CNR 2 Essay

Submitted By lukaslvc
Words: 5277
Pages: 22

Executive Summary

The oil and gas industry is vast and challenging with many competitors racing to increase their market share. Crude oil prices determine the success or failure of many companies in this industry. Low oil prices will impose a challenge for the survival of a company because of the need to have low production costs. During times of high crude oil prices, companies have to make the right strategic decisions to grow its market share. Moreover, for decades the oil and gas industry has been one of the most profitable, yet one of the most difficult industries to operate in. Very few companies have been able to succeed by keeping a steady growth rate. Canadian Natural Resources is one of the companies that have been successful in generating solid growth throughout its history. The goal of this essay is to analyze the external factors that influenced the internal strategy of the company through sources like journals, articles, newspapers and the company’s website. In addition, a stakeholders’ analysis was used to evaluate the conflicting interests influencing the company’s strategy. Strategic tools such as PESTEL, Porter’s 5 forces, Boston Matrix, SWOT, among others were used to create the critical analysis.

Table of Contents Page
1. Introduction 4 1.1. Overview of the company 4
2. External Environment 5 2.1. PESTEL Analysis 5
3. Competitive environment (Porter’s 5 forces) 7 3.1. New entrants 8 3.2. Substitutes 8 3.3. Buyers 8 3.4. Suppliers 9 3.5. Rivalry 9 3.6. Summary 10
3.7. Competitors and market 10
4. Portfolio Analysis (BCG) 11
5. Internal Environment 12 5.1. Benchmarking 12 5.2. SWOT 13
6. Stakeholders analysis 14 6.1. Stakeholders pressure 15
7. Conclusion 16
8. Reference list 17
9. Bibliography 20
10. Appendices 21

Figures list
Figure 1 – CNRL Logo 4
Figure 2 – CNRL comparative industry analysis 10
Figure 3 - Areas covered by CNRL 11
Figure 4 – Benchmarking of CNRL 12
Figure 5 – Summary of SWOT 13
Figure 6 – Stakeholders of CNRL 14
Figure 7 – Stakeholders mapping 15

Appendix list
Appendix 1 – CNRL international presence 21
Appendix 2 – CNRL timeline 22
Appendix 3 – PESTEL analysis 23
Appendix 4 – Crude oil prices in the last decade 23
Appendix 5 – Porter’s 5 forces diagram for CNRL 24
Appendix 6 – Cost to produce energy 24
Appendix 7 – Largest consumers of oil in the world 25
Appendix 8 – Expansion of pipelines in the U.S. and Canada 25
Appendix 9 – CNRL has the largest reserve in Canada 26
Appendix 10 – Boston matrix for CNRL 26
Appendix 11 – Free cash flow allocation 27
Appendix 12 – SWOT analysis 27
Appendix 13 – Proved oil reserves by country 28

1. Introduction
The objective of this essay is to critically analyze the internal, competitive and external key strategic drivers of Canadian Natural Resources Limited (CNRL) decisions for the past 5 years, focusing on the impressive track record of CNRL’s cash flow generation. To support the analysis, relevant theory and analysis tools will be used to evaluate the decisions taken by the CNRL Board of Directors. This report will analyze the current stakeholder groups, and explain how they contribute or influence in the decision-making process of the company.
1.1. Overview of the company
Canadian Natural Resources Limited is also known as Canadian Natural, or simply CNRL. CNRL has a diverse range of activities in the oil and gas industry that include exploration, development and production (CNRL.com 2014). These are divided in three segments: heavy crude oil, light crude oil and natural gas, which are very well balanced in the company’s asset portfolio, providing greater…