Strategic Management Report (final33) (1)

Strategic Management of Totalgaz (Bangladesh)

ii

Strategic Management of Totalgaz (Bangladesh)

ii

Strategic Management of Totalgaz (Bangladesh)

An Analysis of Strategic Management Of Totalgaz(Bangladesh) Prepared for Dr. A. K. M. Saiful Majid Professor Institute of Business Administration University of Dhaka

Prepared by Masum Elahi Roll No: ZR1402027, Batch: 19th Executive MBA Program

Institute of Business Administration (IBA)

University of Dhaka ii

Strategic Management of Totalgaz (Bangladesh)

Date of Submission: July 13, 2016 Letter of Transmittal 13th July, 2016 Dr. Saiful Mazid Professor Institute of Business Administration (IBA), University of Dhaka Dear Sir, It’s our immense pleasure in submitting the term paper on “Totalgaz” as part of our course requirement. The term paper has been completed in the light of the knowledge that we have gathered from the course “Strategic Management”. I have found this report to be truly challenging in many aspects, indeed very interesting in relation to the various interpretational and engrossing exercises. Writing this report itself was truly comprehensive learning experience. I have tried my level best to complete this assignment meaningfully and correctly, as much as possible.

Sincerely yours, Md. Masum Elahi Contact: +88 01716373073, Email/;[email protected]

ii

Strategic Management of Totalgaz (Bangladesh)

Executive Summary …………………………………………………………………..

Page No ix

List of Figures ……………………………………………………………………………. List of Tables ……………….……………………………………………………………. List of Abbreviations ……….……………………………………………………………. 1.

2.

xii xiv xv

Introduction ………………………………………………………………………

1

1.1. 1.2. 1.3. 1.4. 1.5. 1.6.

Origin of the Report ……………………………………………………. Objectives …………….…………………………………………………. Scope ...………………………………………………. Methodology ...…………………………………………………. Data Collection Method ………………………………… Limitations of the Study ….…………………………………………….

3 3 3 4 4 5

Corporate Profile of Totalgaz ………………………………………………………. 2.1. History and Background of Totalgaz ………………………… 2.1.1. Totalgaz in Bangladesh ………………………… 2.2. Full time employee…………………………………… 2.3. Totalgaz Product and services …………………………………

6 6 7 9 10

2.3.1 Products 2.3.2 Services 3.

Strategy Overview ………………………………………………………………. 3.1. Vision Statement …………………………………………………………. 3.1.1. Analysis Vision Statement ……………………………………. 3.2. Mission …………………………………………………………………….. 3.2.1. Analysis of Mission Statement ………………………………….. 3.3 Core values …. ………………………………………………………….

18 18 18 20 20

3.3.1. Analysis Core Values ………………………………………………….. 3.4

Objectives of Totalgaz………………………………………………….. ii

Strategic Management of Totalgaz (Bangladesh) 3.4.1 SMART card analysis…………………………………………………. 3.5

Business model of Totalgaz…………………………………………………

20

3.5.1 Value proposition of Totalgaz ………………………………….. 3.5.2 Profit formula for Totalgaz………………………………………….

20

3.6

Balanced Scorecard…………………………………………………..

3.7

Strategic Intent………………………………………………………………..

4 Situational Analysis…………………......................................................................................... 4.1 External Environment 4.1.1 Industrial Life cycle of LPG industry in Bangladesh………………………………… 4.1.2 Industry Development…………………………………………………………………….. 4.1.3 Market Growth

…………………………………………………………………………

4.1.4 Market scenario……………………………………………………………………………. 4.1.5 Strategic Group ……………………………………………………………………………. 4.2 Internal Analysis 4.2.1 PESTLE Analysis 4.2.2 SWOT analysis of Totalgaz 4.2.3 Porters five forces model 4.2.4 Key Success Factors 5 STRATEGY MAKING AND IMPLEMENTATION 5.1 Strategic Level analysis 5.1.1 Corporate Strategy 5.1.2 Business Strategy 5.1.3 Functional Strategy 5.1.4 Operational Strategy 6.0 STRENGTHENNING COMPANY'S COMPETITIVE POSITION

ii

Strategic Management of Totalgaz (Bangladesh) 6.1 Offensive and Defensive strategy(offensive) 6.2 Value Chain Activities 6.3 Red ocean or Blue ocean strategy 7.0 Assessing Competencies 7.1 Competency 7.1.1 Quality 7.2 Core Competence 7.2.1 Safety 7.3 Distinctive Competency 7.3.1 Expert

8 DIVERSIFICATION 8.1 Product Diversification 8.2 Related Diversification 8.3 Unrelated Diversification 9 Ethics 9.1 Business Ethics

9.1.1 Anti-corruption,Anti-Competition and Anti-bribery 9.1.2 The Environment, Health and Safety Program 7.2.2 Workforce Diversity 7.2.3 Commitment to the Community 10.0 CORPORATE CULTURE 10.1 Strong Culture 10.2 Weak Culture ii

Strategic Management of Totalgaz (Bangladesh) 10.3 Workforce Divercity 10.4 Commitment to the Community 10.5 CSR 11. 0 ORGANIZATIONAL DEVELOPMENT 11.1 Staffing 11.1.1 Putting together a strong Management Team 11.1.2 Recruiting, 11.1.3 Training 11.1.4 Retaining Capable Employees 12.0 Competitive Strategies of Totalgaz 12.1 Alternative Strategy 1: Broad Low-Cost Strategy 12.2 Alternative Strategy 2: Focused Low Cost Strategy 12.3 Alternative Strategy 3: Best-Cost Provider Strategy ………………. 12.4 Alternative Strategy 4: Focused Differentiation Strategy ………….. 12.5 Alternative Strategy 5: Broad Differentiation Strategy. 13.0 Total Quality Management

) 14. RECOMMENDATIONS 15. CONCLUSION

23

24

16.0 Bibliography 17. Appendix

Executive Summary:

Totalgaz is a global integrated oil and gas company. Its operations include upstream and downstream oil and gas activities. The chief areas of its business include oil and gas chain, ii

Strategic Management of Totalgaz (Bangladesh) crude oil exploration, natural gas exploration and production, transportation, petroleum product marketing and refining TOTAL is also active in the chemicals, coal mining, and power generation businesses. It’s the fifth largest publicly traded integrated international oil and gas Company in the world. Totalgaz Bangladesh (Premier LP Gas Limited), is a subsidiary of TOTAL S.A., France. It is in the business of import, storage, and distribution of LPG (Liquefied Petroleum Gas) in domestic and commercial cylinders under the brand name Totalgaz as well as in bulk to industrial customers in Bangladesh. This reports provides a comprehensive insight into the company, including business Structure and operation, key competitors. Financial, strategic and operational factors are considered. The opportunities open to the company are considered and its growth Potential assessed. Competitive or technological threats are highlighted. The term paper contains critical company information business structure and operations, the company history, major products and services, key competitors, Strategic group etc.

