CHEVRON - Rakshit Upadhyay

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  • 8/7/2019 CHEVRON - Rakshit Upadhyay







    SUBMITTED By: Submitted To:RAKSHIT UPADHYAY Dr. R.J.BhattMBASEM 4 (SFI)Roll No: - 11

    Department of Business Administration,Bhavnagar University,


  • 8/7/2019 CHEVRON - Rakshit Upadhyay


  • 8/7/2019 CHEVRON - Rakshit Upadhyay


    Company Roots:

    They trace their earliest roots to an 1879 oil discovery at Pico Canyon, north of Los

    Angeles, Calif., which led to the formation of the Pacific Coast Oil Co. That company

    later became Standard Oil Co. of California and, subsequently, Chevron. They took on

    the name "Chevron when they acquired Gulf Oil Corp., in 1984, nearly doubling their

    worldwide proved oil and gas reserves. Their merger with Gulf was at that time the

    largest in U.S. history.

    Another major branch of the family tree is The Texas Fuel Company, which was formed

    in Beaumont, Texas, in 1901. It later became known as The Texas Company and

    eventually Texaco. In 2001, their two companies merged. The acquisition of UnocalCorporation in 2005 strengthened Chevron's position as an energy industry leader,

    increasing their crude oil and natural gas assets around the world.

    Global Scope

    Our diverse and highly skilled global workforce consists of approximately 60,000

    employees and about 4,000 service station employees.

    In 2009, Chevron produced 2.7 million barrels of net oil-equivalent per day, 7 percent

    higher than in 2008. About 73 percent of that volume occurred outside the United States.

    Chevron had a global refining capacity of more than 2 million barrels of oil per day at the

    end of 2009.

    Our marketing network supports retail outlets on six continents. And we have invested in

    13 power-generating facilities in the United States and Asia.

  • 8/7/2019 CHEVRON - Rakshit Upadhyay




    Steady financial performance

    Cash generator

    Presence across entire energy value chain

    Strong market position - upstream (exploration and production) and downstream

    (refining, marketing & transportation)


    Declining sales of refined products

    Declining oil and gas reserves

    Legal action by the Iraqi Government

    Employee unrest in Nigeria


    Increasing demand from China, India

    Increasing demand for liquefied natural gas (LNG)

    Capital investments

    Biofuels initiatives


    US and EU economic slowdown

    Environmental regulations

    Tax regulations in the US

    Increasing focus of green fuels & automobiles in the US


  • 8/7/2019 CHEVRON - Rakshit Upadhyay




    Chevron's goal is to be No 1 in total stockholder return relative to its peers and to achieve

    a minimum 12 per cent return on capital employed while continuing to grow. Success

    requires profitable earnings-per-share growth greater than their competitors', and they are

    convinced that they have the organization and the will to succeed.

    Achieving the goal will require superior performance in four areas: operational

    excellence, cost reduction, capital stewardship and profitable growth - all driven byorganizational capability.

    1. Operational excellence: Safe, reliable, efficient operations companywide are essential

    to achieving their objectives. They are, in fact, the foundation for growth. This is Job No.

    1 for all of them day in and day out. They are committed to ensuring continued and

    sustainable improvements in their operations.

    2. Cost reduction: they will build on last year's $500 million cost-reduction effort, muchof which will continue to show rewards in the coming years. For example, they are just

    starting to reap the benefits from their new global procurement process and from their

    restructured support functions.

    3. Capital stewardship: They reinvest about $5 billion annually in their business. It's

    essential that they be wise stewards of their investors' money. They have a world-class

    project-management process that is helping them improve greatly in two areas: decision

    quality - ensuring that the right people have the right data when deciding whether a

    project should proceed; and project execution - excelling in engineering, construction and

    start-up so that they employ capital most efficiently. The start-up of Angola's deepwater

    Kuito Field - under budget and just two and a half years after discovery - was a

    remarkable achievement and is evidence of progress in this area.

  • 8/7/2019 CHEVRON - Rakshit Upadhyay


    4. Profitable growth: Delivering on operational excellence, cost reduction and capital

    stewardship will provide earnings growth. But they must do more.

