Sapura Energy Berhad Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Define your industry
I have selected Sapura energy Berhad organization; it is an integrated gas and oil services company. It operates in oilfield services industry.Thecompany has reported net revenues of 2432 million dollars in the fiscal year of 2015 with net income of 350 million dollars in 2015.
Conduct a PESTEL analysis of your (chosen) industry
Political Factors
Political factors are represented by the influence of a political party or government on the particular industry or company on the regional level, national level, or international level.
This industry plays an important role in the economic growth of any country, if we talk about Malaysia where the Sapura Energy is operating, there are 3500 national and internationaloil and gas companies and this industry contributes about 30 percent in the GDP of the country.
For most of the countries, oil and gas industry is the strategic point in economic, social and political needs of the country. This industry has the influence on energy production, production of goods and chemical production.
In the oil industry, the most influential organization is OPEC that has more than 40% of the world oil production. It has great influence on the oil prices.

Sapura Energy Berhad Harvard Case Solution & Analysis
Instability of oil price which affects the exploration and as a service provider this will be alarge impact on our business. When the price slumps down, the drilling or exploration in new areas will be stopped, thus the company growth is temporarily suspended.
Furthermore, our profit margin will alsoreduce since the major oil companies will take necessary steps to reduce their operating cost. Additionally, the company needs to spend or pay for their un-operational assets such as drilling rig, barges, ships and tools.
Increase or decrease in tax would affect our business either locally or internationally. Governments or countries might increase taxes for some companies and lower it for others. This decision will have a direct effect on us. So, we need to stay up-to-date with such political factors. Government interventions like shifts in interest rate can have an effect on the demand patterns of thecompany.
Malaysia is one of the politically stabledcountries and it is apositive point for the companies operating in Malaysia, in a way that rules and regulation would not change and company’s focus would be on increasing profitability rather than on the political environment of the country.

Economic factors
The economic factors are represented by the influence of the demand and supply on the oil prices. Since 1973, OPEC has controlled the supply of oil, it has imposed alimit on the supply with the 61% of the world’s exports. But now, US Shale is giving tough competition to the OPEC, as its production has doubled between the 2011 and 2014.Earlier, what OPEC did, it limit the supply of the oil and this results in the increase in the prices of supply and further, it increases the profits of the OPEC countries.Now US shale is giving competition to the OPEC and from this competition, oil prices have witnessed the decline and it is beneficial for the companies like Sapura Energy, as their cost of raw material would decrease.........

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