List of Figures Figure 1

Organogram of Totalgaz

Figure 2 Figure 3

Totalgaz cylinder Totalgaz Bulk storage

ii

Strategic Management of Totalgaz (Bangladesh)

Figure 4 Figure 5 Figure 6 Figure 7 Figure 8 Figure 9 Figure 10 Figure 11

Industrial life cycle analysis

Figure 12

The Statement of Profit or Loss and Other Comprehensive Income for the Year Ended 31 December 2014

LPG import trend from 2008 to 2013 Market share by Totalgaz % of market share by Totalgaz from 2002 to 2013 Strategic group of Totalgaz

LPG market segment by different company in Bangladesh Five forces model, Michael E porter Value chain analysis of Totalgaz (Bangladesh)

List of Tables: Table 1 Table 2

Growth Potential for Domestic Drug Market Statement of Profit Loss for 2015

Table 3 Statement of Profit Loss for 2013 LIST OF ABBREVIATIONS LPG EBIT EMBA QC QA R&D SOP SWOT

Liquefied Petroleum Gas Earnings Before Interest & Tax Executive Masters in Business Administration Quality Control Quality Assurance Research and Development Standard Operating Procedures Strength Weakness Opportunity Threats

1. Introduction 1.1 ORIGIN OF THE REPORT This report has been prepared as a part of the course completion activity of “Strategic Management” course of the Executive MBA program of Institute of Business Administration (IBA), University of Dhaka. The aim of the paper is to combine the knowledge of the students with theoretical as well as practical understanding on the various issues related to crafting and executing strategies in the organizations to build competitive edge and succeed in a highly competitive market.

ii

Strategic Management of Totalgaz (Bangladesh)

1.2 Objectives: Objectives of this report are as follows: i) ii) iii) iv)

Understand the strategies of Totalgaz Bangladesh with the theoretical understanding developed from the course. Overall organizational strategies of Totalgaz, Its operation, Value chain and positioning in Bangladesh. Create the balanced scorecard and evaluate the strategies of the organization in terms of its achievements. Recommended strategies for the organization for the future.

1.3 Scope: This report give us indication about the strategy of the Totalgaz. The organization its position in the Bangladeshi market, its organogram and others. The report gives us a comprehensive study about strengthening the company’s competitive position with its possible options of defensive or offensive strategy, Red Ocean or Blue Ocean strategy is discussed. In the end section, the diversification strategies, corporate social responsibilities (CSR), ethical practices of Totalgaz, some options of building of the organization capable of good strategy execution and the process of managing internal operations, corporate culture and leadership is discussed. At last, a set of complete recommendations are made in the report.

1.4 Methodology: The report has been prepared from the various sources. Mainly from the various website of the total,Totalgaz Market reports, CSR reports etc. The information has been gathered through some interviews of the high officials of Totalgaz. 1.5 Data Collection Method: Data was collected from the previous papers of Totalgaz. Data was also collected from various online resources of Totalgaz. 1.6

Limitations of the Study.

This report have several limitations: 1) The most important limitation was “time constraint”. Time was not sufficient to complete the study more accurately. 2) Some valuable information could not come out in this report for the reasons of confidentiality.

ii

Strategic Management of Totalgaz (Bangladesh) 2.0 Corporate Profile of Totalgaz 2.1 History and Background of Totalgaz Totalgaz belongs to the Total group. Total is the France’s Largest Corporations and the worlds fourth largest publicity-traded integrated international oil and gas company. Total is commited to meeting the growing demand globally while consistantly acting as a responsible corporate citizen. Total S.A. (TOTAL) is a global integrated oil and gas company. Its operations include upstream and downstream oil and gas activities. The chief areas of its business include oil and gas chain, crude oil exploration, natural gas exploration and production, transportation, petroleum product marketing and refining TOTAL is also active in the chemicals, coal mining, and power generation businesses. Total SA explores, develops, produces and markets oil and gas. It is also engaged in trading and shipping of crude oil and petroleum products. The company operates through four segments: Upstream, Refining & Chemicals, Marketing & Services, and Corporate. The Upstream segment includes the activities of the exploration and production of hydrocarbons and the activities of gas and power. The Refining & Chemicals segment includes activities of refining, petrochemicals, fertilizers and specialty chemicals. This segment also includes the activities of oil trading and shipping. The Marketing & Services segment includes the global activities of supply and marketing in the field of petroleum products as well as the activity of New Energies. The corporate segment includes holdings operating and financial activities. The company was founded on March 28, 1924 and is headquartered in La defense, France. Total Marketing and Services is present in the Asia-Pacific market with a wide range of products and services including retail networks, lubricants, Liquefied Petroleum Gas (LPG), special fluids, aviation and transportation fuels. Operating in over 20 countries, we hire over 3,500 employees from diverse cultures and backgrounds across Asia-Pacific. Total Marketing and Services Asia Pacific is present in the following countries: Australia, Bangladesh, Cambodia, China, Fiji, Tonga, Samoa, French Polynesia, India, Indonesia, Japan, South Korea, Singapore, Malaysia, Myanmar, New Caledonia, Papua New Guinea, Pakistan, Philippines, South Korea, Taiwan, Thailand and Vietnam.

2.1.1 Totalgaz in Bangladesh Totalgaz Bangladesh (Premier LP Gas Limited), is a subsidiary of TOTAL S.A., France. It is in the business of import, storage, and distribution of LPG (Liquefied Petroleum Gas) in domestic and commercial cylinders under the brand name Totalgaz as well as in bulk to industrial customers in Bangladesh. Incorporated in 1998, PLPG started commercial operations in August 2002. It is one of the largest LPG importers in Bangladesh and has developed a dedicated customer base of more than 600,000 customers all over Bangladesh.

