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Category: Business Plan

Subcategory: Business

Level: College

Pages: 15

Words: 4125

ADNOC (Abu Dhabi National Oil Company) Business Plan

Executive Summary
In the United Arabs Emirates, Abu Dhabi National Oil Company (ADNOC) is known for its competence in oil production and other related services. Moreover, the company is fourth among the largest oil companies in the whole world (Tareq, 2005). It has proved beyond reasonable doubts to have the potential to provide products that satisfy most parts of the world. In the year 1971, it is when the company was introduced with the aim of operating all oil and gas entities in the whole of United Arabs Emirates. First, it concentrated on two products; oil and gas production but later it started expanding. It started offering chemicals and other products like maritime transportation as well as support services. However, in the past four decades the company has improved by far. It has expanded its territories by establishing a stiff competition with the existing related companies in UAE and some parts of the world. In addition, the company has developed and started up many projects that have taken the initiative of expanding its revenues and other means of income. For instance, in 2009 the company started up the ‘ADNOC Sustainability Performance Initiative.’ It was a program that targeted equalizing the needs of the society and the resources of the Earth. Moreover, the company has participated in the development of learning institutions that help in producing skilled UAE cadre for the sector of energy. Among the institutions are The Glenelg School of Abu Dhabi, and The Petroleum Institute. Currently, the company has fifteen subsidiary companies that are representing it in various departments like that of oil and gas production. The company is aspiring to grow and run more operations and subsidiaries in future. It is targeting to advance and become the biggest company in the whole world.
Company Description
ADNOC was developed in 1971 and afterward it became the most influential oil and gas production company in the whole of UAE. The company was mainly started up due to an opportunity of oil extraction in the Arabs countries. Meanwhile, people did not have a better corporation that would help them sell their products or even utilize the existing resources. The company was set up to provide them with advanced products that will satisfy their needs and wants. Afterward, the company started identifying new opportunities as well as adding up new products and services. For instance, the company introduced oil refining and gas production, petrochemicals, and even refined products and distribution. All the efforts were to see the company grow as it had the most influential people in the whole world backing it up; the Arabs. The management wanted to utilize all the resources available to ensure the company grows as the society enjoys the share.
However, at first the company concentrated on local selling where all produced products were sold to local people; no surplus was available and hence trading would not be efficient at the time. Moreover, the company did not have lots of customers and hence it would struggle to survive with the few it struggled to maintain each day. In the past four decades, the profile of the company started to change abruptly as it took over the entire United Arabs Emirates regarding valuable products and services. Most businesses collaborated in modifying the company to make it unique for a better future. Now, the company has advanced as well as adding up more activities that involve marketing and distribution of their products and services, shipping to the customers from the exterior and also transportation to ensure easy access and efficiency to the customers.
The company has proved by all means to be unique and even better than others. For instance, it is very hard to find the substitutes of ADNOC Company’s products. No customer would afford to forego the products of the company for another since they have proved their high competence since the company was started. However, the company has a wider market in the whole world. It serves National Marine Services with all the products they require for their vessels. Also, the company has a market of gas shipping that goes to the entire world. Moreover, the company targets fertilizer markets. For instance, it has Ruwais Fertilizer department that serves farmers from all corners of the world. However, due to the increasing demand of their products and services, ADNOC Company has released a report on the plan of opening more than 125 stations that will serve customers with oil and diesel (Tareq, 2005). The motive of opening the new stations follows the government policy that heightens the percentage price of both products.
Business Environment Analysis
All businesses are situated in an environment that has both internal and external factors that favor the business or even affects its normal running (Barrow, C & P, 2008). ADNOC Company is located in the United Arabs Emirates, a place with adequate resources to favor the operations of the corporation. For instance, the availability of oil sites strengthens the company by making sure they have raw materials. Moreover, the company is located in an economically, and socially grown environment. All that the company wants is the success and hence it has the support of the environment.
The environment also attracts partners from all over the world who join the company and play a big role in supporting its progress and daily operations. There is a mutual understanding between the company and the partners. The government also supports the company and hence eliminating a form of political challenge that may affect the company. Moreover, it benefits the countries due to the increase in the rate of return. Therefore, the environment that surrounds the company has all that it takes for the company to grow and develop for future prosperity. People living around the company improve their living conditions as well as their works as the company goes to the next level.
Competitive Analysis
