Valero Energy Comprehensive Analysis College Admission Essay Help

Introduction

With the development of technology and the evolution of business tactics, organizations and businesses must continually examine their marketing plans. This is to ensure that they remain on the market and are not surpassed by rivals and other substitute products (Ray, 2007). In order for a business to convert risks into opportunities and weaknesses into strengths, it must design and implement appropriate plans and clearly define the measures it will take to do so. The article covers the external environment and organizational structure of the Valero Company, identifies contemporary potential and obstacles to change, and concludes with recommendations. The report is crucial for future expansion and development because it serves as the foundation for Valero Energy Company's self-evaluation.

Valero Energy

Valero Energy is the largest oil refiner in North America. Valero increased its annual revenue to $90 billion following the recent acquisition of competitor refineries. The rapid rise of Valero has been beneficial for its stockholders, but a nightmare for its information system management professionals. The company refines heavy crude and inexpensive residual oil to produce gallons of diesel. It operates refineries in California, Louisiana, New Jersey, Oklahoma, Tennessee, Texas, Aruba, and Canada, with a total production capacity of around 3 million barrels per day. It also operates around 5,800 retail gas stations and wholesale locations in 44 U.S. states and Canada under the names Corner Store, Diamond Shamrock, Shamrock, Ultramar, Valero, Stop N Go, and Beacon (Nohria, 2002, p. 46).

Pestel Analysis

Political: Valero Energy confronts significant political risks in the nations where it operates, although the political climate in the majority of countries is supportive to the company's operations. The political situation in South Korea has become a source of concern for Valero Energy in recent years, as the country confronts political instability. However, the situation is not as dire as in other nations in which the company operates. This is especially true in Africa and Southeast Asia, where unfriendly business environments place Valero Energy at a substantial disadvantage (Mandan, 2005). As stated earlier in this article, the corporation is proud of its original approach to technology and utilization of the same for the release of goods that incorporate cutting-edge technologies in their design and functionality. Valero Energy's technological capabilities are well-known, and the corporation is particularly strong in this area. The company's innovation drive is its greatest asset, and it can take pleasure in being a pioneer for numerous technological advances that it has presented to the global marketplace through its products (Donald, 2005). Economic: Valero Energy employs effective methods in the markets it serves, taking into account the size of the economy and the purchasing power of consumers in terms of characteristics such as disposable income. Given that the corporation requires clients to have high amounts of disposable income in order to purchase its products, it has adopted a marketing strategy focused at the middle classes in the nations in which it operates. In addition, the corporation enters markets where the business cycle for the products it offers is in its infancy, as opposed to industrialized nations where the product lifecycle for its range of products is in its decline or maturity phase. This strategy of entering countries where the items have an established market has paid off (Lancaster, 2009). Environmental: The company has begun to recognize its environmental and social responsibilities, as indicated by its CSR strategy and "green policies." Many of the company's industrial buildings are constructed using ecologically friendly designs, and the corporation is also implementing other environmentally conscious practices (Donald, 2005).

An assessment

Porter's Five Forces Analysis

In the expansion, several considerations must be made. There are internal and external company environments. All recommendations must be made following the PESTLE analysis. The subsequent section examines the many external issues that have impeded Valero Energy's expansion. I study Valero Energy using Porter's Five Forces model in this part. In addition to analyzing the five forces, the impact of stakeholders on the company's business prospects is also considered. Each force is analyzed in depth and presented in relation to the firm's macro and microenvironment (Lancaster, 2009).

