Effectiveness of The Organisations Procurement Assignment Sample

• Subject Name : procurement management

Answer 1

SWOT and PESTLE Analysis

A SWOT review will classify and describe your strengths, weaknesses, opportunities and threats. Weaknesses and strengths are inside the company (Example: credibility, patents, location). Over time, but not without any effort, you can adjust them. Chances and risks are external — they are out on the market whether you like them or not (Example: manufacturers, rivals, price). You cannot change them.

SWOT analyzes may be applied to an entire sector or company within a single community, or to individual programs. PETRONAS or Petroliam National Berhad is best regarded as the Malaysian-based state-owned oil and Gas Company. With sales of over USD 42 billion and reserves of USD 143 billion, PETRONAS has become one of the biggest players in the oil and gas business, not just in Malaysia, but worldwide.

Strengths:

1. Diversified investments: PETRONAS has an immense base of widely diversified corporate activities that stretch throughout oil and gas and related fields.

2. Good client relationships: One of the attempts the organization has often made is to consider all the consumer requirements that are related to oil and gas and to produce goods that satisfy all those requirements.

3. High quality facilities: PETRONAS currently operates three refineries with a capacity of 570 kbpd each; 11 blending plants with a capacity of 615,000 mtpa each; 18 petrochemical processing plants and two completely integrated complexes with a total of 10.8 million mtpa

Weaknesses:

1. Fast costs: The RM60bil Refinery and Petrochemical Integrated Production (Rapid) project in Pengerang, Johor and the US$ 36bil (RM137bil) PETRONAS-led Pacific Northwest LNG project in Canada has enabled substantial investments in two main ventures. This decision was made right before the start of the oil crisis and this incorrect timing has proven costly to the company.

2. Ethical Concerns: PETRONAS has been part of a variety of scandals such as taking unfair advantage of state funding, bad workplace working standards, and other problems such as oil spillage, etc.

Opportunities:

1. Alternative options: PETRONAS used its deep scientific capabilities to push into fairly unexplored areas such as geoimaging, acoustic sensing, 3D VSP etc. We have engaged in a variety of initiatives on renewable energy sources such as tidal power and solar.

2. Automotive alliance: PETRONAS has collaborated with the MERCEDES AMG PETRONAS Formula One squad in a joint collaboration that has acquired a lot of expertise in automotive technologies.

Threats: are those environmental variables that are harmful to market development

1. Competition: The main competitors of PETRONAS are British Petroleum, Shell & Chevron.

Answer 2

Principles of Negotiations

A big differentiator of Sourcing is the opportunity to bargain with vendors. In a environment where the job is increasingly competitive-with more "administrative" functions being programmed out of existence-one of the best advantages a Sourcing specialist has to give an company is the opportunity to derive value from relationships with suppliers. Yet the supply world is changing: thanks to globalization, an increase in demand for some types of products and services and other causes, manufacturers already have more control than consumers across a variety of sectors

Whatever the reason, companies that have come into a weak position with suppliers need to be strategically approaching the situation. Thanks to their acquisition departments, they will no longer rely on rough negotiations. To assist with the strategic re-evaluation, we have established a four-step theoretical process for increasing risk. Organizations will begin by determining how they might enable the supplier in certain ways to understand value.

1. Giving the Manufacturer a New Interest. This is the first move you should take to address a power disparity between manufacturer and customer. When you're working with a manufacturer expected to raise rates, talk of providing fresh interest for them.

2. Adjust How You Shop Acting dynamically and collaboratively with internal partners within a company, Procurement may gain value from dominant vendors by modifying their demand patterns.

3. Develop a New Supplier They provide the prospect that it may make the most sense to fully build a new supplier in a market of very few, very strong suppliers-even though it involves modifying your business strategy or undermining your partnership of established suppliers. That may mean encouraging an neighboring supplier to step into the fray – for example encouraging a European supplier to sell a certain commodity on the North American market.

4. The Hardball Action. Although it's a dangerous tactic worth broaching only if you can't find a more innovative approach, it's been established that playing hardball is successful. If it is canceling all the orders, seeking court action or trying to call authority to prosecute cartel activity, hardball tactics are worth exploring when a manufacturer spikes rates and all other tactic falls.

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