The wood group was founded in 1912 by Wood and Davison which the company used for marine technology and ship fix house to services the fishing fleet. In 1970 ‘s oil & A ; gas militias were discovered in the North Sea and presented an ideal chance to change over marine technology experience into technology and support services ( 1 ) . During the late 1990s Wood Group Engineering ( North Sea ) became a market leader in the North Sea supplying incorporate technology, operations and care services to BP, Shell, Talisman, Amerada Hess, BG, Enterprise Oil and ChevronTexaco ( 2 ) . The company now is a taking independent services supplier for the oil & A ; gas and power coevals markets. Presently the chief focal point of the company is for the environment by set uping the renewable energy services group and spread outing their operations for alternate energy industry.

Wood group besides known as John wood group is an energy services supplier. The company is organised into to three divisions:

1. Technology and production installations

2. Industrial gas turbines inspection and repair

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3. Production support

The nucleus strengths of wood group are: installation operations & A ; care, field service of pumps, wellsprings and valves clients, procurance & A ; building direction, deepwater topsides, revolving equipments and power solutions, and renewable energy.

The wood group operates chiefly in Europe and North America. It is headquartered in Aberdeen and employs approximately 29,000 worldwide and operating in 50 states ( 3 ) . In 2009 the wood group recorded grosss of $ 4,927.1 million, the runing income of $ 298.5 million and the net net income of $ 164.2 million ( 5 ) .

Wood Group vision is to be a taking planetary energy services supplier ( 4 ) . The company planetary repute has been built upon decennaries by offering a wide scope of incorporate services across the plus lifecycle and successfully pull offing the most complex battles for their clients. They systematically seek to supply services and merchandises that are recognised as market-leading ( 4 ) and effort to transcend their clients ‘ outlooks and present superior returns.Wood group scheme is to accomplish long-run sustainable growing by adding value to their clients ‘ operations with world-leading, extremely differentiated merchandises and services ( 4..

Stamp

PESTLE analysis describes the macro-environmental factors used in the environmental scanning constituents of strategic direction. It can be usage for reexamining a state of affairs, way of a company, a selling proposition, or an thought. The analysis is a utile tool for taking advantage of the chances and cut downing the menaces. It is hard to pull off a concern in an efficient technique if the external administration factors are unknown.

Figure 1: Macro-Economic Environment

Summary of PESTLE:

Political

World energy merchandise markets have been increasing because of the menace of geopolitics instability.

Due to Co2 emanation, authorities has set force per unit area on industry to better and bring forth more sustainable signifier of energy

There are merchandising constabularies with certain states

Restriction to import and export to certain states

Restriction making concern with certain states.

Fines for industry that pollute the environment.

Government revenue enhancements and monetary value controls

Economicss

Alternate high -quality energy engineering increases the company ‘s gross as clients seek for less nursery gas emanations

Companies benefit bring forthing certain merchandises from developing states due to its cheaper labor cost.

Market is unstable as universe economic system is coming out of a universe recession

Global economic systems are expected to turn within few old ages and energy demand will turn once more.

Social/culture

Recently the state has become more concern about the environment and their position has been more encouraging for renewable energy merchandise.

Life anticipation is relevant to the company ‘s labour force. Company benefit in states with higher life anticipation.

Health workplaces for oil and gas industry services are indispensable for long term success.

Technological

Renewable energy engineerings have been increase to cut down the dodo fuels. E.g. Technologies such as air current power, tidal moving ridge, hydroelectricity etc,

Governments are now supplying revenue enhancement advantages and other subsidies to accomplish farther competition for alternate energy against oil and gas.

Tonss of research and development have taken topographic point to advance further renewable energy.

Legal

The policy includes strong new safety criterions for offshore boring including presentations of ability to react to future runawaies.

Heavy punishments for safety misdemeanors.

Carbon revenue enhancements i.e. punishments for fouling the environment at a certain degree.

Legislative steps are used in order to coerce concern into acting in a more environmentally sound mode

Environmental

Due to concern over the hazard of planetary heating, a figure of states have adopted regulative models to cut down nursery gas emanations

High quality engineering been research for better alternate energy public presentation

Industries been utilizing plan to place ways to cut down C by:

pull offing waste more expeditiously, utilizing flying C footmark measurings and researching possible solutions for salvaging energy.

