Economic Social and Environmental Value Memo
To: CEO Chevron
From: Michael Rodriguez
Date: November 25, 2022
Subject: Economic and Social Value Memo
Executive Summary
This memo summarizes various aspects of the plan to create economic, social, and environmental value for Chevron. The memo presents the organization’s strengths and weaknesses summary, a summary of Porter’s five forces, a summary of the diamond of national advantage analysis, a summary of the firm as a learning organization, and strategic recommendations based on the summaries.
Strengths and weaknesses of Chevron
Chevron has strength in the strong financial background that is supported by a continued rise in revenues. The financial strength can be utilized to undertake expansion strategies that will, in turn, generate more revenues. Additionally, the company has a strong international presence, giving them access to a huge market. Also, the company has a strong brand name, offering them a competitive edge. Notably, this is so because many consumers have a positive attitude toward the company’s products. Finally, the company has a high energy sector diversification characterized by several investments (Bernstein, 2020). However, Chevron has a few weaknesses that can hurt its efforts in the market. First, the company is criticized for causing environmental hazards in different countries. Second, the company has to make significant investments to achieve environmentally friendly investments.
Chevron Porter’s five forces
There are five forces covered under this section. The bargaining power of substitutes is the force with the highest strength. Notably, this is so because other companies in the market are well established, such as XTO Energy and BP, which offer buyers huge substitute options. As a result, buyers can easily shift from one company to another at no additional cost. The rivalry among competitors and the additional force of compliments come in second with a medium-level strength. The rivalry among competing firms is considered medium-level strength because the petroleum industry is highly regulated, and governments set prices. Therefore, there is no competitive advantage that a company operating in the market can gain from a price change.
The threat of new entrants, the power of buyers, and the power of suppliers forces wield the lowest strength to influence the company. Notably, the major reason behind their low strength is the nature of the oil and gas industry. The industry is highly regulated, whereby the companies do not determine prices (Tang, 2018). Further, the industry has many suppliers, and buyers cannot switch from one company to another in search of better prices. In the case of consumers shifting from one company to another, it will be difficult for the company to incur any negative impact due to the buyers in the industry who are not concerned about the brand name.
Diamond of National Advantage summary
The diamond of national advantage was assessed concerning Chevron’s expansion plans to China. The first aspect of the analysis entailed industry rivalry. It was established that China’s petroleum industry is characterized by many companies that present a competitive threat. Also, the industry is characterized by a high call for green energy, influencing the edge of competition. The market was established to contain many substitutes for consumers. The second aspect is considered related to demand conditions. It was established that China presents a market with a high demand for petroleum products, characterized by the need for cheaper and greener energy. The third aspect considered was the related and supporting industries. It was established that China has numerous competitors that present a competitive threat. Still, at the same time, the market has conducive regulations and a solid background of car manufacturers to form a supporting industry (Cui et al., 2020). Finally, factor endowments were addressed, whereby it was established that China has availability of capital in the form of credit facilities, sufficient land, cheap labor, and high technology for innovation.
Chevron as a learning organization
Chevron has worked on its way to becoming a learning organization. The company qualifies as a learning organization when the external environment factors are considered alongside the external factors. From the two aspects, it is established that the need for greener energy is gaining prominence. Therefore, working on this as a learning opportunity can take the organization to another level. From the vast resources they have, they can invest in research and development to become a learning organization regarding sustainability.
Strategic recommendations
Across the entire discussion, it is evident that the need for greener energy is a major aspect of Chevron. Therefore, the first recommendation to the company entails adopting greener energy production methods and creating a long-term plan to ensure they become environmentally friendly. Also, adopting greener energy approaches will give the company a competitive market locally and internationally. Second, the discussion identifies China as a potential country for Chevron to expand its operations. Notably, this is supported by the diamond national advantage analysis. The diamond national advantage analysis identifies China as a potential market with huge factor endowments and cheap labor. Pursuing expansion plans to China will ensure the company makes more financial gains and enhances its global market competitiveness.
References
Bernstein, J. J. (2020). Abandon Judicial” Neutrality”: Why Chevron Deference Stifles Technological Innovation. Rich. JL & Tech., 27, 1.
Cui, L., Fan, D., Li, Y., & Choi, Y. (2020). Regional competitiveness for attracting and retaining foreign direct investment: a configurational analysis of Chinese provinces.
Regional Studies, 54(5), 692-703. Tang, H. (2018). Oil and Gas Firm-Specific and Macroeconomics Determinants of Liquidity Risk (Chevron Corporation). Available at SSRN 3301996.
ORDER A PLAGIARISM-FREE PAPER HERE
We’ll write everything from scratch
Question 
Write a 2- to 3-page memo to the CEO of the company you’ve been assessing throughout the course, outlining your plan to create economic, social, and environmental value. In your memo, include the following items:
Economic Social and Environmental Value Memo
An executive summary of the memo
A summary of the organization’s strengths and weaknesses and recommendations for converting weaknesses into strengths
A summary of your Wk 3 findings on Porter’s Five Forces
A summary of your Wk 4 findings on the Diamond of National Advantage
A summary of your Wk 5 analysis of the firm as a learning organization
Strategic recommendations based on your previous work in this course. Include the opportunity identified in week 2, the move into the country identified in week 4, and any recommended moves toward being a learning organization. Provide a rationale for each recommendation.