Identification of challenges
Saudi Aramco has been a company offering the services of oil and gas in the country and internationally. It has been observed that the company has been trying to enter into the market of India, which is a tedious task if individuals within the firm failed to identify the primary aspects of challenges that will be faced by the company (Dummett, Said and Farrell 2017). This paper provided information about the challenges that can be faced by the organisation in the Indian market concerning competitive advantage. Identification of such aspects is critical because it would provide the opportunity to have economic growth and the company would attain the benefit in the new market by providing better and effective products.
Time and again the company has gained momentum in ensuring massive energy supply such that the organisation in ends up attaining higher competitive advantage. It has been thriving in the Saudi Arabia market, identifying the challenges it can face (Ramady and Mahdi 2017). This section will similarly identify challenges that the company will be facing concerning the international market, specifically in Indian downstream petroleum:
- To have increased visibility in complicated operations concerning cost and to have optimised performance of workforce within the organisation.
The operation of oil and gas company, Saudi Aramco, has been done in some of the most politically and physically challenging environment in Saudi Arabia. The factors that can be added to have announced difficulties include fluctuating demand, unstable market, high competition, regulatory regimes, and complex compliance. Certain projects might also involve more than one third-party suppliers that can also create problems in the Indian market. Such factors can promote the problems of having a challengeable environment to control operations and cost in the country. Furthermore, the workforce can also create problems due to wearing background and skill levels, even education. Such factors provide information about the complexity of operation in the country. Since the Indian market has many companies providing effective services to the customers, the company Saudi Aramco can have problems related to gaining loyal customers and the provision of affordable prices. Furthermore, the environment of the Indian industry is also different than Saudi Arabia that can create a problem for the company concerning the production of oil and gas in India (Albejaidi 2010).
- Development of high performing culture among the employees managing operations
This factory certainly the most important that can lead the company to the downfall. This is why employee training, retention, and onboarding has become a critical issue in the company concerning the international market. Since India is counted among the emerging markets, along with China, it has increased the competitive companies to also find opportunity in India. At this time, the management of employees from different cultural backgrounds is critical for the company. It means that the primary focus is to be given to the employee performance and creation of an effective culture within the firm after penetration in the Indian market (Al-Tammar et al. 2014).
- The challenge of execution excellence and improved asset management
Other than the employees, the most important factor in the country concerning operation management includes equipment. The quality of equipment in both the countries that is Saudi Arabia and India are critically different which can cause problems for the country in different and payment. Therefore the demand for effective equipment including well-designed managed and maintained assets is critical for the management of operations in the country. Therefore the procedure of maintenance, process, inspection, operation, management concepts, and design a critical for the organisation in the country. Even though the two countries may have a difference in operations, the challenges to maintaining the same level of integrity and operational management in India as the company has been able to do in Saudi Arabia (Kokal and Al-Kaabi 2010).
- The challenge of corporate social responsibility
Services of the competitors
In this section, various factors are involved such as the stakeholder group’s safety concerns and health. The challenges can be observed in the area of human rights, stakeholder rights, environment protection, transparency and corporate issues, and employee rights. Such aspects can be observed in Indian market concerning operations of Saudi Aramco (Ramady 2010).
The Indian market has about 21 refineries and it is called the second largest refiner in entire Asia. India’s ministry of petroleum and gas has provided information about the production of oil in India, which had been about 37.7 million tonnes of crude oil. The statistics were recorded back in 2013 that increased by 91 million barrels in 2017 (Olofsson et al. 2018). Oil and gas industry in India can be divided into two major sectors that are upstream and downstream. The competitors of Saudi Aramco in India are able to provide high-quality facilities to the consumers including gasoline, diesel, fuel oil, naphtha, and aviation turbine fuel. Such aspects are even exported from India to other countries, which can create a major problem in Saudi Aramco (Dhiman and Mohanty 2010).
One of the biggest competitors of the company is Reliance industry that owns the largest running hub located in Gujarat. Moreover, the company is also partnered with British petroleum to provide and expand the facilities of the upstream sector and spread its wings in the international market. However, the major facility offered by the company in the downstream Satya includes refining process of natural gas and crude oil. Many refined products have been offered to consumers both internationally and in India. The Indian companies are able to offer and promote oil and gas facilities to the customers easily by having appropriate production and management system (Gautam and Singh 2010).
However, the competitors also face operational and logistic challenges related to design and delivery services. Following aspects will provide information about the four important challenges faced by the companies in the downstream sector.
- Safety gadgets and equipment related to designing and delivery of the product.
In this section, the organisations in India face problems related to equipment and safety gadgets concerning high-quality material. Several competitors are observed to have problems due to the high cost of equipment and provision of affordable services in the end. The companies that have been especially involved in the utilisation of safety gadgets and equipment offered by international companies face more problems concerning the supply of equipment. Certainly, if the supply has more cost as compared to others, the companies wouldn’t be able to provide products at affordable prices. Such aspects have been the primary reason for the increment of petroleum and diesel prices in India (Garg 2012).
- Less experienced employees
This factor is certainly the most important concerning the design and delivery of the product. If the employees are less experience about designing process, it means refining of the crude oil, the competitors of Saudi Aramco can face problems of fewer quality products and services. Due to that, the organisations can face problems concerning the production rate. It means the oil and gas facilities can be degraded in the companies can face a major loss in the industry in the international market. If the less experienced employees are involved in the designing and delivery of the oil and gas services, the production rate can also decrease along with the quality of the outcome (Kumar et al. 2010).
