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Value creation is the basic foundation for every running business or corporation. This is because it differentiates a company from its rivals, creates unique meaning to the firm’s brand, and helps it gain loyal and long-term clients. One way to enable value creation is through research to enable one to understand their customer base and business operations. For this reason, the purpose of this memo is to present the finding from the analysis carried out on Chevron corporation that would help determine ways to create economic, social, and environmental value.

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Executive Summary

Among the strengths of the Chevron corporation is that it has a comprehensive global presence, a wide product portfolio and complete integration over its products. Its weaknesses include experiences with legal problems, increasing debts and environmental pollution. Findings from Porter’s five forces revealed that the threat of new entrants, the power of suppliers, the power of buyers and complementors had minimum strength. On the other hand, the power of substitutes and rivalry among competitors were established to contain medium strength.

The Diamond of National Advantage analysis revealed that Pakistan has stiff competition in the oil and gas industry. The related and supporting industries identified in the analysis were the transportation and agricultural industries. Moreover, the country experiences high demand conditions for energy following the increased population. Furthermore, Pakistan is rich in factor endowments with 2p oil reserves with almost 0.568 billion US barrels and 2p gas reserves with a volume of approximately 21.45 trillion cubic feet (Pakistan Ministry of Energy, 2020). It also has a sufficient supply of human resources and a vast network of pipelines for oil and gas distribution.

The findings conducted on Chevron as a learning organization revealed that the elements of inspiring and motivating people with a purpose, empowering employees, accumulating and sharing internal knowledge and gathering and integrating external information to a medium extent. Moreover, the elements of developing leaders, challenging the status quo, and enabling creativity had a medium extent.

Finally, Chevron should increase its efforts toward lower carbon products to promote environmental value. Moreover, the company should expand its operations into Pakistan to increase its economic value due to the rising demand for energy in the country, which would increase its sales. In addition, the company will have to invest more in CSR activities in society to help foster economic and social values. Finally, Chevron leaders should consider encouraging their workers to give honest and frequent feedback that will help enhance employee empowerment.

Chevron’s Strengths and Weaknesses

Chevron Corporation has a comprehensive and dominant global presence in over 180 nations, including the United States, South Africa, Russia, Canada, Brazil, Denmark, Russia, China, and Congo, among others. This strength has allowed the company to expand its market scope of operations which increases the customer base, product sales, and production. As much as the company has a high global presence, the company can also continue expanding its operations to other countries, which would help promote its economic value. In addition to a solid global presence, the company possesses a wide product portfolio, including fuels, base oils, additives, and marine oils. Its wide range of products helps Chevron Corporation maintain its performance and competitive edge against its competitors in the industry. Moreover, Chevron Corporation has complete integration over its products from manufacturing refineries, distribution, and selling products, which allows the completeness of each element of the value chain process. Finally, the company has a robust global brand value estimated to be 14588 million dollars (Sonnichsen, 2022). The strong global brand value has helped the company to be globally recognized hence significantly increasing its overall income revenue as well as enhancing its competitive advantage.

Like every other established organization, Chevron Corporation is also faced with various weaknesses that diminish the effectiveness of its operations. One of the main weaknesses is that the company faces many legal problems. This has been seen in various instances, including when the company was fined by the United States Environmental Protection Agency (EPA) following its negative environmental impact on the emission. Moreover, Chevron corporation had to be suspended in Mexico for law-breaking against disclosing excessive emissions. These legal problems pose a significant challenge with the ability to destroy the company’s brand reputation. In addition to legal issues, the corporation is recognized to be among the top polluting companies in the industry. This challenge invites more legal problems following the need to maintain environmental and occupational safety and can greatly affect the company’s brand and reputation. Finally, the company has a load of debts amounting to over 31,369 million dollars in 2021(Chevron, 2022d). Increasing debt can adversely hinder the organization’s cash flow and enhance business risk.

