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Letter of Authorization Letter of Transmittal Letter of Acknowledgement Company Introduction Company Profile Short History PSO Organizational Structure Chart Company Object Future Outlook Quality Policy Customer Care Company Vision Company Mission Statement Core Value of PSO Management Profile Departments PSO Sales Division Financial High Lights 2007 Competitor Profile SWOT of PSO Matching strategies Strategic Position and evaluation matrix Power Project (PSO Role in the Power Sector Company Balance Sheet Company Profit Loss Cash Flow Statement Corporate Profile Our Plans in 2007-08 Bibliography Appendix
Letter of Authorization
You are instructed to do term report on Analysis Stratrgic Managment and submit a report on the same as part of your curriculum by May 03, 2009. The report must contain all the necessary requirements of the report writing as taught in the lectures. Your summary must contain all the information on the topic, which must appeal the readers. You can consult the books referred by me and other sources like magazines, Internet and of course you can also find about this topic from any advertising agency of repute. There are lots of advertising agencies working in this area that can provide you the correct information in this regard. Your report must have all the parts including prefatory parts, body, findings and addenda. You have to submit the report on or before the due date in order that your report must be analyzed and graded. You must develop interest in the report so that the information provided by you must attract readers. Nowadays advertising and print media are very important for business; in fact business cannot go along smoothly without taking on account of this important aspect. Advertising is promotion and boosting of any company so without presence of advertising nobody will be aware of any company. You are advised to put you utmost in this report and produce a professional report. You can get any sort of help from me on behalf of this topic and developing of report.
Letter of Transmittal
MR: Faculty Business Administration
Subject:
Respected Sir: You are informed here by Group of Sabiha and Sonia that we have completed our report as per your instructions. During the research work we met different Finance department employees of PSO organization from whom we gathered lot of information. They have plenty of experience behind them in lieu of Strategic Management. You will find this report very informative as we have done analysis for this topic from resources like direct interviews, magazines, journals and Internet. The rest of the information about resources is provided in the bibliography and appendix section. Your guidance really helped us to work out on this report. Your feedback will enhance further our capabilities and reduce the missing areas in the report.
Company Introduction
The history of Pakistan State Oil starts from mid-70s when the Government of Pakistan amalgamated three OMCs: Esso Eastern, Pakistan National Oil (PNO) and Dawood Petroleum as part of its reorganization plan. It is considered as one of the most successful mergers in the history of Pakistan. The main objective of the Nationalization of POL Giant was backed by the facilitation of the sensitive national issue of providing fuel to Defense forces. Because, during the war of 1971, the nation suffered from the problem that no fuel company was interested to provide fuel to the Armed forces at that and the sensitivity of the nation was in very crucial condition. The than Federal government decided to nationalize three petroleum companies along with management control. The company is the only public sector entity in Pakistan that has been competing effectively with three multinationals companies which are supported technically by their parent organization.
COMPANY PROFILE
Pakistan State Oil (PSO) is the oil market leader in Pakistan enjoying over 79% share of Black Oil market and 58% share of White Oil market. It is engaged in import, storage, distribution and marketing of various POL products, including Mogas, HSD, Fuel Oil, Jet Fuel, Kerosene, LPG, CNG and petro-chemicals. This blue chip company, the winner of "Karachi Stock Exchange Top Companies Award" and a member of World Economic Forum, has been a popular topic of case studies in Pakistan and abroad based on its radical corporate turnaround over the last few years. Excellence in Customer Service PSO serves a wide range of customers throughout Pakistan, including retail, industrial, aviation, marine and government/defence sectors. Professionals at PSO strive for providing unmatched and diverse services to the customers in line with best international practices. PSO's state-of-the-art New Vision retail outlets are equipped with the most modern facilities, including auto car wash, electronic dispensing units, convenience stores, business centres, internet facilities and Easy
01-01-1974
Federal Government takes over management of PNO (Pakistan National Oil) and DPL (Dawood Petroleum Limited), renamed into POCL (Premier Oil Company Limited) under marketing of Petroleum Products (Federal Control) Act, 1974.