It is very hard to understand the products and services other companies are offering without knowing what other companies are undertaking each day. To understand how competitive a market needs to understand the competitors as well. For instance, the competitors of ADNOC include the Kuwait Petroleum Corporation, Oman Oil Company S.A.O.C, Qatar Petroleum, Petroleum Development Oman L.L.C and North Oil Company. However, the competitors have strengths and weaknesses that make it unique and competitive in the whole world. For instance, they all have products that are emulated and loved in the whole world. Second, all the companies have specific customers whom they strive to offer high-quality products and services. However, most of the companies are disadvantaged by the location where they fail to honor the aspect of accessibility. Also, not all the companies that have ready raw materials like the ADNOC Company (Tareq, 2005). The fact makes ADNOC the most influential and progressive company in the whole world. It has also been able to overcome and defeat most of its competitors.
The role of ADNOC Company in the marketplace is to feed customers with most venerable products as well as services so as to be able to compete with the most influential companies in the whole world. Moreover, it takes the initiative of identifying opportunities as they come and apply all means to be able to implement them for better outcomes. ADNOC Company is an example of companies that utilize all the available resources for profits. The company has been admired by many nations as well as corporations due to its effective management that delegates tasks to employees equally and proficiently. The management also ensures all the workers cling to the ethics of the company and prevent any form of misconduct that in one way or the other may affect the operations of the company.
Market Analysis
ADNOC Company is known for its products in the entire world. However, being number four among the top most influential oil and gas production companies in the whole world, the company has gotten a chance to capture lots of customers in most parts of the globe. Therefore, the company is seen to operate under different segments that give it an opportunity to grow every day. The size of each segment is determined by the number of the customer as well as the value of the products being offered. The potential customers of the company can be the Marine Companies which expect the supply of oil and gasses at the certain duration of time. Farmers are another group of potential customers; the company works on and provides different types of fertilizers that help farmers all around the world to improve their production. Apart from the Marine Companies, ADNOC supplies oil and gasses to most countries in the world. Therefore, nations can be seen as the potential customers since they frequently require the products for the running of their daily activities. ADNOC Company fulfills all the aspects and approaches required of a petroleum industry due to its cool integration of both oil and gas production. The company deals with both wholesale and retail selling and hence forming different prices (Dhs/liter). The prices of the different products are as follows in the retail selling in the year 2015 starting from December; Unleaded Gasoline 98 is 1.79 Dhs/liter, Unleaded Gasoline 95 is 1.68 Dhs/liter, Gasoline E plus 91 is 1.61 Dhs/liter and lastly the diesel which was 1.83 Dhs/liter. However, different values are seen in each month as the company keeps adjusting them for the purpose of capturing more customers. In the wholesale selling the values are different. For instance, in the year 2014 kerosene was selling at 2.76 Dhs/liter having depreciated from 2.91 Dhs/liter that was recorded in the year 2013. In the year 2011, the values of the different products were recorded as follows in wholesale selling; Unleaded Gasoline 98 1.83 Dhs/liter, Unleaded Gasoline 95 1.72 Dhs/liter, Gasoline E plus 91 1.61 Dhs/liter, Jet 2.99 Dhs/liter, Diesel 2.5 Dhs/liter, kerosene 3.05 Dhs/liter and lastly the fuel oil 2.21 Dhs/liter.
Comparing the prices of 2011, 2012, up to 2015, it is clear that the prices are depreciating according to the UAE Fuel Prices (Brooks, 2006). However, the company targets various groups of people that are currently seen as the building blocks of the company’s products and services. For instance, the company wants to start up a $10 billion project by 2020 which will deal with Bab gas. The project is met to target the tourists by forming venerable locations where they can enjoy a moderate environment. Moreover, the company targets 3.5 million by 2017 from crude oil market. The company has conducted a smooth research and come to a conclusion due to the increasing demand of the product in the modern market.
Organizational and management
Organization and management of a business matter a lot while conducting the business plan; different corporations are structured differently depending on the goals as well as the available resources (Barrow, C & P, 2008). Also, the structure is modified on the size of the organization. ADNOC Company has a total of 122 executives in its organizational structure; all works together to yield better outcomes for the company regarding supply and even production of new products and services. The executives encourage innovation and creativity that has so far increased the proficiency of the whole entity. Abdulla Nasser Al Suwaidi is the CEO of the company and takes the top most position in the hierarchy. Khalifa Al Nahyan follows regarding leadership and powers as the Chairman of the Board. He coordinates and arranges all activities that involve the board and the ways of governing the company.
The hierarchy is followed by various directors from the top to the bottom; Khalifa Al Kindi, Mohamed Al Nahyan, Hamed Al Nahyan, Mansour Al Nahyan, Sultan Al Nahyan, Mohammed Al Nahyan, and Hamad Al Suwaidi. The company also has the production planning and shipping manager and the services and communication director who take care of production and communication departments respectively. The company has an addition of a total of 88 members in the management. However, the company has concentrated much on emulating a good working condition and making the world a better place to live in. It has a total of 5000 employees who are encouraged to work with all due respect to maintaining the society. Social responsibility is much encouraged in the cultures of the company to show how the corporation is much interested with the welfare of the people. Therefore, all that the company does, whether in the production sector or in selling department is sore to meet people’s satisfaction.