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However, every problem has a solution meaning that Chevron’s corporations can be turned into strengths. First, the company’s global pollution problem presents an opportunity for the company to come up with ways such as investing in low-carbon fuels and renewable energy in an attempt to maintain and enhance environmental safety. In addition, shifting to low carbon products and renewable energy will allow the corporation to increase its income revenue following the increased demand for cleaner, reliable, and yet affordable energy (Luderer et al., 2019). As a result, the company will be able to foster environmental value. In legal problems, the company can consider taking responsibility for the acts that forced it to get legal actions imposed and work towards reducing them. Moreover, the company should increase the transparency of its operations that can cause harm and how they plan to rectify the problem. This is because honesty and transparency will help the company develop trust with its customers and enhance dependability on the company’s brand. This will, in turn, increase the company’s income revenue as it will be able to maintain its customers’ loyalty.

Finally, compared to equity financing, debt can be a good thing for the company. This is because the corporation will be able to easily forecast and budget with knowledge of the exact amount it will be expected to pay in a specific period. On the other hand, using equity financing is very expensive as investors require an investment return proportional to the risk inherent in their contribution (Legesse et al., 2021). As a result, equity will end up costing the company more than debt would.

Porter’s Five Forces

From the research conducted on Porter’s Five Forces in relation to Chevron corporation, the threat of new entrants was found to be minimal or low. This is because it is challenging for new companies to efficiently and smoothly run in the industry considering the economies of scale that Chevron operates in. In addition, Chevron uses large production, which enables it to maintain a cost advantage making it challenging for companies that would consider entering the industry following the high costs needed for production. Moreover, government policies involving strict legal requirements and licensing pose a significant problem for new market entrants (Nguyen, 2022). Furthermore, it is very crucial to establish product diversity and differentiation in chevron’s operating industry. This is because the industry’s customer base has different preferences that would require unique and diverse products to be met. For this reason, it will be difficult for new companies to establish a comprehensive product portfolio as it requires vigorous advertisements to market the entry brand.

The power of buyers was found to be low since the number of operating companies in the industry is less compared to suppliers. This means buyers will have limited organizations to choose from, diminishing their bargaining power (Goyal, 2020). Moreover, the product prices in the oil and gas industry are determined by the government, making it challenging for consumers to negotiate preferred prices. In addition, the power of suppliers was found to be minimal as the number of suppliers is more than that of buyers, thereby severely diminishing suppliers’ negotiation power. Additionally, the differentiation factor of the industry’s products is very low, which makes it easy for corporations to easily shift to other suppliers as a result of cheap prices.

However, with competitors such as Shell, Total energies, BP, ExxonMobil, and RWE, the power of substitutes was found to be of medium strength. This is because they produce similar products to chevron’s, such as biofuel, wind power products, and solar energy, which highly poses a great threat of replacement. To reduce this impact, the company is supported by loyal customers, which have been mostly gained by the CSR activities of the company. Additionally, the energy demand is significantly increasing globally, which needs to be efficiently met, and with inadequate substitutes in the industry, it is difficult to replace the company (Goyal, 2020). Furthermore, the strength of rivalry among competitors was found to be medium. This is because most competitors are large companies that limit their moves towards increasing competitive advantage. Moreover, with the expansion in the industry and fixed product prices, companies are forced to reduce their prices as the only way to increase their sales which can limit competition. Finally, the complementors force has minimal strength since most products in the industry balance each other out (“Competitive Forces Model,” 2022). For example, natural gas and renewable energy are regarded as complementors instead of competitors, reducing the impact on the company.

Diamond of National Advantage

The results from Pakistan’s analysis in relation to the diamond of national advantage indicated that the country’s oil and gas industry is faced with stiff competition from companies such as Shell corporation, Total energies, and the Attock oil company. These companies offer similar products to those of Chevron and can hinder the smooth entry of the corporation into Pakistan. Moreover, the investigation of Pakistan’s demand conditions revealed that higher energy amounts are needed to meet and satisfy the country’s needs. The shortage of energy in the country has been caused by inadequate energy production resulting from the improper distribution of resources, debt recycling, and lack of enough energy supplies and exploration activities (Raza et al., 2022). All these conditions open opportunities for Chevron to expand into the country to fill the energy demand gap.