03-06-1974
23-08-1976
15-09-1976
Government purchases ESSO Undertakings, vests their control in SOCL. (State Oil Company Limited) and names it as Pakistan State Oil Company Limited (PSO).
MANAGING DIRECTOR
INTERNAL AUDIT
MDS SECRETARIAT
DIVISION
PURIFICA TION
KARACHI
SALES
ACCOU NTS
TRANSMISSION
KARACHI )
SINDH (EXCL
CONST RUCTIO N
BILLIN G
BUDGE T
COMPRESSION
BALOC HISTAN
SERVIC-ES
TREA SURY
MANAGE MENT
LEGAL SERVIC ES
INFORMATION TECHNOLOGY
We believe that excellence in our core activities emerges from a passion for satisfying our customers' needs in terms of total quality management. Our foremost goal is to retain our corporate leadership.
2.
Cohesiveness
We endeavor to achieve higher collective and individual goals through team. This is inculcated in the organization through effective communication.
3.
Respect
We are an Equal Opportunity Employer attracting and recruiting the finest people from around the country. We value contribution of individuals and teams. Individual contributions are recognized through our reward and recognition program.
4.
Integrity
We uphold our values and Business Ethics principles in every action and decision. Professional and personal honesty, dedication and commitment are the landmarks of our success. Open and transparent business practices are based on ethical values and respect for employees, communities and the environment.
5.
Innovation
We are committed to continuous improvement, both in New Product and Processes as well as those existing already. We encourage Creative Ideas from all stakeholders.
6.
Corporate Responsibility
We promote Health, Safety and Environment culture both internally and externally. We emphasize on Community Development and aspire to make society a better place to live in.
QUALITY POLICY:
Pso will Continuously Endeavor to Better Satisfy the Needs of Customers and Stakeholders and will Promote Innovation, Creativity and Pursuit of Excellence by Employees for Providing Quality Service in all Areas of Company Operations.
CUSTOMER CARE:
We're committed to providing you with a high level of service that you might not expect from your local utility. From our meter readers and service crews to our customer service representatives, all of us are committed to providing you with the highest possible standard of customer service.
Vision Statement
To excel in delivering value to customers as an innovative and dynamic energy company that gets to the future first.
Mission Statement
We are committed to leadership in energy market through competitive advantage in providing the highest quality petroleum products and services to our customers, based on: Market leader providing the highest quality petroleum products and services to its customers
Professionally trained, high quality, motivated workforce, working as a team in an environment, which recognizes and rewards performance, innovation and creativity, and provides for personal growth and development
Lowest cost operations and assured access to long-term and cost effective supply sources
The Retail Construction department has been responsible for the development of New Vision Retail and Consumer Outlets throughout Pakistan since the inception of the New Vision Programme in 1999. During the past 5 years PSO completed a total number of over 1000 NVRO's and another 200 outlets will be developed during the current fiscal year. Outlets are constructed on fast track basis with some outlets completing within 30 days. One outlet was completed in 15 days - an industry record in Pakistan.
2.
Retail Facilities
Retail facilities department has always played a vital role in promoting company image through better up keep of retail outlets- especially New Vision Retail Outlets (NVRO's) and made significant contributions in companies strive to gain market share by means of reduced forecourt downtime.
Technical Support
PSO is in technical & commercial collaboration with Air Total International, Paris, one of the largest oil companies of the world. Every year PSO is sending 3 employees to France for Aviation training, which keeps them abreast with the technological development in the industry
We are proud to serve both national & international air carriers like Aero Asia, Aeroflot, Air France, Air China, Defence Aviation Wings, Emirates Airlines, Gulf Airways, Iran Air, Kuwait Airways, Pakistan International Airlines, Qatar Airways, Saudi Arabian Airlines, Shaheen Air International, Singapore Airlines, Swiss Air, Thai Airways and many other small carriers/charters etc. In addition to contractual customers, we also accept carnet of Air Total International, Air BP, WFS, UV Air, AVCARD. Aviation Department is proud that Our quality service has given us a market share of approx. 70% volume in the aviation industry of Pakistan.