2.2 Full time employee:

ii

Strategic Management of Totalgaz (Bangladesh) Totalgaz has a diversity of individual skills, collective experience and expertise in the business sectors within which it operates. The Executive Committee, headed by the Managing Director and CEO, Dennis Michael Cuaycong. In 2015, 17% of executives were women, and to further increase their number while focusing on skills-based criteria. To achieve this, various training courses are offered that help female employees move up the career ladder. The organogram of Totalgaz are as follows:

Figure 1: Organogram of Totalgaz

2.3 Totalgaz Product and Services: 2.3.1 Products: LPG Cylinders: LPG bottled in cylinders is marketed in Bangladesh under the Totalgaz brand in 12kg, 15kg, and 33kg pack sizes depending on the consumption pattern of the end-user. Totalgaz cylinders are manufactured as per international safety guidelines following DOT 4BA & DOT 4BW standards. These cylinders are also approved and certified by the Bangladesh Department of Explosives.

ii

Strategic Management of Totalgaz (Bangladesh)

FIGURE 2: TOTALGAZ CYLINDER AUTOMOTIVE LPG

LPG fuel proves to be a promising alternate energy source in view of emission reduction & economics of operation. Emission from LPG vehicle is similar to CNG vehicle and is superior to that of unleaded petrol. Above all, LPG is most competitively priced as compared to petrol. The approximate cost savings for LPG is estimated to be about 30% as compared to petrol. Totalgaz is the immediate solution to the ever growing pollution on the roads. Recognizing that mobility is vital for economic progress, Totalgaz offers the cleanest fuel, meeting standards for Automotive LPG and protects the health of the environment. Totalgaz dispensing stations are conveniently located to serve you for your fuel requirements. As a pioneer in respecting the environment, Totalgaz is the best fuel for today's atmospheric concerns.

LPG IN BULK: Totalgaz supplies Liquefied Petroleum Gas (LPG) in bulk to industry.

FIGURE 3: LPG BULK STORAGE

ii

Strategic Management of Totalgaz (Bangladesh)

2.3.2 Services Totalgaz offers immediate and hassle-free gas connection right at Customer’s door step. One can avail a domestic gas connection within a day. It has a very good technical services Team. 

Totalgaz can provide various LPG solutions to its customers to meet the fuel energy requirements of any business.



LPG bottled in cylinders is marketed under the Totalgaz brand in 12kg, 15kg, 33kg depending on the consumption pattern of the restaurant.



It provides door to door services in the customer end through its technicians or engineers.



It has a strong service team both for commercial and industrial.

3.0 Strategy overview: 3.1 Vision a) Meeting Energy Demand and combating with climate change. b) Industrial Safety, Environment, Ethical Standards c) Local Social and Economic Development d) Equal Opportunity and Diversity

3.1.1. Analysis of vision statement:

Effective elements  Focused • Memorable • Feasible • Makes good business sense  Future oriented

Short Comings  Generic

3.2 Mission: “Our mission is to responsibly enable as many people as possible to access energy in a world where demand is constantly growing.”

3.2.1. Analysis of Mision statement: A mission statement usually defines current business activities, highlighting boundaries of current business, present products and services and types of customers served. It conveys the below queries to be answered.

ii

Strategic Management of Totalgaz (Bangladesh) The mission statement of Totalgaz answers the three questions:  

Who we are: Energy solutions and service provider. What we do: Supplying affordable energy to a growing population, addressing climate change and meeting new customer expectations Why we are here: to create maximum business value for our customers. Who is satisfied: Energy consumers are satisfied.

 

3.2 Core values: Total’s ethical commitment is based on three core values  

Respect, the source of sustainable, trust-based operations and relations; Responsibility toward others and in jobs;



Exemplary behavior, which underpins the internal and external credibility of actions and initiatives.

3.3.1. Analysis of core values: Core values of Totalgaz define the business in terms of the principles and values that the management and employees of the company follow in day to day life. They provide the bounds or limits of how the management team usually conducts their activities while carrying out the vision and mission. These values enforces the employees to practice high ethical business standards, respect and protect the environment , society and maintain safety, produce high quality products and services for the customers and meet the changing needs and desires of customers. As a result, these values provide economically sound business opportunities for the customers, stakeholders and stockholders of the company.

3.4 Objectives of Totalgaz: 3.4.1 SMART card analysis:  Specific: Total confirms its strategy for profitable growth and its objective to generate net profit of free cash flow in 2016 and also in 2017.  Measurable: Total also plans to raise the output to 1.5 Lakh ton LPG per year by 2018.  Achievable: Forward-looking information and statements included in objectives are based on a number of economic data and assumptions made in a given economic, competitive and regulatory environment- thus its achievable for Total based on the assets and expertise.  Realistic: Total‘s extensive expertise in production and exploration techniques and extremely high standards ensure safe, effective management of its operations. Mission or Vision is very realistic not ambiguous. TOTAL also set their vision which is realistic and achievable.  Time: The entire Group has been mobilized to contribute to a sustainable cost reduction program. The Group also announced a major program to reduce operating costs by utilizing the time.

3.5 The business model of Totalgaz 3.5.1 Value proposition of Totalgaz: ii

Strategic Management of Totalgaz (Bangladesh) Totalgaz is constantly working towards the promotion of LPG as a safe and efficient fuel.. Totalgaz is providing the best quality cylinders in terms of price. Safety is the top priority of the Totalgaz. The Totalgaz team is supported by experts from around the globe and this is made possible by the Total networks, through international audits, conferences and exchanges.

3.5.2 Profit formula of totalgaz: The Statement of Profit or Loss and Other Comprehensive Income for the year ended 31 December 2013 of Totalgaz is shown in figure 12 below. It indicates that the company’s Net profit has increased from …….. taka in 2012 to ……. taka in the year 2013. The Statement of Profit or Loss and Other Comprehensive Income for the year ended 31 December 2015 shows that in 2015 the net profit is …….. and in 2014 it is ……...