( Description and elaborate information of PESTLE are found in Appendix ( A ) . )

SWOT analysis

SWOT analysis bases for strength, failings, chances, and menaces that involves in a concern venture. Strength and failings is the internal environment where as chance and menaces are the external environment. This involves the house ‘s ability to put aims and place the external and internal environments that are desirable or unwanted to accomplish that aim. The perfect result is to understate the failing and maximize the strengths in order to get the better of the menaces and take advantage of external chances.

Positive

Negative

Internal Environment

Strength:

Wood Group has established its name due to its being for about hundred old ages. Therefore this gives clients security advantages when covering with the administration ( high trade name acknowledgment ) .

Tax advantages have been offered for bring forthing renewable beginning of energy to cut down the state pollution and cut downing fossil fuel.

Wood Group administration is diversified into 50 states shows the company ‘s growing with a strong and experient squad.

Turning operations in the Middle East, Africa and Asia Pacific ( 8 )

Wood Group is a taking independent services supplier for the oil & A ; gas and power coevals markets.

Core strengths of Wood Group are: field service of pumps, deepwater topsides revolving equipments, power solutions, renewable energy and many more.

High quality and accomplishments of its employees

Acquisition of Baker Energy established market leading in the US Gulf of Mexico ; strengthened place in the turning deepwater market and added a farther 500 people in Africa ( 8 ) .

Failing:

World recession, volatile fiscal markets and lower oil and gas monetary values contributed to a decrease in planetary E & A ; P outgo of around 15 % in 2009 ( 8 ) .

Sing client ‘s spheres, they are still deficient for full optimum cognition.

The merchandise monetary values are excessively high.

External Environment

Opportunity:

Wood group has been able to run in states such as Iraq which was antecedently excessively hazardous.

Governments provide chance for high quality engineering research for improved alternate energy public presentation.

Industries been utilizing plan to place ways to cut down C by:

pull offing waste more expeditiously, utilizing flying C footmark measurings and researching possible solutions for salvaging energy.

Increasing demand from clients for sustainable technological

Turning demand for environment betterment, mobility solution, energy direction and control.

Menace:

Weather can hold important consequence on the production such in air current turbine.

Heavy punishments for safety misdemeanors.

Punishments for fouling the environment at a certain degree.

Technology progresss from other energy services supplier

Competition from international providers

5 forces analysis

5 forces of theoretical account analysis is normally used tool for competitory environment and its attraction of a market.

Figure 2- 5 forces of analysis ( 12 ) :

Barriers to Entry ( High )

This force describes the degree of entry of other companies to come in this type of industry. If the entry of the company is high the company would lose it profitableness. Barrier to entry to these type of industry are high due to:

Large entree to the providers and distributers guaranting widespread energy proviso.

High engineering cost

Dominated by major participants

Mature market

Rigorous authorities policy and environment ordinance demands to run in oil and gas services industry.

High capital cost is required to carry through cost leading which is indispensable in energy proviso.

Set-up operations are expensive

The ethical trade name individuality is of import due to the nature of market ( trueness as a barrier ) .

Existing participants have close client dealingss.e.g. from a long-run service contacts.

Technological focal point for alternate energy requires high proprietary learn curve.

Competitive Rivalry – ( medium )

This force describes the strength of competition between bing companies ( 6 ) . Within the oil & A ; gas and energy services provider the competition competition between bing participants are average because of:

High issue barriers.

Not many major participants in this type of industry.

High capital costs

Companies with similar schemes

High industry growing as alternate energy is indispensable for the long term hereafter of the concern.

Assorted challengers in principle for schemes to put and come in the industry.

High shift cost

Menace of replacement – ( low )

Menace of replacement exists if there are alternate merchandises with lower monetary values of better public presentation parametric quantities for the same intent. This would cut down the demand for a peculiar merchandise and hence would be a menace of consumers exchanging to options.

Menace of replacement is low because deficiency of alternate renewable energy and merely big industry can afford the renewable energy merchandises.

Menace of replacement would be high if a company provides the latest engineering and specialised services.

