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5/13/2018 Business Strategy - slidepdf.com
http://slidepdf.com/reader/full/business-strategy-55a750fbb3c2e 1/18
Financial statement analysis
Ellie Wilbraham
An Qian ChenJohnny Chiu
Case Study:Woodside petroleum
5/13/2018 Business Strategy - slidepdf.com
http://slidepdf.com/reader/full/business-strategy-55a750fbb3c2e 2/18
Agenda
IntroductionIntroduction
Economic &I
ndustry AnalyseEconomic &I
ndustry Analyse
Competitive strategyCompetitive strategy
2/25
Growth and profitability
5/13/2018 Business Strategy - slidepdf.com
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I ntroduction
3/25
Introduction
Company
Background
E conomic
analysis
Porters 5 forces
Industry analysis
SWOT analysis
Competitive
strategy
Corporate
strategy
Sustainability
Industry growth
Company growth
Future
profitability
Conclusion
5/13/2018 Business Strategy - slidepdf.com
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C ompany background
Exploration company for natural resources,Oil and Gas
Based in Western Australia
Founded in 1970s Focus on LNG- liquefied natural gas
Expansion and growth actions Pluto
4/25
Introduction
C ompany
Background
E conomic
analysis
Porters 5 forces
Industry analysis
SWOT analysis
Competitive
strategy
Corporate
strategy
Sustainability
Industry growth
Company growth
Future
profitability
Conclusion
5/13/2018 Business Strategy - slidepdf.com
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E conomic analysis
5/25
Newspaper Articles Australian financial review
Internet sites- RBA, ASXCurrent situation-
Environmental factors
Government policies (carbon Tax)
Foreign exchange rate (USD/AUD)
Energy sector GDP
Companys place in industry Company financial reports
Analyst website reports
current news
Introduction
Company
Background
E conomic
analysis
Porters 5 forces
Industry analysis
SWOT analysis
Competitive
strategy
Corporate
strategy
Sustainability
Industry growth
Company growth
Future
profitability
Conclusion
5/13/2018 Business Strategy - slidepdf.com
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I ndustry analysis - Porter¶s five
forces
6/25
Introduction
Company
Background
E conomic
analysis
Porters 5 forces
Industry analysis
SWOT analysis
Competitive
strategy
Corporate
strategy
Sustainability
Industry growth
Company growth
Future
profitability
Conclusion
5/13/2018 Business Strategy - slidepdf.com
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I ndustry analysis
7/257/25
Porters 5 forces Rivalry among Existing Firms (high)o High fixed costs
o High exit barriers
o Low levels of product differentiation
Threat of New Entrants (low)o Economies of scale
o Capital requirements
o Government policy/approval for explorationand extraction
o significant regulatory environment withinthe oil and gas industry, which is restrictiveto the entry into the industry
o High exit costs
o First mover advantage
Introduction
Company
Background
E conomic
analysis
Porters 5 forces
Industry analysis
SWOT analysis
Competitive
strategy
Corporate
strategy
Sustainability
Industry growth
Company growth
Future
profitability
Conclusion
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I ndustry analysis (cont)
8/25
Threat of Substitute Products/Services(low)
o limited substitute products available in the market Shifting to renewable
energy sources is costly and will take time, which is in short supply
o There are several substitutes for coal and consumable fuels within the
power generation market -nuclear fuels, alternative energy sources etc.
o However, while power companies can alter their primary energy mix to a
small extent without incurring many costs, a thoroughgoing transition to
these substitutes would require investment in different generation facilities,which constitutes a very high switching cost. Overall, the threat of
substitutes within the global oil, gas and consumable fuels industry is weak
but still growing with technological advances.
Introduction
Company
Background
E conomic
analysis
Porters 5 forces
Industry analysis
SWOT analysis
Competitive
strategy
Corporate
strategy
Sustainability
Industry growth
Company growth
Future
profitability
Conclusion
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I ndustry analysis (cont)
9/25
Bargaining Power of Consumers (moderate)o Buyers are concentrated - there are a few buyers with significant market
share
o Buyers purchase a significant proportion of output - distribution of
purchases or if the product is standardizedo However, the fact that oil, gas and coal are strategically important to its
users tends to weaken buyers strength.
Bargaining Power of Suppliers (high)o Major suppliers are gas and oil equipment and services providers, meaning
limited number of suppliers and their importance to the industry increases
supplier power.
Introduction
Company
Background
E conomic
analysis
Porters 5 forces
Industry analysis
SWOT analysis
Competitive
strategy
Corporate
strategy
Sustainability
Industry growth
Company growth
Future
profitability
Conclusion
5/13/2018 Business Strategy - slidepdf.com
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SWOT analysis
Strenghts Weaknesses
Retaining highly skilled and motivated
workforce, as evident by record number of
new employees in 2010 and a low attrition
rate
Cost of sales, royalty and excise costs
increased. Production costs were
unfavourably impacted by higher
AUD:USD. Exploration and evaluation
expenses were higher coupled withincreased general and administrative
costs.
Opportunities Threats
More investments in Asia as Asian
economies have recovered well from
the global downturn and have
generally returned to high levels of
economic growth.