Figure 15: Graphical View of Selected Growth Indicators (Source Annual report of 2015 , 2014 and 2013)

3.60 Balanced scorecard: The Balanced Scorecard was originated by Drs. Robert Kaplan (Harvard Business School) and David Norton as a performance measurement framework. The balanced scorecard is used extensively in business and industry worldwide to align business activities to the vision and strategy of the organization. It helps a company to achieve its financial objectives by linking them to specific strategic objectives derived from company’s business model. MFG’s balanced scorecard can be depicted as follows:

Financial Objectives  

Strategic Objectives

Market growth is 16% for the year. Profitability $ 275/MT LPG



Balanced Scorecard Outcomes 

Improved business process.



Customer satisfaction and loyal customer.

ii

Market size will be double.

Strategic Management of Totalgaz (Bangladesh) 

Improved quality perspective and ensuring highest safety to the products.

3.70 Strategic Intent : A company exhibits strategic intent when it relentlessly pursues an ambitious strategic objective, concentrating the full force of its resources and competitive actions on achieving that objective. Totalgaz have following strategic intent: 1) Totalgaz strives, above all, the most to secure and safe energy solution to the customer. They value their social obligations. 2) Totalgaz strives for best compensation to all the employees, who constitute the back-bone of the management and operational strength of the company through a pay-package composing salary/wages, allowances, bonuses, profit participation, leave salary and superannuation and retirement benefits. 3) Safety is the main concern for Totalgaz. It always wants to ensure highest safety in the LPG cylinder. 4) Totalgaz try to understand their client’s needs; to fit in with their competitive advantage. Its various range of the product serves different needs of different segment’s customers. 5) Totalgaz understands the real-life issues that the customers face. The company recognizes that whatever be the problem, it usually needs a team effort to implement the solution.

6) Safety is a culture and a way of life in TOTAL and all the performance parameters are always viewed through the prism of safety.  Totalgaz accords utmost importance for safety and dedicates significant amount of time, effort and resources in ensuring the safety of all concerned.  

4.0 Situation Analysis: 4.10 External Environment: 4.1.1 Industrial life cycle of LPG industry in Bangladesh:

ii

Strategic Management of Totalgaz (Bangladesh)

Figure 4 : Industrial life cycle analysis Introduction Stage: Product & service development are completed with focus to customer’s diversified requirements. So Totalgaz has already passed its introduction stage. Growth Stage: Totalgaz has developed their retail network through the country. The company has completed their operation in the different locations of the country. So Totalgaz has passed this stage. Maturity Stage: As the distribution network throughout the major parts of the country is already developed, so at this stage the major expansions will be going for value added features, service and new technology adoptions with low cost solutions that will decrease the OPEX for customers. In this stage Totalgaz wants to add different features in its packaging. Actually this is the longest period in the life cycle of a firm, industry, or product, during which sales peak and start to decline. Decline Stage: During this final phase of the product life cycle, the market for a product will start to decline. In Bangladesh declining stage for LPG is still to come.

4.1.2 Industry Development: Bangladesh is amongst a handful of countries in the world that provides natural gas connections to its residential areas. In the midst of this situation, we are running out of our natural gas reserves. In 2013, Platts Energy estimated that our reserves would be exhausted within the next decade, given that no new gas fields are discovered. The government has learned to understand this reality, thus promoting the use of LPG (Liquefied Petroleum Gas) as an alternative to natural gas for residential users. Going forward, policy decisions may even mandate to switch off natural gas connections to residential areas. The import based LPG industry in Bangladesh has started mostly in the span of 1998 – 2002, when Bashundhara, Kleenheat Gas (now Petregaz), Jamuna Spacetech and Totalgaz started their ventures.

ii

Strategic Management of Totalgaz (Bangladesh) Before that LP Gas Limited (under BPC) had been supplying LPG from their Chittagong and Sylhet plants via their distribution companies Padma, Meghna, Jamuna and Asiatic Oil Company Limited. Major LPG Companies in Bangladesh are as follows: 1. Bashundhara LP Gas 2. Total Gaz 3. Laugf Gas 4. Jamuna Sapecetech Joint Venture 5. Bin Habib Bangladesh Limited 6. Super Gas (T K Gas)

Table: 1 Major incidents of Totalgaz and LPG Industry: Time

Incidents

1996

LPG market de-regulated, 6 licenses awarded for LPG import/distribution

1999:

COMEX approves acquisition of 89% share in JV

1999-2002: Sep-2002:

Project implemented with total capex of $15m  2X2500m3 spheres, 1.3km Offshore CBM, 24ktpa bottling Totalgaz last to enter market

2003-2013 2006 2010 2013

CAGR 24.3%, ROACE above 25% since 2009 Become largest importer with 24% market share Becomes market leader and continues to hold leadership position with 25% market Acquires LPG bottling plant assets of Linde

4.1.3 Market Growth: Market to reach 125000t in 2015 (78% IMPORT) where Totalgaz is market leader with 25% share. From 2008 to 2013 there is a rapid growth in LPG market. Current LPG consumption is only 0.6kg/capita.LPG market is impacted by heavy subsidy on NG 96% packed (89% domestic, 7% commercial) and 4% bulk Household penetration approx. 10% (3.3 million consignations).In 2013 the base case market is 100kt which is targeted to be doubles to 200kt by 2020. While, accelerated growth possible - 200kt in 2017; 500kt in 2023.

ii

Strategic Management of Totalgaz (Bangladesh) 530

LPG Market evolution Import Totalgaz

455

Import others Local supply 39 0

Basecase, kt Upside, kt 335

287 252

24 6 205 171

63 39 11 14 14

49 15 19 15

76 18

88 21

98 25

118 108 28

142 121

137 41

195

208

65

18 1

45

49

52

52

58

77

45

67

39

18

19

22

21

22

22

22

56

60

126

137

97

11 5

86

105

77

50

50

50

50

50

50

50

37

32

28

17

168

236 22 1

Figure 5: LPG import trend from 2008 to 2013

4.1.3 Market scenario:

Bangladesh LP Gas market scenario is prospective from now to onwards. Market Growth rate is 20% from 2010. A study said that yearly consumption of LP Gas is 62000 MT, 73000 MT, 87000 MT and 104,000 MT in the years of 2011, 2012 , 2013 and 2014 accordingly and it shows the growth rate is average 20% per year and expected yearly consumption in the year 2015 were 125,000 MT and 2016 it would be 150,000 MT. Considering present situation the market demand is increasing at 20% . For, 2015 market share for Totalgaz was 25%, while market share for petregaz,Basundhara, Jamuna spacetech is 18%, 23%, 12.