As there are numerous providers on the market for raw materials, the suppliers' bargaining strength is rather restricted. There are well over a thousand oil suppliers in South Korea and throughout the world. Valero Energy is reliant on its suppliers for timely oil delivery; hence, any disruption to the supply chain can be problematic. Market Entry has a significant influence since Valero Energy has found it simple to enter areas where it wishes to conduct business. Valero Energy, for instance, has entered China and India, two rising countries that provide the volumes that expanding business requires (Donald, 2005). The relative ease with which Valero Energy has entered these markets is a force that can be utilized for the company's benefit. Due to the growth of protectionist inclinations in the aftermath of the global financial crisis, it may be more difficult for Valero Energy to acquire markets as easily as it has in the past. Existing players' competition is an issue that must be considered while considering whether or not to enter a foreign market. This is something Valero Energy must consider while determining its approach for entering foreign markets (Ray, 2007). Power of Buyers: Indeed, the power of buyers is a variable factor. This is because purchasers have a variety of options and products from which to chose. Taking into account the fact that there are several oil suppliers and products will assist the business in determining its market areas. In addition, some cars and machines are intended to use goods other than diesel, which severely impacts the marketing of Valero's diesel gallonage (Lancaster, 2009). Valero Energy has an edge due to the fact that purchasers cannot immediately transfer suppliers; instead, they take the time to adjust and adapt, switching brands only when they are entirely unsatisfied with the company. This has helped Valero retain its current clientele. This is the erosion of so-called "repeat customers" as they lose confidence in the brand's capacity to deliver the goods (Laforet & Li, 2006). The Danger of Alternatives: Indeed, substitutes pose a significant danger to a corporation like Valero Energy. Given that the consumer durables industry is characterized by severe competition, with competitors often offering items similar to those of Valero Energy, it is not surprising that the company must be on its toes to keep up with the rapid rate at which new companies are entering the market. Given these facts, the competitive threat to Valero Energy is undoubtedly considerable, and this is one of the Five Forces that poses a serious threat to the company (Donald, 2005). Industry Competition: Due to the presence of other competitors, this element's impact is unquestionably significant. Particularly in rising areas such as India, competition is so severe and intense. Stakeholders: Because of the emergence of the environmentally-conscious movement and the push towards CSR (Corporate Social Responsibility), companies such as Valero Energy have become more attentive to the concerns of these organizations in recent years. The fact that shareholders are progressively demanding greater accountability and transparency in the wake of recent scandals is evidence of their rising ability to keep Valero Energy's management accountable and responsible.

Present the expansion plan and an internal study

By acquiring many companies that were themselves the result of multiple acquisitions, Valero was left with dozens of incompatible software systems that needed to connect and share data. Although a conventional option would have been to create or acquire middleware to bridge the gap, Valero opted for a cutting-edge software development strategy known as service-oriented architecture (SOA).

Software experts at Valero initiated the development of software services to offer users with an interface to the company's heterogeneous systems. They designed them for flexible reuse and recombination (Mandan, 2005). Valero hoped that by using a service-oriented architecture, it would be able to integrate its diverse information systems, conduct business more efficiently, and lower operating expenses. Over time, the company has released more over one hundred services built on SAP's Net Weaver Applicant server Development Environment. Many are composite services composed of multiple smaller services. Approximately 22,000 employees and 5,000 clients utilize SOA services provided by Valero (Gregory, 2007). As a result of their SOA strategy, Valero has saved millions of dollars. A technology developed to provide visibility into tanker transportation timetables saved the corporation $500,000 in dock-idle charges. The ability of management to monitor corporate data from across the company in real-time results in further cost reductions.

Valero is developing tools that enable managers to create their own SOA services. If managers can get the information they require without going through the standard system request procedure, the business is streamlined and the information system team is freed up to work on larger initiatives.

When tackling a new service request, rather than coding from scratch, Valero software engineers examine previously built services to identify one that can be reused or refashioned. Valero saves time, effort, and money by organizing and cataloging reusable services. Using Net Weaver platforms, Valero engineers were able to construct 300 services rapidly and easily. Before moving forward with new development, Valero's director of enterprise architecture and technology services, Nayaki Nayyer, reduced the number of services to 50, isolating the finest core services.