Pakistan’s transportation and agricultural sectors were determined to be the supporting and related industry to Pakistan’s oil and gas industry. The agricultural sector is mostly dependent on using fuel in farming machinery to help in land cultivation and pump water and gas to produce fertilizers. Similarly, the demand for automobiles has rose in the country following the growing population and requires a sufficient supply of gas and oil products to enable effective operation in the transportation sector. Finally, an investigation of Pakistan’s factor endowments indicated that by 2019 Pakistan has 2p oil reserves with almost 0.568 billion US barrels and 2p gas reserves with a volume of approximately 21.45 trillion cubic feet (Pakistan Ministry of Energy, 2020). Furthermore, due to the significant population growth, the country has a sufficient supply of human resources. Pakistan heavily invests in equipping and training its human resources with the skills that can give the country a competitive edge. Moreover, the country contains a vast network of oil pipelines covering about 300km from Karachi city to Machike and Faisalabad stations (Pakistan Ministry of Energy, 2020). Additionally, Pakistan possesses liquified natural gas terminals, gas distribution and transmission pipelines, auxiliary systems, and equipment.

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Chevron As a Learning Organization

The analysis conducted on Chevron as a learning organization revealed that Chevron epitomizes the element of inspiring and motivating people with a mission or purpose to a high extent. The company has a mission to be a leader in its industry in managing safety, health, and environmental performance. The organization intends to achieve this by investing in low-carbon fuels. Chevron has a high extent level on the element of leadership development. The company’s culture warrants that employees are required to lead without considering if they have managerial or supervisor titles or not (Chevron, 2022b). The corporation founded a leadership development continuum to offer potential individuals learning modules, coaching, assessments, virtual webinars, and self-paced learning materials that aim at developing their leadership skills. Additionally, the company has a We Lead Model, an Aspiring Leaders Program, an emerging leadership program, and a leadership development program aligned with diversity and inclusion, all of which are aimed at creating quality leadership.

The element of empowering employees was found to have a high extent in Chevron Corporation. The company focuses on promoting diversity and inclusion, which helps empower its employees to maximize productivity in the organization. A diverse and inclusive community allows employees to feel comfortable to display their potential and get supported without discrimination based on their background, which empowers them to increase their performance. Moreover, the company ensures that its workers are treated with dignity and respect, creating a safe work environment (Chevron, 2022c). This makes employees feel accepted, which then empowers them to increase efforts towards accomplishing the company’s goals. Additionally, Chevron uses compensation and tenure to reward and complement its employees on outstanding performance and push them to work harder on improving their productivity. Finally, Chevron uses the framework of delegation of authority to empower its employees to have control of their work which improves efficiency.

The element of sharing and accumulating internal knowledge was found to be of a high extent. The company uses its diversity and inclusion culture to create an environment and work community where employees can easily share information with their colleagues. This is because employees are provided with a safe and neutral space to share their ideas and solutions without judgment. Moreover, Chevron has a discrimination policy that provides its workers with equal opportunities to give their contribution of knowledge and engagement in its operations hence facilitating information sharing.

Likewise, the element of gathering and integrating external information was revealed to be of a high extent. The company uses teams to collect, identify and disseminate information on the company’s best practices. Additionally, Chevron uses its website and cookies to collect information related to customers’ preferences and reinforce security measures. Furthermore, the company takes advantage of CSR activities to gather feedback on preferences and sections that need changing to meet the needs of its customer base. Finally, the factor of challenging the status quo and enabling creativity was of a high extent. This is because the company came up with ways that will help curb the environmental pollution problem by shifting to the creative idea of producing low-carbon fuels and renewable energy (Chevron, 2022b). Therefore, working towards lowering the carbon intensity of products would greatly improve environmental safety and increase income revenue.