LPG Market Share, %

Subsidized 22%

Totalgaz 25%

JSJVL 12%

B'dhara 23%

Petregaz 18%

Figure 6: Market share by Totalgaz

ii

Strategic Management of Totalgaz (Bangladesh)

25

100%

25

Mkt Share, % Totalgaz, kt ROACE, %

21

20

80%

18 17 15

15

60%

15

12

11

10

40%

34%

10 27%

30%

30% 26%

7 5

20%

3 -

0 1%

6%

2002

2003

20%

24% 6%

2005

2006

32% 11%

29% 9%

31%

2008

2009

27%

24%

24%

25%

2011

2012

2013(f)

12% 0%

2004

2007

2010

Figure 7: % of market share by Totalgaz from 2002 to 2013

The current LPG industry in 2015 stands to an approximate of 125,000 MT per annum in which government produces around 22,000 MT locally. All the rests are imported from international market at Saudi Aramco monthly contract price, popularly known as CP. While the government will subsidize their portion of LPG, the other importers will make their products in line with import price. 4.1.4 Strategic Group: A strategic group is a concept used in strategic management that groups companies within an industry that have similar business models. Such groups can usually be identified using two or perhaps three sets of characteristics as the bases of competition. Extent of Product (or Service) Diversity: Totalgaz(Bangladesh) engages in all aspects of the LPG industry, including downstream operations in Bangladesh (marketing and the trading of LPG). TOTAL GAZ Bangladesh: High P G

TG B G

Jamuna Jamuna

Price

Bin Habib

Low Low

Qty of Sales

High

ii

Strategic Management of Totalgaz (Bangladesh) Figure 8:

Strategic group of Totalgaz Bulk Industrial, 630, 4%

Bulk whole , 3070, 20% HF, 437, 3%

12kg, 8595, 57%

450kg, 148, 1% 33kg, 2315, 15%

Figure 9: LPG market segment by different company in Bangladesh

4.2 Internal Analysis: 4.2.1. Pestle analysis: Political: Totalgaz Bangladesh follows Government rules. They do their business in the stable situation. Production affects by the blockade of most of the country‘s terminals due to social and political unrest. As LPG is a flammable product, it is risky to move the products in case of any Turmoil situation of the country. Total always gives importance on Environmental and consumer-protection legislation.

Economical: Global and regional economic and political developments in resource producing regions, particularly in the Middle East business influence on current and project economic growth, inflation and interest rates, unemployment and labor supply. Various Levels of disposable income and income distribution influence on Totalgaz business. The price of LPG is related to the Saudi aramko at every month.

Social: Totalgaz. Supports various social projects contributing to culture, science Population employment patterns, job market freedom and attitudes to work etc. Impact on Total business. Total influences with Press attitudes, public opinion, social attitudes and social taboos. Various Lifestyle choices and

ii

Strategic Management of Totalgaz (Bangladesh) attitudes Socio-Cultural changes impact on total’s business. It introduces the social product Awango Dight in Bangladesh on 2013.

Technological: Totalgaz’s business Impact of emerging technologies. It has a business Impact on Internet, reduction in communications costs and increased remote working Various Research & Development activity also impact on Totalgaz business. Totalgaz has strategic perspectives of new energies, particularly solar. Environmental/Ecological Totalgaz LPG provides environmental friendly fuel. Total maintain about the biodiversity and effective environmental management. Total. is one of the most polluting industries in the world requirements for covering environmental damages and restoration of inactive sites burden for companies. Legal/Regulatory: Subject to stringent environmental, health and safety laws in numerous countries.Laws and regulations related to climate change and its physical effects may adversely affect the Group‘s business. Many of subject to strict legal regulations e.g.; drilling, environmental health and safety protection controls,etc. has impact on Total . Business. Total. follows Code of Corporate Governance. 4.2.2 SWOT Analysis of Totalgaz: Strength: 1. TOTAL is one of the leading marketers in Western Europe and the leader in Africa a certain Middle Eastern countries. Which enables it to be the leading position in Bangladeshi market. 2. High-Tech Machines and expertise. 3. Strong research and development capabilities perceived moderate financial profile risk. Weakness: 1. LPG rate is fluctuating with the Saudi Aramco prices. 2. Bangladeshi LPG Market is quite volatile. So stringent rules of total makes difficult for their business. Opportunity: 1. Energy demand will increase by almost 60 percent with alternative energy in Bangladesh. 2. Government of Bangladesh is encouraging LPG as an alternative fuel. Threat: 1. New entrants are frequent.

ii

Strategic Management of Totalgaz (Bangladesh)

4.2.3. Porters five forces Model:

Figure 10: Five forces model, Michael E porter 1) Threat of Substitute Products Though Totalgaz has a strong market position but the threat of Substitute Products are high. The causes are as follows: 

Natural gas is cheaper than LPG. So if any household or industry get the NG line they will switch from LPG. So in household and in industry NG is a strong substitute of LPG.



Diesel is another substitute of LPG. Its price also very close to LPG.



Octane price has reduced 10% and there is a possibility for further reduction.

. 2) Threat of New Entrants A large number of players operating in a LPG market in Bangladesh . Threat of new entrant is high as our government is encouraging the LPG sector. As a result, price competition has vastly increased among the competitors. In this market the equipment suppliers and service providers are relatively smaller but highly concern about price. LPG infrastructure requires a very large amount of investment. The licensing is quite difficult But this is not going to stop potential new companies from looking into investment options in Bangladesh LPG.So Totalgaz will always face the challenge of new competitor in enterprise market. 3) Industry Rivalry The intensity of competition among the existing competitors in the market is extremely high . Right now only 8 LPG players are in the market. This will be increased up to 30 within 2018. .

ii

Strategic Management of Totalgaz (Bangladesh) 4) Bargaining Power of Suppliers Bargaining Power of suppliers is low in Bangladesh LPG sector because of the below reasons:     

The suppliers are not well organized Number of substitutes are available No product is unique and indispensable at the same time Switching cost, from one suppliers to another, in most cases, is not very high Operators can directly import from abroad.

