Petronas Case Study

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3.1 Analyse possible alternative strategies relating to market entry, substantive growth, limited growth or retrenchment for a chosen organisation. Market entry Penetrating the bottled water market poses a tough challenge for PETRONAS. This is due to the fact that not only is the process of entering the market capital intensive (due to expenditures such as advertising, shipping and hiring of staff) the market is also oversaturated with companies selling bottled. Apart from intense and stiff competition, existing companies might set up high barriers of entry which might deter newcomers from entering the market. Therefore, it is imperative for PETRONAS to devise innovative strategies (such as lowering prices of bottled water) if they wish to successfully enter the market. PETRONAS should target Malaysia as its first market to enter. It is relatively easy for PETRONAS to tap into the Malaysian market because the firm is already established in Malaysia. The new strategy could generate lots of revenue for PETRONAS. Substantive growth As water is a basic necessity, PETRONAS does not have to worry about the high level of competition in the market as long as it devices innovative strategies such as…show more content…
The budget for the new strategy - manufacturing bottled water - is estimated to be approximately 50k Euro. Financial constraints might make it difficult for PETRONAS to implement this new strategy. We can observe that profits obtained from petroleum and the sales of gases is diminishing; this is partly caused by the advent of vehicles that run on solar energy and an increase in usage of electrical stoves. Since PETRONAS does not have adequate funds now, PETRONAS should attempt to obtain sponsorship from Samsung. In return for Samsung's cooperation, PETRONAS can offer shareholder status to Samsung and advertise Samsung's products on every box of bottled

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