Valero L.P transports refined goods from Valero energy Corporation refineries to the Southwest market through pipeline. It also provides feedstock to Valero Energy's main refineries. The company owns a 25-mile hydrogen pipeline system and 3.795 miles of crude oil and refined products pipelines that carry an average of 35550,00 barrels per day (Donald, 2005). The company possesses sixty crude oil and intermediate feedstock storage tanks with a total capacity of roughly 12,500,000 barrels. Valero carries refined products such as gasoline, distillates, natural gas liquids, feedstock, and crude petroleum. Transporting crude oil and processed products through its pipelines incurs fees, as do terminal use fees. All of the Company's crude oil and processed product pipelines are operated in San Antonio and Dumas, Texas, via satellite communication and computer systems (Logan, 2001). In July 2005, the company agreed to sell a terminal and pipeline in the Rocky Mountains with four truck terminals and storage to a subsidiary of Pacific Energy Partners, L.P. for $455 million. Valero acquired Kanab services LLC, Kanab Pipe Line Partners, L.P., and all of Kanab services' equity securities for about $2.7 billion in July. The combined firm will be one of the largest operators of terminals and petroleum liquids pipelines in the Valero Energy States (Ray, 2007).

Employees at Valero have access to educational reimbursement, a fitness center, and a wellness program that offers information and events on nutrition, fitness, family, injury prevention, and stress management. In 2004, Valero employees volunteered for community projects for 200,000 hours and gave $9 million to the Valero Energy Way.

The severely faltering ethanol industry in the United States has its fair share of distressed assets. Valero energy, West LB, Dougherty Funding, and AgStar Financial Services have offered a total of $993 million to acquire all 16 of bankrupt ethanol manufacturer VeraSun Energy's ethanol units (Logan, 2001). Notably, Oil Company Valero energy successfully bid $477 million for seven VeraSun facilities and one potential development site, which is equivalent to $0.61 per gallon of installed capacity. This is inexpensive compared to the about $1/gallon it cost to build a Greenfield plant at the beginning of the ethanol craze in 2006 or the $2/gallon it cost during the height of the boom, and it is painfully obvious how much things have deteriorated (Mandan, 2005).

Valero Energy Change Obstacles

Valero Energy has been impeded by a variety of obstacles. Numerous Oil Companies' robust market bases have impeded its expansion. Valero Energy's operations region has also been constrained by insufficient cash and a deficiency of branches (Mandan, 2005). They operate with a limited number of branches that have not been able to completely cover the market. The current design of the company does not provide for greater expansion. The simplistic form allows for minimal growth, if any. Therefore, it is crucial and essential that Valero Energy Company's design be modified to meet modern requirements. This has been a barrier to change, but it appears to no longer be so. In addition, marketing strategies should be modified. The second obstacle to change is technological progress. Numerous businesses and enhanced performance are the outcome of this phenomenon (Ray, 2007).

In today's businesses, evolution is inevitable. For the firm to achieve success and preserve its competitive advantage, it must be adaptable to change. There are various obstacles to change, including ineffective communication, ineffective leadership, and a lack of readiness to change (employees and employers). Valero Energy's organizational structure hinders efficient communication between employers and employees. The lack of communication skills has operated as a barrier to transformation (Mandan, 2005).

Suggestions and Enhancements

The Valero Energy Company must protect its future in the corporate sector, therefore the development of a future-focused strategy. The formation of this strategy starts with the personnel and product competences. “It is crucial to build a strategic architecture that essentially ensures customer satisfaction in the context of meeting the relevant requirements.” (Gregory, 2007, pp. 22-27).

Particularly among Valero Energy's managers, it is essential to emphasize the characteristics associated with effective strategic management. These qualities require constant education and enlightenment in accordance with the changes that are perceived in the environment; consequently, it is crucial that managers and the Valero Energy company share a bond and exhibit certain types of characteristics; otherwise, "one of the aforementioned will compromise his or her values" (Donner, & Camlio 2008, pp. 39-47). There will be a need for a manager to reflect the same value as an organization.

The strategies that are employed by the Valero Energy group need to be flexible; this is because “the world that we are currently living in is bound to changes either in the macro environment or the micro environment” (Ray, 2007, pp. 24-26). Therefore, Valero Energy's Vision must be expanded to adapt

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