Caltex
The resources which an organization utilizes within its framework to a great extent determine the quality of the services or the products offered by them to the customers or the job productivity of the employees (Zuzul and Helfat 2016). Recent industry reports and also researches suggest that the prospects of an organization depend greatly on the kind of resources which are available to its employees for the performance of their job roles (Helfat and Campo-Rembado 2016). In this regard, the “Resource Based view theory” has become important for the organizations. Effective utilization of this theory provides various kinds of benefits to the various organizations like the attainment of sustainability, competitive advantage, opportunity to provide a wide range of products or services to the customers and others (Helfat and Peteraf 2003). It is pertinent to note that some of the organizations taking the help of this theory had changed the focus of their organization from one industry to another. The company Caltex is an important one in this regard since it was seen that the company initially used to offer petroleum related products to the customers however through the use of the “Resource Based view theory” the company has shifted its focus to the “convenience retail sector” in Australia (Caltex 2018). The report will discuss about the about the organization Caltex, the reasons for the change in the mission of the organization and its switching over to the retail industry on the basis of the “Resource Based view theory”.
The organization Caltex, established in the year 1936, has undergone a substantial amount of metamorphosis not only in the process of business used by them but also as regards the nature of the products or the services that they offer to the customers (Caltex 2018). For example, Caltex started its journey as California Texas Oil Company in USA. It was formed through the merger of the two organizations “Texas Company (later named Texaco) and Standard Oil of California” (Caltex 2018). These two organizations used to import petroleum and its related products from Saudi Arabia and in turn sell it to the people of USA (Caltex 2018). However, soon the name of the organization was changed from Caltex to “Chevron Corporation” (Caltex 2018). Caltex in the recent times has been able to attain a substantial amount of success not only in terms of profitability but also in terms of market growth as well. For example, it is seen that currently the organization is operational in more than 60 different nations including Australia (Caltex 2018). Caltex initially entered into the business market of Australia with the business name of Caltex Petroleum Australia Pty. Ltd and by 2015 was able to hold more than 50% of the petroleum business market share of Australia (Caltex 2018). However, the company realizing that it had better growth options in the retail sector it switched the industry and shifted to the retail sector. Caltex is currently operates in collaboration with Woolworths Limited in Australia under the business name of Caltex Foodary and offers coffee, snacks and other kinds of food items to the customers (Caltex 2018). Furthermore, Caltex makes the most of the technology of internet and not only allows the customers to order food through their online app but also provides the opportunity to the motorists and other busy travelers to pay for the food while on-the go through their online app. The effective utilization of its resources as well as capabilities is perhaps one of the major reasons which had contributed significantly towards the success attained by the company in Australia.
Change in the mission of Caltex since arriving in Australia
The change in the mission of the organization Caltex in Australia has important connotations especially in the light of the fact that in the year 2015 the organization held more than 50% of the market share in the petroleum business market of Australia. An article of Franchisebusiness.com.au (2018) the organization suggests that “The whole concept of The Foodary was driven by our customers. They told us they want fresh, easy food and coffee on-the-go. The Foodary still has traditional food like the humble sausage roll, but it’s about giving customers choice” (Caltex 2018). Caltex during the course of its business operations realized the fact that it was more profitability to offer food items, coffee and other kinds of snacks to the people who opt for gas, petroleum and other related products from them. One of the major problems faced by the various road travelers is the fact that they are not being to get quality food items, coffee and other basic amenities in Australia. Caltex which offers petroleum and other related products to the customers in more than 60 different nations of the world has been used to hearing this complaint of the customers in the diverse nations of the world (Caltex 2018). Thus, the decision to switch from the petroleum industry to the food and the retail can be seen as a move on the part of the organization to capitalize in an effective on this particular demand or the requirement of the travelers.
This transition of the company when analyzed through the lens of “Resource Based view theory” would reveal insightful details. The initial idea of this theory appeared in the article of Barney “Firm Resources and Sustained Competitive Advantage” (1996) and it discusses about the way in which organizations need to utilize its internal resources, capabilities and assets in order to attain a sustainable competitive advantage within the industry they are operating in (Kim, Song and Triche 2015). In addition to this, the concept of capability lifecycle (CLC) has also become an important one for the organizations along with resource-based theory in the context of contemporary business world (Amit and Han 2017). Effective utilization of these two concepts not only offers the opportunity to effectively utilize the resources and the capabilities of their organization but also to adapt them as per the demands of the customers or the changing trends of the business world (Hitt, Xu and Carnes 2016).