    They will seek continued profitable growth in their core businesses, particularly

    international upstream. They will seek acquisitions and alliances that enhance growth. In

    February, They announced a joint venture between their chemicals business and that of

    Phillips Petroleum Company. The new $6 billion company will be a world-class

    competitor in petrochemicals. They will also capture new opportunities. Currently,

    they're growing in the power and gas business through Dynegy, in which they hold a 28

    per cent interest. They're also investing in new process technologies, including a method

    for converting natural gas to liquids.

    Their Strategic Plan translates their vision into action. It aligns and integrates their

    organization, inspires confidence, and differentiates them from the competition.


    Their major business strategies will develop leading integrated positions in growth areas

    of the world:

    Global Upstream- grow profitably in core areas and build new legacy positions

    Global Gas- commercialize their equity gas resource base while growing a high-impact

    global gas business

    Global Downstream- improve returns and selectively grow with a focus on integrated

    value creation

    Renewable Energy - invest in renewable energy technologies and capture profitable


  • 8/7/2019 CHEVRON - Rakshit Upadhyay



    Three enabling strategies apply to all parts of the company:

    1. Invest in People to achieve their strategies

    2. Leverage Technology to deliver superior performance and growth

    3. Build organizational capability ("4+1") to deliver world-class performance in

    operational excellence, cost management, capital stewardship, and profitable


    Underlying and aligned with each of their Major Business and Enabling Strategies are

    more detailed plans, tactics, and metrics targeted to guide them to success in each of the

    specific business areas where they choose to compete. These detailed plans are

    continually tested against the competition and refreshed to achieve sustained competitive



    They categorize innovation in three different ways: First, there is radical innovation.

    Radical innovation is a game changer. In product terms, it is a radical new product --

    Post-its for 3M was a radical diversion, for example. The problem is that of the hundreds,

    maybe millions, of ideas that surface in a company, how many make it to becoming an

    actual product? It is minimal.

    Second, they look for reapplied innovation. Reapplied is where an idea or a solution to a

    problem in one area actually might be radical when you bring it into a new area. You're

    not reinventing the wheel, but you're adapting something to a new area or new product.

  • 8/7/2019 CHEVRON - Rakshit Upadhyay


    There is some great stuff out in the industry where companies like Procter & Gamble set

    targets for the number of reapplied ideas that they generate. Reapplied might be bringing

    a cost-saving initiative you saw over in finance and applying it in the IT operations.

    And then there is incremental. This is the hardest one for people to understand.

    Incremental changes happen all over the place and innovations in this area are plentiful,

    but they are the least recognized. So, by having people understand that if you take your

    idea and add a couple things to it and somebody else takes your idea and improves it, that

    is actually innovative thinking.

    All three of them add up to a pipeline that gets you more of the radical [innovation] down

    the road.

    They built a space that is about 2,000 square feet where they can bring people together.

    They have six purposes for this thing:

    Collaborative thinking;

    Training on innovation;


    Business engagement;

    Creative networking; and

    Coaching and mentoring.

    They use techniques from IDEO, the creative design company, on how to reconfigure

    rooms and walk people through breakthrough thinking.

    What they try to do is give people techniques they can utilize after they walk away from

    this space.

  • 8/7/2019 CHEVRON - Rakshit Upadhyay


    Process of innovation at Chevron:

    The first step is to really understand what you are working on.

    The next step is to observe: Go out and look at how the problem is affecting people and

    how they respond to it -- what the real problem is, not just what you think it might be.

    The next step is the one everyone thinks when you say innovation: to ideate. Here is

    where people brainstorm and creatively think. The next step is to refine the ideas. Then

    you prototype. After you're done with that, you can plug into your production cycle.


    Chevron has had a federated model; they have data all over the corporation. They have

    lots of data about people in one organization, another database about people in another

    organization. Consolidating that information to have one source of the truth, to be able to

    make faster, more competitive decisions more quickly, is a really important focus in


    The executives who are coming into their roles today, while not as sophisticated, have a

    much better understanding of how information technology provides a platform that theentire company lives off. And as the next generation of executives comes up, those who

    have had computers their whole lives, the power of technology is going to be much more

    integral to everything they do and all the decisions they make about the business.


