramco has attained a competitive edge and has been able to cope with its external
environment. It uses analytical tools and theories from international business textbooks. This
paper will examine how Saudi Aramco captures its exceptional resources and core
competencies to make the best of the foreign market. Last, recommendations will be
given for a possible expansion based on academic sources.
Method of International Growth
The international expansion strategy of Saudi Aramco mainly focuses on the strategic
alliance, the capitalization of which will help the company to make use of foreign partners’
resources, know-how, and access to the market. Among various methods, joint ventures in
refining and marketing are worth mentioning because Saudi Aramco partners with major oil
companies worldwide to get access to new markets and energy distribution networks.
Besides, this tactic is about Saudi Aramco’s global presence and helps the firm’s partners
access the country’s oil resources (Shenkar et al., 2021). Apart from this, Saudi Aramco also
forges tech partnerships, cooperating with tech companies on their research and development
projects, mainly focusing on enhanced oil recovery and carbon capture. Through such
collaborations, the organization can position itself well in the market as it keeps up with the
latest trends and addresses environmental needs (Martin-Roberts et al., 20201). Through
creating tactical frames, Saudi Aramco can successfully combine the complexities of foreign
expansion with mutually beneficial outcomes. The cooperation also allows the organization
to change its operations and be in an excellent position to compete with other international
energy markets. First, the strategic partnerships between refining, marketing, and technology
enable the company to expand its market and use the best technology. This also strengthens
innovation and sustainability in the operations. This collaborative approach guarantees that
Saudi Aramco stays ahead of the curve as the energy industry experiences continuous change.
At the same time, it also contributes to the broader aim of guaranteeing energy security and
achieving environmental sustainability.
Source of Competitive Advantage
The remarkable preeminence of Saudi Aramco in the industry is the result of an
enviable endowment of natural resources and a sophisticated operating model. The company
is able to enjoy a great cost advantage due to the fact that it owns huge amount of oil and this
further positions it as one of the leaders in the global energy market (Knudsen et al. (2021).
Moreover, the company’s successful 4-decade history of oil and gas activities including
exploration, production, and refining has huge potential for strengthening the operational
effectiveness by improving feedstock and reducing costs (Baylis et al. , 2021). Additionally,
the company is able to use its strong financial position when making strategic investments
and acquisitions that reinforce its competitive position even further. This financial prowess is
therefore supported by the organization’s technical knowledge and strong control over its
supply chain. Marked funds keep its traditions and contribute to occupying a leading role in
the oil and gas sector. They are carried out by the development of the newest technologies.
In addition, the company’s a well-built up supply chain to operate involved in exploration,
production, and refining entirely to ensure smooth process and timely service delivery. Being
richly blessed with an action packed extra-resources and the latest technologies, Saudi
Aramco is a strong company which stands out in the energy market and stays on top for a
long period.
Dealing with the External Environment
Saudi Aramco has several tools to control and develop its external environment,
contributing to its success and flexibility. Initially, the business had strong government links
necessary for its sustainability by building close ties with the government of Saudi Arabia,
which provided resources and policy support. Similarly, Saudi Aramco is participating in
managing the energy transition by investing in renewable energy and carbon capture
technologies, which help to adapt to global trends and secure its place in the changing
landscape of energy. The company further accentuates social responsibility by integrating its
social and environmental effects into various initiatives, improving its reputation and
sustainability (Malik et al., 2021). In the future, Saudi Aramco could further enhance its
expansion plans by venturing off oil and investing in clean energy technologies and substitute
fuels to remain competitive in a shifting energy market. Strategic expansion into emerging
markets with the need for power is an opportunity for partnership and acquisition. Moreover,
the need for investing in human capital development through training and drawing skilled
workers from around the globe will be necessary for maintaining competitiveness in the
knowledge economy through being able to utilize skills for innovations and growth. These
are developed based on the company’s current strengths to enhance them further in the future
Conclusion
Saudi Aramco is a textbook case demonstrating the importance of Saudi Arabian
companies utilizing their rich resource base and capabilities to create a giant company in the
global energy sector. Aramco has maintained its vital position in the oil and gas industry by
effectively managing its external environment, maintaining good relations with the
government, and actively participating in the energy transition. The company’s close ties with
the Saudi government ensure access to the most critical assets and policy support, making it
easier to solve regulatory issues and stay on top of the market. Besides, Saudi Aramco moves
proactively in the energy transition by investing in renewable energy and carbon capture
technologies, which shows its ahead-of-time nature and sustainability in a dynamic
environment.
References
Baylis, J., Wirtz, J. J., & Johnson, J. L. (Eds.). (2022). Strategy in the contemporary
world. Oxford University Press. ISBN: 9780192845719
Knudsen, E. S., Lien, L. B., Timmermans, B., Belik, I., & Pandey, S. (2021). Stability in
turbulent times? The effect of digitalization on the sustainability of competitive
advantage. Journal of Business Research, 128, 360-369.
Malik, S. Y., Hayat Mughal, Y., Azam, T., Cao, Y., Wan, Z., Zhu, H., & Thurasamy, R.
(2021). Corporate social responsibility, green human resources management, and
sustainable performance: is organizational citizenship behavior towards environment
the missing link?. Sustainability, 13(3), 1044.
Martin-Roberts, E., Scott, V., Flude, S., Johnson, G., Haszeldine, R. S., & Gilfillan, S.
(2021). Carbon capture and storage at the end of a lost decade. One Earth, 4(11),
1569-1584.
Shenkar, O., Luo, Y., & Chi, T. (2021). International business. Routledge.
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