Dickering power of purchasers – ( low )

Dickering power of clients find how much clients can enforce force per unit area on borders and volumes. The purchasers for energy service industry Hunt for first-class quality merchandise but with lower monetary values and for a better contract term. Bargaining of power for these industries is low because:

The trade name trueness is high

Handiness of replacements is low

Buyer inducements is high in footings of energy supplier buy-backs and revenue enhancement interruptions

Buyers volume are low

Low bargaining force of purchasers

Depends service criterions

Low snap

Switch overing to alternate merchandise is hard

Dickering power of providers – ( high )

Bargaining of provider is the input required in order to supply the goods. The dickering power of providers is high because:

The market is dominated by few big providers

The shift cost are high

There is non much replacement for supplying field service of pumps, wellsprings, revolving equipments, power solutions, renewable energy etc.

The energy services are largely dominated by major companies. For these industries big sum of capital investing required significantly to cut down the figure of companies and increase the power of bing participants in the industry.

The providers in UK are threatened by big companies able to beginning their merchandise abroad at cheaper trades.

( Description and elaborate information of five force analysis are found in Appendix ( B ) )

Appendix ( A ) -PESTLE

Political

For doing energy resources, the oil and gas services industry must follow both the local and federal authorities ordinances. There are possible countenances and mulcts which could be set by assorted authoritiess.

Wood group runing in a globalized environment with industries around the Earth ( operates in 50 states globally in continents such as Australia, Europe, Middle East and the U.S. ) . Since it is runing in assorted states, its public presentation is greatly influenced by the legislative and political conditions of these states.

Their operations can adversely impact by political or ordinance developments are:

Access restrictions – Assorted states have limitation for export and import for certain merchandises. Besides legion states limit entree to their oil and gas resources.

Fines – There could be possible countenances and fined by the authoritiess if they do n’t follow their legal process. Government wants to do certain their merchandise is environmentally friendly.

Restrictions on making concern -A As a British company, Wood Group is capable to Torahs forbiding British industry from making concern with peculiar states. Wood Group concern has been strained with states like Iran as they have been sanctioned.

Regulatory -A Even in states with strong legal systems where Wood Group does concern, they remain open to alterations in jurisprudence that could adversely impact their consequences, such as authorities royalty rates or additions in revenue enhancements ; monetary value controls ; or other Torahs that increase their cost of conformity.

Economicss

Economic factors are of concern to wood group, because they are likely to act upon monetary values, demand, costs, and net incomes. One of the most important factors on the economic system is the planetary oil market monetary values that are chiefly influenced by demand and supply forces. Price force per unit area increases if there is supply deficit. This may be due to factors such as ( 7 ) :

Unplanned refinery deficit

Unexpected demand additions

Grapevine jobs

Company ‘s gross will increase if they provide good quality beginnings of alternate energy as authorities seeks environmentally free energy beginning. Market is unstable as universe economic system is coming out of a universe recession and lower oil and gas monetary values contributed to a decrease in planetary E & A ; P outgo of around 15 % in 2009 ( 8 ) . However planetary economic systems are expected to turn within few old ages clip and energy demand will turn once more.

Social/cultural

The company involves in many states where population age, wellness and attitude vary. By placing differences and similarities in civilization to derive a better apprehension of the civilization issues related to the industry. Recently the state had become more concern about the environment and their position has been more encouraging for renewable energy merchandise.

Health and safety are one of the chief ends of Wood Group ‘s concern rules. Achieving and keeping high criterions of public presentation in wellness and safety involves an built-in function in the sustainability of their long-run repute and success. As wellness is portion of wood group ‘s vision, their end is to better the quality of occupational wellness direction by ( 9 ) :

Keeping a healthy workplace

Controling more efficaciously the wellness hazards originating from their activities

Promoting the benefit of healthy life styles for their employees via runs and wellness carnivals

Life anticipation is relevant to the company ‘s labour force. In developed states their life anticipation are high and hence the work force labor would be greater comparison to the developing states.

Technological

Renewable energy engineerings have been increase to cut down the dodo fuels. Governments are now supplying revenue enhancement advantages and other subsidies to accomplish farther competition for alternate energy against oil and gas. They besides promote research for new engineerings to increase alternate energy beginnings and cut down the cost. Wood Group delivers solutions to maximise the handiness of wave energy systems, air current turbines, and other renewable energy undertakings. Wood Group is spread outing its range into the renewable energy industry and offers a dynamic set of specialised proficient consultancy services to run into the demands of their planetary clients.

