Spectra Energy

Running Head: SPECTRA ENERGY

Spectra Energy

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Spectra Energy

Introduction

In recent times, the global financial crisis prevailed. Not only the people but also the companies have experienced a lot of problems. In most industries saw their profits decline companies over the previous year. In the Netherlands, the impact of the crisis is very noticeable. Many large, global Dutch companies were forced to cut or saw their profits shrink. At present, the global economy recovering, but the gains are not yet back to its previous level. The question now is whether the marketing strategy of these companies will have to be changed to increase profit? It is too much work for all these companies individually to view. In addition, in the case of spectra Gas interesting to look at the future, since the stock oil and gas on the world is finite. What should spectra energy do when this stock will eventually become in more demand with less supply.

The products in this case gasoline, diesel and LPG. Where are these products? All three fuels are needed for consumers wanting a car, truck, motorcycle, scooter or other motorized vehicle use. For this transport is to drive fuel and transportation because consumers want to drive, he developed a demand for fuel. Depending on his or her vehicle, there is a choice of petrol, diesel or LPG. A motor vehicle can only fuel a drive to the engine fails. It is not possible for diesel fuel in a petrol car and vice versa.

These fuels are very simple products. In that they have no design needed, since there is no packing around it. The fuel comes in liquid form from the hose of the pump. This goes for gasoline, diesel and LPG. In addition, the fuel gives no warranty or service. It's a product that can be used only once and therefore cannot be reuse. This means that no guarantee is required.

Management & Stewardship

Spectra Energy runs a tight ship, and is managed by longtime industry hands. With the retirement of longtime CEO and president Fred Fowler at the end of 2008, CFO and fellow board member Greg Ebel stepped up to head the company. The board is chaired by independent director Bill Esrey, who served as CEO of Sprint S for 18 years, and chaired its board for 13. We applaud Spectra for separating the chairman and CEO roles, and we are impressed by the deep and varied experience of the board members, who seem to be well-positioned to provide advice and guidance. Eleven out of 12 board members are independent; only CEO Ebel is employed by Spectra. Compensation seems reasonable for a company of this size, and the management team's incentive plans stress long-term returns. Overall, we think Spectra Energy is a well-run company that looks out for the interests of its owners. Since the company is relatively young, we cannot judge how attentive to shareholder-sponsored initiatives the board may be.

Strengths of Spectra Energy

The first point will be discussed in the SWOT analysis, the strengths of the company. Where the company excels and where it can fall back on in hard times? For Spectra Energy, the following three points of their strengths:

* The company has a large market share

* Spectra Energy's brand recognition is very high

* The company is very far vertically integrated

As previously indicated, Spectra Energy, Wal-Mart to post the largest annual turnover of all companies in the world. In addition, the following ExxonMobil the largest player in the market for oil and gas (Bamberg ,2000). This large market share means that a company providing a large flow of money getting.

One reason for the large share of Spectra Energy is the fact that they have a high reputation. When consumers think of companies they can buy fuel, they will quickly named Spectra Energy in the main jump. This high reputation is due to the omnipresence of Spectra Energy. The company tries to satisfy its customers as possible, by placing the product on as many places to offer. For this reason, Spectra Energy about numerous stations worldwide. The company also does a lot of promotion through sponsorship and advertising. This leads to a high reputation and are therefore more consumers to a Spectra Energy gas stations (Bamberg ,1994).

Weaknesses of Spectra Energy

Now it is indicated where the business is strong, it is time for the other side of the internal analysis, namely the weaknesses of the company. It is here where the company is in relatively poor and where the competition could do better (Cordesman ,2004). For Spectra Energy, the following three weaknesses:

* The search for gas is a costly affair

The first weakness for Spectra Energy is that they operate in a relatively capital-intensive industries. For the production of fuel they buy a lot of plant and machinery. They have also very expensive drilling rigs needed to search gas from the ground. These high costs mean that the company also has a very high turnover must run to at least "break even" to come out. Currently there is no problem and makes the company even much profit, but in times of economic crisis, the high cost of plant and machinery are a serious obstacle for the company.

The final weakness of the company is that it operates in a very dangerous industry. When something goes wrong on the site of an oil or gas industry, it can really go wrong right. An explosion of a tank of petrol for example, can wipe out large parts of the area. Under this environment are at the site of Spectra Energy many other storage tanks. The devastation would be enormous in an explosion. To counteract the danger Spectra Energy has very strict safety on its site. Thus, for example, may not be faster than 30 km / h and driven to the lights of cars during the day light. Although these measures the probability of a disaster reduce the risk remains ever present (Ferrier ,1982).

Opportunities for Spectra Energy

Of course there are also opportunities for Spectra Energy. There are various ways to achieve a larger market share or market share in areas where they are not very active. The three opportunities for Spectra Energy are:

* Economies that are developing (China, Brazil, Russia, India)

* BP