5) Bargaining Power of Buyers Bargaining power of the buyers is quiteLOw in Bangladesh LPG market because of the following reasons:   

There are many LPG company has been established in the market. Product is not that much differentiated with different additional features Operators/customers are not highly price sensitive but seek for the best quality and services.

4.2.4 Key success factors of totalgaz: Technology Related Key Success factors:       

Totalgaz is providing the High tech give opportunities to Workers are Expertise in a Particular technology Ability to improve production processes Can maintain High Safety. Purchasing new machines to eliminate the last production step know-how and capacity for technological innovation gives competitive edge. Low-cost product design and engineering Access to attractive supplies of skilled workersd from the different part of the world

Distribution-related KSFs  

Totalgaz has a Strong distribution network among the whole country. It has two factories one is in CTG and another is at Bogra, these facilitate to carry the product within a very short time.

Marketing-related KSFs: 

Strong brand and fifth largest publicly-traded integrated international oil and gas Company in the world .  More expansion in the international markets  Fast, accurate technical assistance Skills & Capability-related KSFs:



Industrial and financial performance solidifies our position as a top-tier International Oil Company The development of the business of Total Capital International is largely determined by the financial requirements of the Total Group companies in any country.

Reputation ii

Strategic Management of Totalgaz (Bangladesh) 

Totalgazis internationally acknowledged brands. Good reputation is one of the main criteria’s to evaluate an enterprise’s in the industry. in a very short period of time.

5.0 Strategy making and implementation: 5.1 Strategic Level Analysis: 5.1.1 CORPORATE STRATEGY Corporate strategies address the long-term direction for the organization as a whole. Corporate strategies deal with plans for the entire organization and change as the capabilities of the organization develop and as the environment of the organization changes.Total has four business segments, namely Upstream, Supply and Marketing, Refining and Chemicals and Renewable and nuclear power. Totalgaz devices its corporate strategy consisting of initiatives to diversify into different industries (Upstream,supply and marketing, Refining and chemicals and Nuclear. ). Totalgaz prioritize health and safety in their corporate Strategy. Totalgaz recognize the needs of its clients. Totalgaz strive, on a daily basis, to satisfy and to appreciate its customers. Through a growing network and expertise, Totalgaz endeavor to answer any questions that clients may have. Totalgaz provides an affordable, flexible, cleaner and controllable energy source. Top management has primary decision making responsibility in developing corporate strategies and these managers are directly responsible to providers of capital to the organization,. The role of the governing board is to ensure that top managers actually act to address these owner or primary beneficiary interests. Major decisions of Totalgaz came from the Head office situated at Singapore. Totalgaz is the main brand of LPG distributed by Total Group. Each year, Totalgaz produces, transports, refills and distributes millions of tons of domestic and industrial LPG products worldwide. Totalgaz products are sold in more than 50 countries. In Bangladesh Total gaz Trade LPG from different countries like Indonesia, Malaysia and Vietnam.

5.1.2 Business Strategy Totalgaz’s business strategy concerns the actions and approaches crafted to produce successful performance in the LPG Sector. Orchestrating the development of business-level strategy is the responsibility of the Managing Director (MD) of Totalgaz. Managing Director matched the strategies of the different functional department to the overall business strategies. He also done major business level strategic moves by corporate-level officers (VC of south asia ) and keeping them informed of emerging strategic issues. Totalgaz business strategy concerns the actions and approaches TOTALGAZ, the liquid petroleum gas sales specialist actively participates in every stage of its product distribution chain, from trading from the sheep to customer delivery.The Deliveries unit of the Procurement and Logistics Division is responsible for organizing gas delivery . TOTALGAZ is constantly on the lookout for ways to optimize its organization and thus improve its performance and enhance service quality to the customer.

ii

Strategic Management of Totalgaz (Bangladesh) Enterprise Business group –  Focus on service fulfillment for customers.  Introduction of differentiated products and solutions for customers.  Create and develop skilled distributor, partners and vertical industries. Consumer Business group –  Increase consumer products/ terminals supply in market, introduce new distributor with proper sales management.  Need Brand promotion to improve the brand value of Totalgaz in Bangladesh market.

5.1.3 FUNCTIONAL STRATEGY The functional-area strategies concern the actions and practices employed in managing particular functions or business processes or activities within Totalgaz. The department head of marketing and sales department in Totalgaz represents the managerial game plan for managing the sales and marketing part of Totalgaz. Similarly, the Operation department head performs the managerial game plan for keeping the company's product line up in tune with what buyers are looking for. Following are few of the functional strategies of Totalgaz: 1) Finding ways to enrich human capital and develop fully efficient and productive workforce by necessary training and good recruitment process. 2) Expand the distribution network and find .The suitable regional distribution center. 3) Empower all employees in a participative, cooperative and creative workplace. Make them skillful by different training.

5.1.4 OPERATIONAL STRATEGY 

Developing inventory stocking strategy to a limited extent to meet any unanticipated demand  Add detail and completeness to business and functional strategy Provide an efficient game plan for managing specific project activities with strategic significance. The managers of strategically important activities often key employees are involved with this.  Project delivery within time plan ensuring best quality of engineering management.  Delivering the customer support.  Optimal utilization of Human resource for projects and operations activities.  Strictly monitoring quarterly personal business commitment targets for every employees in order to achieve individual performance goals/targets set by line managers, which also helps to evaluate employee performance keenly.

. 6.0 STRENGTHENNING COMPANY’S COMPETITIVE POSITION

6.1 Offensive or Defensive Strategy. (Offensive) ii

Strategic Management of Totalgaz (Bangladesh)

Totalgaz has adopted ‘Offensive Strategy’ to compete its rivals in all the areas, where it offers products and services. The key offensive strategy of Totalgaz is the differentiation of the product and the innovative solution. Totalgaz offers different size of cylinders like 15 kg for the household customers or 450 kg for the industrial customers. They are providing the innovative products and solutions. They have acquired the Linde Plant in 2013.

6.2 Value chain activities. Totalgaz LPG Traded from other sources like Petredec, Petro Vietnam etc. The trading is done by Total South Asia.