Analysis using Resource Based view theory
The change undertaken by Caltex can be justified on the basis of the resource theory and capability lifecycle. As per the capability lifecycle there are three major steps in the lifecycle of the dynamic capabilities of an organization, namely, growth, maturity and decline (Volberda and Karali 2015). The food and retail services offered by Caltex can be said to be in the initial growth stages of its foundation. The formulation of these services was dictated by the need to reconfigure the capabilities of the organization. For example, Caltex realized the fact that it needs to reconfigure its capabilities in order to take effective advantage of the changing business trend. The emergence of the numerous competitors within the same industry also facilitated the change.
The 6R’s of the above figure have dictated the change in the mission of the organization to a great extent. As per the above figure, Caltex is currently taking the help of the process of renewal, redeployment and recombination for the process of their business (Salunke, Weerawardena and McColl-Kennedy 2018). This becomes apparent when the services offered by them to the customers in the nation of Australia are taken into effective consideration. For example, Caltex earlier used to offer just petroleum and gas products to customers however recently realizing the inherent potential and also the business opportunities offered by the food and the retail they have renewed, redeployed and also recombined the services that they used to provide and reconfigure them into the present ones. However, this change also required Caltex to undertake a development of their inner dynamic competencies as well. The inner dynamic competencies of the company Caltex earlier were focused on fulfilling the petroleum and gas related demands of the customers however presently their need to adopt the inner dynamic capabilities which are required to excel in the food and retail as well within their organization for its operation in Australia (Helfat and Campo-Rembado 2016). This also required Caltex to change the resource utilization of their organization in a substantial manner as well so as to provide the employees with the necessary tools which would help them to cope up with this change (Swarr et al. 2015).
Convenience Retail Sector has emerged as one of the major industries of the world in the recent times and it was designed solely on the basis of the results derived from an effective analysis of the needs of the customers. Furthermore, it is seen that out of the total £170bn that the retail industry of the world generates on yearly basis more than £37.5bn is contributed by these convenience retail stores (Caltex 2018). Thus, it can be said that the convenience retail sector is not only the emerging trend within the retail industry but at the same time is making a significant contribution to the same (Zahra, Larraneta and Galán 2015). This is one of the major factors which had encouraged the company Caltex to make the transition from the petroleum industry to the convenience retail sector. Moreover, the other added advantages that the industry provides like the opportunity for business expansion, higher profitability, larger customer base, capitalizing on the demands of the customers and others have at the same time facilitated the much needed change. In addition to these, the opportunity to form collaborations with some of the largest brands of Australia like Woolworths Limited, Boost Juice, Guzman Y Gomez, Sumo Salad and others is another factor which has made the convenience retail sector an appealing one for the organization (Caltex 2018). More importantly, the transition also afforded the opportunity to the organization to effectively utilize its resources and capabilities. For example, Caltex earlier also used to offer online app based services to its customers however it was not much appreciated. Currently, it is seen that the customers are happy to use the online app of the organization to not only order food but also to pay it as well (Caltex 2018). Thus, it can be said that the opportunity to effectively utilize the resources as well as the capabilities of one’s organization is another important factor which has made the convenience retail sector an appealing one for Caltex.
Conclusion
Conclusion
To conclude, the success or the failure of an organization depends to a large extent on the manner in which the concerned organization utilizes its capabilities and also resources. Furthermore, the business performance of the organization at the same time depends on the effectiveness with which not only the organization but also the employees are being to utilize its own capabilities and resources. Modern theories of resource utilization like resource based view theory and others becomes important in this regard since they provide an overview of the manner in which the organizations can effectively utilize their key capabilities and also resources. The case of Caltex becomes an important one in this regard since the change in the mission of the organization clearly indicates the manner in which the resources and also the capabilities of an organization can be utilized in an effective manner.
References
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