PESTLE Analysis Approach To The Oil And Gas Industry

In order to identify the uncertainties in Shell’s far environment I decided to use a PESTLE analysis approach to the oil and gas industry.

The deep analysis of the macro-environment is key to the organisations in order to understand which factors are impacting their operations. The main purpose of PESTLE analysis (Political, Economic, Social, Technological, Legal and Environmental) is to identify those factors that have an impact on the organisation but are outside its control area. Together with other frameworks (such as Porter’s ‘5 forces’), PESTLE framework is required to develop a comprehensive analytical strategic process.

Political Factors

Due to the presence of natural resources a country may be subjected to Geopolitical fights and

For example, a major investment in renewable energy sources, such as solar and/or wind has dramatic implications in the environment (i.e. reduction of CO2 emission); this requires investments in technology, compliance and conformity to policies that regulate the utilisation of renewable resources, installation of energy plants which may an impact on the local and national economy and may change the perception of consumers.

Shell’s strategy is strongly positioned to adapt to changes, their extensive scenario planning activity allowed them to constructively think of what operations to promote in order to face environmental changes (Cornelius, P. et al, 2005). They have extensively invested in new technology and renewable resources, adapting to the environmental and social-ethical variables (Shell website, 2016).

Although I agree with Elena that the complex interconnection of all factor have a general strong impact on Shell’s business, I believe that the measures undertaken by Shell (large investments on technology and renewables discussed above) helped them to reduce the degree of