Wood Group is the universe ‘s prima solution-independent technology and direction services supplier for subsea developments and grapevines ( 10 ) . Their repute is built upon strong proficient excellence and efficient undertaking bringing ( 10 ) . Wood group are engineering leaders in legion countries such as cryogenic grapevines, remote feeling, grapevine stabilization and flow confidence.

Legal

Mixtures of authorities policies and statute laws have a direct impact on the public presentation of Wood Group. National authoritiess are concern with the environmental issues so hence legislative steps are used in order to coerce concern into acting in a more environmentally sound mode. The policy includes strong new safety criterions for offshore boring including presentations of ability to react to future runawaies and heavy punishments for safety misdemeanors.

Environmental

Due to concern over the hazard of planetary heating, a figure of states have adopted regulative models to cut down nursery gas emanations. These include C revenue enhancements, addition efficiency criterions and inducements for renewable energy. These demands could do Wood Group cut down the demand for hydrocarbons and their merchandises become more expensive.

Wood group has attempted to understate inauspicious environmental impacts for their operations. In 2009, they introduced a C footmark pilot programme to assist a better apprehension of C direction and place ways to cut down C usage throughout their operations ( 11 ) . The plan includes pull offing waste more expeditiously, flying C footmark measurings and research possible solutions for salvaging energy.

APPENDIX B – 5 forces

Barrier to entry ( high )

There are many oil & A ; gas industry services companies in the universe, but barriers to come in to these types are plenty to forestall the serious companies. Barriers to entry are high due to the high capital cost, important regulative environment and being of scale economic systems are required to run within the industry.

Recently an oil and gas service industry is turning at a really strong rate which is attractive to new entrants as alternate energy is indispensable at this clip of the universe. However due to present economic trouble has contributed a big diminution in attraction in these industries which deterrent the possible entrants. To keep with the taking participants in the industry strong research and development capableness is required.

hypertext transfer protocol: //energybusinessdaily.com/power/barriers-of-entry-into-the-energy-industry/

Competitive Rivalry – ( medium )

Analyzing an energy company it is truly of import to look at the peculiar part in which the company operating. The clients can take their merchandise by companies ‘ services criterion and velocity of bringing of their merchandise. Technology can alter the nature and the footing of competition among bing rivals in several ways. It can dramatically modify the cost construction and hence affect pricing determinations. The function of engineering in merchandise distinction and shift costs are besides of import in competition. Another possible impact of engineering on competition is through its consequence on issue barriers.

Wood group competitions are Aker Solutions, AMEC, KBR, Technip, Worley Parsons, and Baker Hughes. Wood Group is the prima oil and gas services in the North Sea. ( ref ) . Wood Group planetary repute has been built by successfully pull offing the most complex battles for their clients, offering a broad scope of incorporate services across the plus life has perceptibly increased the profitableness of Wood Group concern.

hypertext transfer protocol: //www.woodgroup.com/about-us/doing-business-with-us/pages/default.aspx

Menace of replacement – ( low )

The menace of replacements for energy services are low as they are by and large gas, air current power, solar power, coal and hydroelectricity. Therefore they are non much replacement for renewable energy and merely large company can hold those merchandises due to a really high capital cost. The menaces of replacement of these types companies are normally with those who offer better engineering and specialised services such as directional boring. ( hypertext transfer protocol: //www.investopedia.com/features/industryhandbook/oil_services.asp )

Dickering power of purchasers – ( low )

The bargaining power of purchasers for Wood Group has increased by developing strong relationships by supplying dependable undertaking bringing and cost-efficient. Their success in these countries is established by the go oning relationships with the integrated operators, national oil companies, independent operators and power companies throughout the universe.

hypertext transfer protocol: //www.woodgroup.com/about-us/doing-business-with-us/pages/default.aspx

Dickering power of providers – ( high )

The energy services are largely dominated by major companies. For these types of industries big sum of capital investing required significantly to cut down the figure of companies and increase the power of bing participants in the industry. The oil and gas services providers in UK are threatened by big companies able to beginning their merchandise abroad at cheaper trades.

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