Figure 11 : Value chain analysis of Totalgaz (Bangladesh) .

6.3 Red ocean or Blue ocean strategy: As there are many LPG Company already come to the market. So it is difficult for a technology driven company to find out or created new uncontested market space.So Totalgaz competes in the existing market. At present there are almost 8 LPG companies in the market. There are more than 10 companies are in the pipeline. Here Totalgaz has a market share of 25%, while Basundhara is the nearest

ii

Strategic Management of Totalgaz (Bangladesh) competitors of Totalgaz with a market share of 23%. On the otherhand petregaz and Jamuna spacetech has a market share of 18% and 12% respectively. Here the competition is divided among local and multinational companies.Totalgaz thrives its effort to increase the market share competing with Omera,Basundhara and petregaz. So totalgaz adopts red ocean strategy to the rivals.

7.0 Assessing Competencies.

7.1 Competency: 7.1.1 Quality: All the activities perform within the company ensure the delivery of the products that observe client requirements and statutory provisions to which company has subscribed. Bottled gas is available in a wide range of cylinders to fit any appliance. Totalgaz offer a range of cylinder sizes (12,15,33 and 450 kg), giving the edge in catering for all kind of LPG installations. All of it’s cylinders are protected against corrosion and are subjected to strict safety checks at each refill.Cylinders not only provide energy to industrial and agricultural facilities, public institutions, hotels, restaurants and catering units but are also equally suitable in the home for baking, cooking and heating. Tanks of various sizes are available at Totalgaz and can be made compatible depending on customers’ requirements. The appropriate size will depend on factors such as total estimated gas consumption at peak demand; physical constraints imposed by the site, access to installation and required frequency of delivery. Technical specialists are advising the best option. Totalgaz manages the whole tank installation process from start to finish. These bulk installations are supplied on loan to the customers. Totalgaz remains responsible for all related maintenance and safety procedures. 

7.2 Core Competence 7.2.1 Safety: Totalgaz strongly believes in the slogan ''Safety for Me, for you, for All. This includes all the stakeholders involved in its business including the company employees, contractor workers, transportation agencies, distributors, dealers and customers. Totalgaz considers quality and safety of its products and services as a leading priority along with customer satisfaction. Totalgaz has defined specific safety and technical standards for the storage, transportation and use of LPG by customers worldwide. 

7.3 Distinctive Competencies: ii

Strategic Management of Totalgaz (Bangladesh) 7.3.1 Expert: Totalgaz produce high skilled experts in different areas of its operation.. 8.0 Diversification 8.1 PRODUCT DIVERSIFICATION Product diversification is a continuous process for Totalgaz. Currently it has introduced new cylinder size of 15 KG At 2013 and it introduce 450 KG which is the best solution for industries of medium fuel consumption rate.

8.2 RELATED DIVERSIFICATION Related diversification strategy involves building the company around businesses where there is strategic fit with respect to key value chain activities and competitive assets. Strategic fit exists whenever one or more activities constituting the value chains of different businesses are sufficiently similar as to present opportunities for cross-business sharing of transferring of the resources and capabilities that enable these activities. Totalgaz does not involve in any related diversification.

8.3 UNRELATED DIVERSIFICATION An unrelated diversification strategy involves entering into new business it increase its earnings. From 2014 totalgaz has entered into a new business that is AutoLPG. Besides it has also entered into solar business from 2013. 9.0 Ethics: Total’s ethics process is based on respect, responsibility and exemplary behavior and is put into effect via our Code of Conduct and participation in various international initiatives. Totalgaz carry out our activities in line with a number of values and principles, which were set out in a Code of Conduct. The Code of Conduct serves as a common reference document for all Total employees. In 2014, it was revised to strengthen the Group’s commitment to the respect of Human Rights.  In the introduction, Patrick Pouyanné reminds that the Code of conduct explains commitments and expectations towards stakeholders and provides guidance for employees and everyone who works on. The Code of Conduct highlights three shared values that guide all our activities: 

Responsibility



Exemplary behavior

The Code of Conduct clearly defines the ethical principles to be applied by Total employees in both dayto-day decision-making and in their dealings with stakeholders.

ii

Strategic Management of Totalgaz (Bangladesh) 9.1 Business Ethics Total’s strict adherence to the core values of respect, responsibility and exemplary conduct enables to build healthy, long-term relationships with its stakeholders, based on mutual trust. We also believe that a robust ethics process drives sustainable, responsible growth. TOTALGAZ conducts business in a socially responsible and ethical manner. The company respects the law, support universal human rights,protect the environment, and benefit the communities where they work. Listening, mutual support, crossfunctionality and boldness are values share delivery day by all Total employees. 9.1.2 A NTI-CORRUPTION

AND

ANTI-BRIBERY PROGRAM

10.1 C ORPORATE CULTURE Organizational culture is the collective behavior of people that are part of an organization. It is also formed by the organization values, visions, and norms, working language, systems and symbols. It includes beliefs and habits. Organizational culture affects the way people and groups interact with each other, with clients, and with stakeholders. The Corporate Culture of Totalgaz involves ethical standards within a corporation, as well as managerial behavior towards business and people.

10.2 STRONG CULTURE AND W EAK CULTURE 10.2.1 STRONG CULTURE Strong culture is said to exist where staff respond to stimulus because of their alignment to organizational values. In such environments, strong cultures help firms operate like well-oiled machines, cruising along with outstanding execution. Salient characteristics of Strong Organizational Culture include:  Have a greater influence on employees  Organizational value are deeply held and widely shared  Employees are more loyal to the Organization  Higher organizational performance as employees know what they are supposed to do and what is expected from them  Culture conveys consistent messages about what’s important



Most employee can tell stories about company history/heroes. Totalgaz has strong culture .