The financial crisis
Environmental factors
Exchange rate influence
Increased competition for labour
Fragile industrial relations
environment.
10/25
Introduction
Company
Background
E conomic
analysis
Porters 5 forces
Industry analysis
SWOT analysis
Competitive
strategy
Corporate
strategy
Sustainability
Industry growth
Company growth
Future
profitability
Conclusion
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C ompetitive Strategy
11/25
Cost leadershipo Low production cost and thin margins
o Profits coming from a high volume
o Large scale of production
o Undifferentiated producto price of which is set according to supply and demand
Core competencyo Highly skilled employees
Efficient operation of plant and equipment- improving production reliabilityand capacity utilisation
Employee dedication- Healthy, safety and security policies
Introduction
Company
Background
E conomic
analysis
Porters 5 forces
Industry analysis
SWOT analysis
C ompetitive
strategy
Corporate
strategy
Sustainability
Industry growth
Company growth
Future
profitability
Conclusion
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C orporate strategy
12/25
Corporate scope To create and deliver outstanding, sustained growth in shareholder wealth by
providing energy for the future.
Woodside continues to focus on improving its foundation business and delivering
long-term growth in shareholder value through commercialising its Australian LNG
portfolio.
Synergyo Management- Woodsides highly skilled employees combine knowledge and
expertise to maximise efficiency under all business units
o Leverage-Vertically and horizontally operations highly
integrated from exploration, mining, extraction,refinement, shipping and production of natural energy.
Resulting in maximised efficiency and integrated
systems throughout whole corporate umbrella
o Cost-Oil refinery and natural gas plants use similar equipment. Eliminating
redundant assets and ability to merge duplicate processes into one.
Introduction
Company
Background
E conomic
analysis
Porters 5 forces
Industry analysis
SWOT analysis
Competitive
strategy
C orporate
strategy
Sustainability
Industry growth
Company growth
Future
profitability
Conclusion
5/13/2018 Business Strategy - slidepdf.com
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Sustainability
13/25
Sustainablecompetitiveadvantage
Price-based
strategy
Maximisedsynergy
Concisecorporate
scope
13/25
Introduction
Company
Background
E conomic
analysis
Porters 5 forces
Industry analysis
SWOT analysis
Competitive
strategy
Corporate
strategy
Sustainability
Industry growth
Company growth
Future
profitability
Conclusion
5/13/2018 Business Strategy - slidepdf.com
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I ndustry growth potential
14/25
Developed countries will tend to opt for LNG as a transitional energy source as
oppose from coal/oil since LNG has more emission advantages and its efficiency
to transport over long distances.
increased at a rate of 7.4 percent per year over the decade from 1995 to 2005
Driven by Asias ever increasing demand of LNG
Recent activity in Japans nuclear dilemma prompted Japan to look at LNG for
sustainable energy
Introduction
Company
Background
E conomic
analysis
Porters 5 forces
Industry analysis
SWOT analysis
Competitive
strategy
Corporate
strategy
Sustainability
Industry growth
Company growth
Future
profitability
Conclusion
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C ompany growth potential
15/25
Horizontal expansiono Project Pluto- Delivery of the foundation Pluto LNG Project will support future
LNG growth opportunities
o Development stages of project Browse and Sunrise. Fueling future LNG
growth
Existing market shareo Eight operating assets in North West shelf of Australia, Three of which are LNG
plants- Woodside aims to maximise the returns from these assets Woodside will
meet its financial obligations and contribute funds to support the companys
growth ambitions
Introduction
Company
Background
E conomic
analysis
Porters 5 forces
Industry analysis
SWOT analysis
Competitive
strategy
Corporate
strategy
Sustainability
Industry growth
C ompany growth
Future
profitability
Conclusion
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F uture profitability
Total energy consumption would only ever increase
Woodside would significantly benefit from the widespread use of LNG globally as
it is one of Australias LNG suppliers. With current total of 3 operating LNG plants
and continuous expansion, Woodside has the capability to meet demand.
As Asia led the way in world economic recovery, Woodside advanced plans for
Pluto expansion, Browse and Sunrise to take advantage of growing energy
demand from the region.
Operating cash flow increased by 41.9% from the previous year (2009) to $2.10
billion, putting Woodside in a strong position to invest in LNG growth strategy.
16/2516/25
Introduction
Company
Background
E conomic
analysis
Porters 5 forces
Industry analysis
SWOT analysis
Competitive
strategy
Corporate
strategy
Sustainability
Industry growth
Company growth
F uture
profitability
Conclusion
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C onclusion
Ever increasing costs in Energy sector
Multiple external factors influence
energy prices
Corporate and Business strategy vital
for company survival
High growth rate for rising LNG energy
Expected profits for Woodside in near
future
1717/25
Introduction
Company
Background
E conomic
analysis
Porters 5 forces
Industry analysis
SWOT analysis
Competitive
strategy
Corporate
strategy
Sustainability
Industry growth
Company growth
Future
profitability
C onclusion
5/13/2018 Business Strategy - slidepdf.com
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End