The company has shown lots of cooperation with the society. For instance, employees are urged to maintain their professional ethics at all costs and to serve customers with all due respect. Moreover, the company listens and attends to the grievances of the members of society. Once an issue has been raised, all the members of the board intervene and work on solving the issue. Therefore, cooperation is so much valued in the entire company. In decision making, the company incorporates all the members of the board and the employees as well. The bottom-up method of making decisions is used to ensure all members of the corporation are included. The approach helps in reducing blames as the company is dealing with the most sensitive operations that involve the environment all creatures are living in. Moreover, the company has given employees lots of mandates that follow policies to govern their conducts at each activity carried out. They are required to respect the corporation and the society as well, to ensure no form of corruption or misconduct is experienced within their line of duty.
Therefore, the decentralized organizational structure has various advantages to the progress of the company. For instance, it brings the decision making processes closer to the groups that urge to understand and utilize the decisions in the conditions of the geographical market. Moreover, the management has introduced a 24-hour service program to enable them meet the demands of the large market they are struggling to sustain.
Besides having different unit manages, the company has one manager who delegates works and gives the direction of how and where operations should be carried out. Therefore, all units’ mangers are supposed to file reports that are given to the head-office through the hierarchy. The service departments can be divided in processing department, finance sector, human recourses sector, communication department, and commercials among other divisions. All the efforts and successes of the company can be traced from the equal distribution of tasks and operations that is uniformly revealed in all sectors.
Service or Products line
At first, when the company was formed in 1971, it concentrated much on oil and gas products. It never had a large market where it would sell its products and hence, it concentrated on the few products that would be sold locally. Following the growing technology and the increase in demand of ADNOC’s products, the company has expanded and added up many of the products and services that people from all over the world are enjoying today. For instance, the company has been producing oil and fuel for air, commercial products as well as services and land and sea transportation. All the efforts are directed to the growth of industries in the marine departments. The company has also ventured in products that motivate construction and manufacturing.
However, the company has shown lots of competence in its products; automotive lubricants from the company are playing a major role in improving the manufacturing of lubricants. Also, the company is producing and selling marine and industrial lubricants as well as coolants, brake fluids and grease for specific purposes. Therefore, the company has established a long lasting relationship with the marine and aviation companies due to its fuel distribution. The fore mentioned companies form a potential customer to the company and hence improving its sales every day. The other product that the company has ventured in and shown great competence is the gas. It supplies liquefied natural gasses via different stations. For instance, Al Ain and Abu Dhabi which are continuing to grow and expand supplies the largest quantity of gasses in the whole of UAE and the world at large. Recently, the gas production plants have taken the initiative of expanding the gas cylinders compared to the ones used before. It is for the effort of keeping the existing customers as well as attracting new ones for the benefit of the whole entity.
The products and services that the company is offering benefits customers in many ways. For instance, the Marine who often use their vessels for the purpose of improving and maintaining security, they need an active company like ADNOC which will ensure they obtain the products they want as first as possible. Thus, it brings the act of mutual benefit where both companies benefit. In the Aviation, fuel and lubricants are needed to sustain the daily running of the company. For instance, in the production of new products, the aviation needs a continuous supply of fuel and lubricants. ADNOC is always there to ensure its customers get satisfied with value of their products as well as fair prices.
However, the company uses certain products and service design to establish a long-lasting relationship with its customers. For instance, the company encourages the employees to ensure they attend to customers efficiently and ensure they are satisfied with the products and services they receive. The lifecycle of the ADNOC Company’s products has four stages. The first one is the introduction of the products; it was experienced when the company was being introduced back in the year 1971. The second stage is the growth stage that follows the introduction of the product. In growth stage, the company is struggling to add value to its products as well as adapting to different mechanisms that would ensure the smooth running of the company’s operations. After growth stage, then there is the maturity stage; currently, ADNOC is at maturity stage. In the stage of maturing, the company has few to change or even do (Tareq, 2005). The company has done all and now it is time to watch the products and services advance. The main focus in the maturity stage is the future demands of the products that the company is planning on offering.
Market and Sales
Marketing and selling of products are other essential aspects of a business plan. The two works totally different but they compliment with one another. For instance, marketing starts even before the products are produced. ADNOC Company started its marketing early before it was established in the year 1971. It is an aspect that helped the company realizes the potential customers as well as the needs to address in future. Marketing allows the company to understand the customers it is dealing with, their wants and needs and lastly their availability as well as regularity.