We are in the process of getting ISO-9001/2000 certification for Islamabad, Lahore, Peshawar, Multan & Faisalabad Airports by 1st quarter of 2004.
Products
There are 3 major fuels, which are used by the ships for their own use.
BFO (Bunker Fuel Oil) commonly known as Furnace Oil. MGO (Marine Gas Oil) commonly known as High Speed Diesel. MDO (Marine Diesel Oil) commonly known as Light Diesel Oil. Supply of DIESO F-76 (Filtered HSDO) to Pakistan Navy.
A special quality treatment unit - Pre-coat unit was installed in July 1997 to cater entire HSDO (Dieso F-76) requirements of Pakistan Navy for supplying Clear and Bright Colour filtered HSDO, which not only enhance the life of the machinery but also helps in preserving a healthy pollution free environment.
Our Products
Motor Gasoline Kerosene High Speed Diesel Light Diesel Oil Furnace Oil Lubricants
Sales Division
Product Movement-The Back Bone of PSO
PSO, being a flagship company, carries a strong and wide logistics network to cater 70% of total country's demand of POL products timely and efficiently, from Karachi to the remotest areas of the country, through 29 storage points spread throughout the country. At present, most of the POL product movement is carried through self-owned and outsourced tank lorries and rest through tank wagons and pipelines. Recently the adequate availability of alternate fuels like gas has drastically reduced the demand of Furnace oil by 50% which has resulted in surplus fleet of tank lorries and tank wagons.
Net Profit ration Return on Shareholders' Equity Return on Capital Employed Return on total assets Asset utilization
Inventory (x) turnover ration Debtor (x) turnover ration Total asset (x) turnover ration Fixed asset (x) turnover Investment Earning share per
Market value per share Price Earning (x) ratio Dividend share per
Interest Cover (x) ratio Current Ration Value Addition Employees as remuneration Government as taxes Shareholders as dividends Retained within the business
COMPETITOR PROFILE
The Shell brand name enjoys a 100-year history in this part of the world, dating back to 1899 when Asiatic Petroleum, the far eastern marketing arm of two companies: Shell Transport Company and Royal Dutch Petroleum Company, began importing kerosene oil from Azerbaijan into the subcontinent. Even today, the legacy of the past is visible in a storage tank carrying the date - 1898. Shell Pakistan Ltd. recognizes five areas of responsibility. It is the duty of management continuously to assess the priorities and discharge these inseparable responsibilities on the basis of that assessment. a. To shareholders b. To customers c. To employee e. To society
In the line of competition in Pakistan, PSO, Shell Pakistan and Caltex are major competitor to ane an others. PSO and Shell are arch competitors with respect to same product in market.
Shell Products
Strengths
Our strong logistic support meeting huge demands in short time Our widespread depots and divisions to serve the customer better Fleet and corporate cards adds value to our customer
Achievements a) Industrial Consumer (Head Office) - The First Marketing Department To Be ISO 9001-2000 Certified
Industrial Consumer is proud to announce that we have achieved ISO 9001-2000 Certification for the Head Office. We are the first marketing department at PSO to be ISO Certified. This is a great achievement for Industrial Consumer Department. It will help improve our processes as well as further enhance our image with our customers. The Quality Management System will help us streamline our processes to improve efficiency and be PRO-active rather than RE-active. This will directly benefit our customers in terms of improved service quality.
Pakistan
Steel
Pakistan Steel Mills is one of the most sought customers by OMCs in Pakistan. Having business of Pakistan Steel Mills not only adds prestige to that particular OMC but also significantly improves that OMC's market share and overall standing. Pakistan Steel Mills is the largest POL consuming manufacturing facility in Pakistan. After long and intense series of negotiations, we have gained considerable business of Pakistan Steel Mills. c) PSO Fleet and Corporate Cards With a view to provide a Total Solution to our IC customers, we have launched the PF&CC in March 2003. This is a technical and innovative product geared towards better management of IC customers' fleet. Through the PF&CC, the IC customers can utilize the services of the wide range of stations in the major cities. It offers convenience and timesaving to our customer. The PF&CC allows setting of credit limits through increased monitoring for the clients.