To begin with, Chevron should consider increasing its efforts towards accomplishing the goal of producing low-carbon products. This is because the low carbon products will help the company enhance environmental safety while satisfying and keeping up with the rising demands for cleaner, reliable, yet affordable energy. Success in the production of low carbon intensity fuels will is a difficult task accompanied by high production, installation, refinement, and storage costs making it challenging for other corporations to imitate. With product differentiation, Chevron corporation will have a competitive edge in the market and help improve the company’s income revenue while curbing the climate change problem.

Second, the company should consider expanding into Pakistan, which has a rising demand for energy. The growing population in the country increases the energy demands within the country, creating an opportunity for Chevron to add economic value. Furthermore, the rising population in the country helps provide human resources that can be helpful in the oil and gas sector. Moreover, the country possesses oil and gas reserves which act as natural resources that help in the production of fossil fuels. Additionally, the company contains necessary infrastructure, such as oil and gas pipelines, that will help in the efficient transportation of oil and gas products.

Third, the company should invest more in corporate social responsibility, which will help it associate and interact better with its clients. The CSR activities will allow the organization to gain direct feedback from its customers, which will enable it to efficiently and effectively on areas of improvement to satisfy customers’ tastes and preferences. Through the satisfaction of the customers’ needs, the company will be able to improve customer loyalty and retention, which will enable an increase in sales and add economic value. CSR activities will also enable the company to market its brand and maintain its reputation towards maintaining economic value. Besides adding economic value, CSR activities can also be used to add social value. This is where the company will have to invest in educating and bettering the community or society of operation. Chevron can provide scholarships that will enhance society’s quality of education, thereby adding social value. Moreover, CSR activities enhance social value by providing growth opportunities and supporting activities to help improve the quality of life in the community.

Lastly, Chevron leaders should consider encouraging their employees to give honest and frequent feedback. The feedback obtained can help leaders develop empowerment strategies directed to specific individuals and help the company grow with the needs of its employees. Moreover, leaders can help in internal feedback collection by being active listeners to their workers without ignoring any issues. Understanding the obstacles employees face will help empower its employees y creating a safe and comfortable environment where every individual will be free to showcase and grow their abilities.

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Chevron. (2022a). Chevron business conduct and ethics code. Web.

Chevron. (2022b). Chevron Corporation – Human energy. Web.

Chevron. (2022c). Chevron society. Web.

Chevron. (2022d). 2021 supplement to the annual report. Web.

Goyal, A. (2020). A critical analysis of Porter’s 5 Forces Model of competitive advantage. Journal of Emerging Technologies and Innovative Research, 7(7), 149-152. Web.

Legesse, T., Tang, J., Wu, Z., & Guo, H. (2021). Debt financing, corporate investment and the productivity of capital invested: Evidence from biggest manufacturing countries. Cogent Economics & Finance, 9(1), 1-21. Web.

Luderer, G., Pehl, M., Arvesen, A., Gibon, T., Bodirsky, B., & de Boer, H. et al. (2019). Environmental co-benefits and adverse side-effects of alternative power sector decarbonization strategies. Nature Communications, 10(1), 1-13. Web.

Nguyen, J. (2022). Porter’s Five Forces: How forces model shapes business strategy. JNS.Millennial. Web.

Pakistan Ministry of Energy. (2020). Development plan for Pakistan oil & gas industry. Web.

Raza, M., Khatri, K., Israr, A., Haque, M., Ahmed, M., Rafique, K., & Saand, A. (2022). Energy demand and production forecasting in Pakistan. Energy Strategy Reviews, 39, 1-11. Web.

Sonnichsen, N. (2022). Brand value of top oil and gas companies worldwide 2022 | Statista. Statista. Web.

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