Since marketing is a continuous process, ADNOC Company is still continuing with its marketing activities to increase the number of customers and also understand what customers require of the company in future. Thus, it is carrying out its marketing through different ways. For instance, advertisement; adverts of the company are all over the media, televisions air their products often to create awareness to the potential customers. The company allocates lots of money every fiscal year to ensure customers are reached by all means of advertising. Moreover, the company has accounts on social Medias like Twitter and Facebook where they often post when they have a new product, service or even they have a message that they want to communicate to the customers.
However, in some cases the company uses the existing customers to market their products and services. The method has proved to work and favor the company regarding marketing expenses. For a company to use existing customers, it should ensure it has venerable products and services that surpass all the substitute products. Therefore, the company manages to allocate some amount of cash and use it for discounts and other commissions that will motivate customers to refer friends or even family members. The company assures customers of safety while driving using their fuels or even when cooking with their gasses. The same terms of safety are used as stickers in the cylinders they use to park fuels and gasses. Also, the terms are utilized in their adverts that are shown on TV and written in different social media platforms. Therefore, the company has successfully shown people from all over the world what they got and the efficiency of their products. The company has also established a tight profile that has given the company a high reputation and the ability to compete with the largest oil and gas companies in the whole world. The only approach that is left for the company is the one of satisfying the customers with high-value products and services.
However, selling starts after the products have been designed and even modified. For instance, ADNOC Company started selling its products and services after the company was started in the year 1971. The goals of selling matters a lot, the company started by selling oil and gasses; it was the chief producer of oil in the whole of UAE (Brooks, 2006). It never made mush sales in the first years but due to the effort of the founders and the existing customers, the company started expanding. In 2009, the company created a history in the United Arabs Emirates by releasing 2.9 million barrels of oil that were sent to abroad nations. The barrels were accompanied by 237 bcf of gas in the same year.
Afterward, the company expanded its production since money was coming in frequently; it took over the oil production sector of UAE by 94%. The selling activities of the company involve setting up of wholesale and retail shops that are all over the world. Moreover, the company has a website where people share their views about the company as well as ordering for specific products and services. ADNOC has also extended its services and formed a system that allows customers to inquire for directions and also for new products that may be added to the market without their awareness. Also, in the selling of products and services, the company has also the target accounts. In most cases, it is very hard for the company to sell to the end user. Thus, it sets out some ways of reaching the customers through the website of linking them through other services centers.
Financial projections
Financial projections is another special aspect of a business plan that provides the past financial reports of the company, the present and the future predictions that the company wants to achieve in the certain duration of time. Since its formation, Abu Dhabi National Oil Company (ADNOC) has shown a positive progress. It started as a two-product company that competed in UAE regarding production and supply of Oil and gas. ADNOC forms the largest UAE’s company in the production of petroleum and gas. In the year 2013, the company recorded revenue of $123 billion which was up by $53 billion comparing to the $70 billion that was recorded in the year 2010. The company has heightened the reputation of the Middle East countries since UAE has been recorded as the most influential financial area in the whole world. Gross Domestic Product of the company has grown by 5.2% in the year 2013 (Clements, 2013). Therefore, it is clear that the company has impacted even other activities in its surrounding like the development of real estate.
In the year 2014, UAE showed much progress in the way of producing oil and other liquids. For instance, it produced $3.5 million barrels of oil and other liquids. However, the price of one barrel is $3 which makes $10.5 million per day. The estimation of the cost per month comes to $315 million. Comparing the price of oil per barrel in the recent years it is clear that the price will continue to rise as the economy grows. For instance, in the year 2012 ADNOC Company produced $1.5 million barrels per day which totaled to $4.5 million/day (Clements, 2013).
Due to the increasing demand as well as the rate at which the economy is growing at, the company will produce an estimate of $1.8 million barrels that totals to $5.4 million per day. The advancement of the modern technology, as well as increase of income in most countries, supports the expansion of the oil production and other products. Moreover, as money continues to expand and add up, it means the company will extend its service stations. The report shows that the company is planning to start up various stations in Dubai to help manage the growing rate of production of oil. 125 service stations are already set to ensure the barrels of oil extracted gets a ready market.
Barrow, C. & Barrow, P. (2008). The business plan workbook the definitive guide to researching, writing up and presenting a winning plan. 6th e.d. London. Kogan Page.
Tareq, A. (2005). 8th Abu Dhabi International Petroleum Exhibition & Conference (ADIPEC). London. Society of Petroleum Engineers.
Brooks, J. (2006). Classic petroleum provinces; United Arab Emirates. London. Geological Society.
Clements, F. (2013). United Arab Emirates. Washington. International Monetary Fund.

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