IC is Proud that
More than 2,000 industrial units & business houses are being catered through PSO's Industrial Consumer department We are serving all the existing industries in Pakistan through quality products and technical back up
Our People
We have a team of well-qualified professionals who are dedicated to achieve the tasks assigned to them most efficiently. Our people are our strength. We have a customer-focused approach to decision making. We believe in teamwork to accomplish tasks and encourage empowering our team to take timely decisions. Together we work as a team to achieve our objectives.
Products Handled
High Sulphur Furnace Oil-(HSFO) Low Sulphur Furnace Oil-(LSFO) High Speed Diesel (HSD)\ Lubricants
a) Nature Of Business
b)
Power Customers
in Pakistan
TPPL 3%
PSO 90%
F O S a le s B re a k u p o f P o w e r S e c to r (2 0 0 6 - 2 0 0 7 )
KAPC O (L S F O ) 9%
HUB C O 11%
W APD A 31%
Source: OCAC
Source: PSO
WAPDA 30%
Corporate Profile
Founded in 1976, PSO has inherited a wealth of experience in oil marketing from its predecessor companies - PNO, POCL and SOCL. With 32 depots and terminals, nearly 4,000 outlets and more than 8,500 enlisted tank lorries, PSO enjoys 67% of total market share of petroleum products in the country. A well-established infrastructure, at par with international standards, provides PSO an edge over its competitors. During the last 3 years, PSO has undergone a radical change and has emerged with a new corporate outlook as a market leader with a long-term vision. It is a blue chip company with market capitalization of around Rs. 48-50 billion (USD 825-860 million).
Management (Man-Com) and Executive (Ex-Com) Committees Compensation, Organizational & Employee Development (COED) HSE Steering Committee Audit Committee SAP and Purchase Committees Cross-Functional Teams
2. Financial Performance
Effective implementation of corporate reform and business development strategies, in line with best international practices, enabled PSO to maintain its market leadership position in a highly competitive business environment. Accordingly, PSO increased its market share in key products, including Mogas, HSD and Jet A-1. PSOs sales revenue during FY03 surged to Rs.206.37 billion; up by 13.2 % over prior year. The company earned highest-ever profit before tax of Rs.6.21 billion, up by 20.9%, while the profit after tax reached an all-time high figure of Rs.4.03 billion, up by 26.4%. Based on this remarkable financial performance, the company announced a final cash dividend of Rs 7/- per share (70%) to its shareholders, resulting in total dividend of 160% for the whole year, as against 130% cash dividend plus 20% bonus shares declared during the preceding year. The company spent Rs 1,643 million during FY03 to expand its retail network and enhance infrastructure along with sizeable expenditure on information technology. During the period under review, PSO contributed approximately Rs.54 billion to the national exchequer in terms of taxes, duties, dividends and levies thus supporting the government in its revenue generation targets. Other performance indicators like Return on Assets, Return on Capital Employed and Return on Equity reveal that PSO has outperformed its competitors in terms of operating performance. PSOs impressive business performance has resulted mainly from the managements
Solid waste management of PSO House Waste treatment plant for Zulfiqarabad Oil Terminal Oil separators at our New Vision Retail Outlets Purchasing based on environmental concerns Training program in tackling oil spills Induction of Tier-1 oil spill equipment at Installations
Gender Justice
The company has ensured environment conducive to, and free from, gender discrimination and harassment. Recently the management enforced Gender Justice Code of Conduct for safe working condition for one of the important stakeholders of the company. This has contributed to further enhancing the confidence of female employees. The commitment to gender justice is practically reflected in PSOs recruitment and promotion policy.
Bibliography:
Global Network: http://www.psocl.com/
(Pakistan State Oil Company Limited)
http://WWW.kse.com.pk
(Karachi Stock Exchange Pakistan)
Appendix
S les Revenue a
250,000
Amount in Figua r
150,000
135,040 115,636
100,000
50,000
Yea r
Ne Profit ration t
1,500
1.5 1.2
1,000
1 500
Ye ar
0 2007 2006 2005 2004 2003 2002
Ye ar
37.3 34.4
Amount in Figuar
30
27.5
Ye ar