- Inspection of the product during delivery
The facility of inspection should be an integral part of the organisations. Inspection facility, even though the temporary, is critical because it provides confirmation of high-quality outcome to the company. It is included after that designing, which is a refining of the crude oil. For the delivery of the oil and gas to the customers or clients, the organisation is supposed to inspect the particular product or service using software or systems. This is the most important challenge for the competitors of Saudi Aramco (Frynas 2010).
- Spill control challenge
This is also known as the major problems and challenges in the Indian companies dealing in an international platform. While transporting the oil and gas in other countries, the companies between the problems of leaks and spills that can also lead to devastating events. Such problems need immediate attention of the companies before the delivery. The problem of leak and gas has been the primary concern for most of the competitors concerning international market (Harsem, Eide and Heen 2011).
One of the biggest competitors of Saudi Aramco has been Indian oil with revenue of $63 billion on a yearly basis. it has been dealing with downstream sectors concerning refinery and marketing of the product. Many professionals have recognised it as the primary reason behind effective customer service in the petroleum, gas, and oil business. The privately owned company has been situated in New Delhi (El-Diasty and Ragab 2013). On the other hand, Saudi Aramco has been able to collect about $339 billion in the present working year, with the total workforce of 70000 individuals.
Company supply chain management is handled effectively to have economic development of the country. Due to this, the supply chain performance has become critical for Indian Oil. The primary objective of the company is the provision of effective petroleum in Indian industry and market. For that the utilisation of effective supply chain management system is critical. For higher economic growth, the company initiated the purchase of crude oil from the suppliers. It is thereafter transported using tanker or trucks to ensure that the crude is stored appropriately. It is later sent to the refining section of the company. The refined product is well transported using the road, rail, and tanker. The product is then stored in the terminal or ports which is further sold in the retailing companies or customers directly. The primary stages of supply chain economic development and walls exploration, production, refining, marketing, and customer. By using search procedures the organisation has been able to reduce 70% of the overall supply and production cost (Cheon, Lackner and Urpelainen 2015).
Having dealt with the downstream supply chain management system, the primary procedure within the company includes refinery and processing. The supply chain strategy is involved in feeding stocks to purchase, processing, production, and transport. Scheduling is also a critical part of the supply chain management system in the company. Furthermore, more than half of the Indian petroleum products come from the company Indian Oil, having about 35% National refining capacity (Ahmed et al. 2016).
The procedure of the Oil and Gas industry, Indian Oil, can have a potential impact on the environment. The primary aspect of impact has been observed on cultural, humans and socio-economic aspects. The production operation of the company has induced social, economic, and cultural challenges. The traditional lifestyle of the local groups in India has been affected concerning land use patterns such as hunting, logging, fishing, and agriculture. In certain cases, the organisation has to find new access roads that often lead to the exploitation of available natural resources (Bhattacharyya 2010)
Other than that, the company operations are observed to have the increment of atmospheric impacts due to the exploration and operation of the industry on the country. Certainly, processes such as combustion, venting, and flaring have caused the organisation to face problems of carbon dioxide emissions, which further enhance global warming. Furthermore, other operations such as cutting, drilling fluids, treatment of chemical plants, drainage water, domestic wastes, spills and leakage, and other factors have created more environmental problems in India. Such factors are likely to affect the company Saudi Aramco in the Indian market (Pudukudy et al. 2014).
Employees are supposed to be given all expected training and facilities so that they can have ultimate satisfaction of the employment and produce effective outcomes. For that, the company employees are meant to be supported and given all support. The primary issue that will be observed in India concerning the expansion of Saudi Aramco, involves the cultural diversion of the company individuals (Khan 2010). Such aspects can create behavioral differences among the people working in the company in India. For instance, a particular group of individuals it was belonging to Saudi Arabian background can have difficulty in having it isn’t a conversation with Indian individuals because of the differences in accent (Tietenberg and Lewis 2016).
Other than that the employees can face problems due to the expansion of the company in a different background. It has been observed that when the companies have been trying to incorporate a change, the employees start to resist in the initial stages. Such factors observed because of having less knowledge about the particular change. In this case, the change has been an expansion of the company in a different environment. It would certainly increase the problems and resistance factor within the employees belonging to Saudi Arabian country (Patrick and Kumar 2012).
Main issues are been observed in this sector that can be easily solved by the efforts of a company striving to make changes among the employees and the operations in the new background. The primary issue that was observed include the challenges recording operation and performance issue of the workforce and cost problems. Furthermore, a similar issue was observed related to the culture of the company and the operational management of employees. In such cases, the organisation can ensure that appropriate strategies are made to overcome the performance issue come up costing problems, and different cultural background of employees. Other than that, safety gadgets, untrained employees inspection problem, spill control challenge, supply chain management, and environmental problems can be easily solved by comparing the system of other competitors like Bharat petroleum or Indian Oil. Appropriate strategies can be made by using the costing and other operating system used by these companies having attained higher economic growth. These competitors can become an example for Saudi Aramco that can enhance the economic growth of the company (Sharma and Kiran 2012).
Conclusion
It has been observed that Saudi Aramco needs the ability to perform effectively by keen observation of the competitors in India. The company can penetrate the Indian market focusing on the main strategies and challenges that can be affected firm has large. At this time, it has been observed that the company can initiate strategies to identify main challenges and observe the processes or solutions utilised by competitors in India. Such efforts would surely ensure her growth of the company. This paper provided information about the challenges that can be faced by the organisation in the Indian market concerning competitive advantage. Identification of such aspects is critical because it would provide the opportunity to have economic growth and the company would attain the benefit in the new market by providing better and effective products.
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