    2007s Shared Services Project of the Year Award went to Chevron. The use of highly

    detailed communications plans to help create momentum and support a complex Shared

    Services development program at Chevron was just one of the factors that won the

    company the award.

  • 8/7/2019 CHEVRON - Rakshit Upadhyay


    Chevron had several clear goals for its Shared Services project:

    migrating personnel data from different legacy systems in every country onto one

    ERP (SAP) system

    implementing self-service functionality

    establishing an internal Shared Service Center

    Transferring UK payroll to a new system and outsourcing all payroll


    We can be impressed by both by the strength of the companys ambition and also the

    thoroughness of its planning and attention to detail. For example, Chevrons Change

    and Customer Relationship Management Program includes service standard

    agreements with agreed turnaround times and accuracy rates plus a commitment to

    regular feedback through an annual online survey, monthly reviews with embedded

    HR groups and monthly employee and manager phone surveys.

    They regularly reviewed the scope of their project and engaged with their stakeholders to

    feedback progress. Decisions needed to be ratified by their Decision Review Board (a key

    group of senior personnel, with a vested interest in making the project a success) which

    ensured that they had fully researched issues, potential delays, and any changes to the

    agreed process before recommending any changes. Regular team meetings ensured that

    the project team were up to date and on board at all times.

    They have an intensive multi-media approach, and rather than waiting for the customer or

    business to come to them, they regularly seek their feedback in a variety of ways: they

    invite themselves to meetings to stimulate discussion and solicit feedback; conduct an

    annual online customer satisfaction survey; and solicit feedback via informal telephone

    surveys on a fortnightly basis.

  • 8/7/2019 CHEVRON - Rakshit Upadhyay


    A surprising comment was that although their stakeholders felt they had an effective

    communication strategy they could've communicated and engaged them more. They have

    taken this on board and have ensured that in their latest project (introducing four more

    business units in Europe to our ERP platform) they have facilitated a support network for

    all of their stakeholders by arranging a face to face meeting for them, and the project

    team, at kick-off and at regular intervals throughout the project; an even more intense

    program than in previous projects.


    Chevron is known around the world through their three brands: Chevron, Texaco and


    Chevron's marketing organization supports approximately 22,000 branded service


    Trusted by Customers

    Chevron, Texaco and Caltex brands hold top positions around the world. Chevron and

    Texaco consistently rank as the "Most Powerful Brands" in the United States, according

    to the Oil Price Information Service, and Chevron was recognized by the Lundberg

    Survey for its highest value margin at the pump of all U.S. brands. Their convenience

    store brand, ExtraMile, joined their Food Mart and Texaco Star Mart franchises in

    earning the Convenience Store Chain of the Year awarded by Convenience Store

    Decisions magazine. Caltex was voted the "brand of choice" for the second year in a

    prestigious Hong Kong poll and also was rated as having the best customer service.

    Chevron stations serve drivers in the western and southern United States as well as in

    British Columbia, Canada. Texaco stations serve customers primarily in southern U.S.

    states, across Latin America, and in parts of Africa and Europe. Caltex stations are

    known for their quality across Asia-Pacific and in parts of Africa and Pakistan.

  • 8/7/2019 CHEVRON - Rakshit Upadhyay


    Around the world, they are adding Techron to their fuels. Gasoline with Techron helps

    keep engines clean. More than 90 percent of the branded gasoline sold by Chevron

    worldwide includes Techron.

    Starting in 2009, they began applying Techron technology already used gasolineto

    diesel fuel. They have successfully launched Caltex Diesel with Techron D in selected

    markets in South Africa and Asia. Techron D is their proprietary engine-cleaning additive

    for diesel fuel, formulated specifically for engines that comply with today's stringent

    emission standards.

    Chevron continues to introduce alternative fuels in markets around the world. Wherever

    sold, Chevron biodiesel meets U.S. Biomass-Based Diesel requirements and original

    equipment manufacturer's guidelines as well as their own high standards of quality,

    reliability and performance.

    Health, Environment and Safety

    Chevron's marketing organization ensures that their network of service stations, product

    terminals and transportation fleet operate safely and reliably. During 2009, they scored a

    delivery reliability rating of 99.5 percent.

    Their marketing group trains employees to promote safety, st...