10.2.2 WEAK CULTURE: ● ●

Lacks values and principles that are consistently preached or widely shared. Has few or no traditions, beliefs, values, common bonds, or behavioral norms.

ii

Strategic Management of Totalgaz (Bangladesh)

10.2.3 W ORKFORCE DIVERSITY The workforce diversification of this organization is up to the mark. Totalgaz has a mission to provide its employee a diversified job responsibility. 10.2.4 Commitment to the Community This organization has sponsored lots of social and voluntary event like community Kitchen, dissemination of up dated technical knowledge which contributes to the development of the society. 10.2.5 CSR Corporate Social Responsibility (CSR) is at the heart of our business and it is a primary concern both for Totalgaz and for its stakeholders. Totalgaz has new dedicated CSR website, Sustainable Performance, will be gradually updated through till the end of the year.he website is focusing on all of the CSR and sustainability issues we deal with, including safety, climate change, environmental protection, ethics, human rights, community engagement and supply chain management. The Sustainable Performance website currently contains our:  

Related policies, information on our initiatives; Performance indicators;



Responses to environmental, social and governance (ESG) reporting standards available to the public.

11.1 Staffing: 11.1.1 Putting together a strong Management Team: Having an effective and strong management team helps an organization to create a more efficient and capable business. Concentration of capable management team is the cornerstone of any organizationbuilding task. Thus, Total South Africa’s management has a diversity of individual skills, collective experience and expertise in the broad-based business sectors within which it operates. The Executive Committee, headed by the Managing Director/ CEO, Dennis-Michael Cuaycong, is responsible for implementing Board directives; for steering the company towards meeting its strategic objectives and carrying out the day-to-day business. Managing Director

ii

Strategic Management of Totalgaz (Bangladesh)

General Manager (Operation)

General Manager (Marketing & Sales)

Head Of finance & Corporate affairs

Head of Safety

Head of Logistics

Figure 12: Executive committee of Totalgaz 11.1.2 Recruiting, TOTAL has recruited qualified staff and can thus meet the needs of future projects in the region and staff dedicated in development activities. Recruited people are highly qualified and dexterous. Men and women of all backgrounds from all around the world who help to move forward each day operations. The Human Resources department manages all processes relating to employee administration and wellbeing.It also works in partnership with business in aligning HR strategies with business strategies, and in identifying and executing all employee-related activities that are implemented by these strategies. The vision of the HR department is to provide a service that is effective, professional and empowering. Totalgaz recruitment policy ensures that the requirements of Bangladesh latest labor legislation and fair labor practices are met. 

11.1.3 Training: TOTALGAZ industry takes full responsibility for the products it provides. It has teams specially trained to operate service activities and to hold maintenance training and courses for both internal and external partners. This is how Totalgaz guarantee for the long-term service life of it’s products. Periodic safety training is imparted not only to its employees but also other stake holders such as customers, distributors, dealers and transporters. Totalgaz is present in various business segments spanning the entire spectrum of the society.  Be it domestic use or commercial/industrial use, safety of the users is always the primary concern and focus of Totalgaz. Safety booklets for domestic users, defensive driving training, manuals for operating procedures, Safety training at customer premises, safety-boards etc are few of the examples from a wide range of safety related activities of Totalgaz done on a regular basis. The training areas in various business segments are identified on a continuous basis and systematic training is provided by domain experts as well as external faculties for all identified trainees. 

11.1.4 Retaining Capable Employees. Totalgaz considers the employees as important resources that provide competitive advantage to the organization. So, Totalgaz always emphasis on assembling strong management team and ii

Strategic Management of Totalgaz (Bangladesh) subsequently providing them training, retraining and other benefit to retain them. As part of its day-to-day routine, Totalgaz implement numerous measures to support the hiring and retention people. 12.0 Competitive strategies of Totalgaz In the LPG industry, different company devised different basic competitive strategy option. Most of the local company provide focused low-cost strategy, while large company like Omera, Petregaz provide broad low-cost strategy. Totalgaz practices a mix of differentiation and broad differentiation. All the basic competitive strategies with its merit and demerit with Totalgaz are stated herewith.

12.1

Alternative Strategy 1: Broad Low-Cost Strategy.

Totalgaz doesn’t operate in broad low cost provider strategy, as this category is for a broad cross-section of the market and the success largely depends on the ability to give the lower overall costs than the competitors. Since Totalgaz is proioritize safety most,LPG production needs huge investment in machineries, equipment, technology etc., economies of scale cannot be obtained in many of the cases.. The marketing emphasis in this case is to try to make a virtue out of product features that lead to low cost; which doesn’t match Totalgaz capabilities. As such, Totalgaz doesn’t follow the broad low-cost provider strategy.

12.2

Alternative Strategy 2: Focused Low Cost Strategy.

Totalgaz doesn’t operate in focused low cost provider strategy, as this category is for a narrow market niche, where buyer needs and preferences are distinctively different and the success largely depends on the ability to provide the lower overall cost than rivals in serving niche members. Since, Totalgaz is one of the largest LPG companies in Bangladesh, they cannot target a niche market segment in many of the cases. Also the production emphasis in this case is a continuous search for cost reduction while incorporating features and attributes matched to niche member preferences; which may not be possible in many cases. As such, Totalgaz doesn’t follow the focused low cost strategy.

12.3

Alternative Strategy 3: Best-Cost Provider Strategy.

Totalgaz doesn’t operate in best cost provider strategy, as this category is for the value-conscious buyers and the success largely depends on the ability to give customers more value for money. The marketing emphasis in this case is to either deliver comparable features at a lower price than rivals or else match rivals on prices and provide better features; which doesn’t match Totalgaz products. As such, Totalgaz doesn’t follow the best cost provider strategy.

12.4

Alternative Strategy 4: Focused Differentiation Strategy.

Totalgaz doesn’t operate in focused differentiation strategy, as this category is for a narrow market niche where buyer needs and preferences are distinctively different and the success largely depends on the ability to provide attributes that appeal specifically to niche members. Since Totalgaz is one of the largest LPG companies in Bangladesh, they cannot target a niche market segment in many of the cases. The

ii

Strategic Management of Totalgaz (Bangladesh) marketing emphasis in this case is to communicate how product offering does the best job of meeting niche buyers' expectations; which doesn’t match Totalgaz’s requirements. As such, Totalgaz doesn’t follow the focused differentiation strategy.

12.5

Alternative Strategy 5: Broad Differentiation Strategy.

Totalgaz has always played a pioneering role in adopting modern and innovative technologies in its production. The Company has created strong differentiation by offering technology-driven, specialized delivery systems. So, Totalgaz is always keen to differentiate its product. Totalgaz has chosen broad differentiation strategy as their generic competitive strategy, as this category is for a broad cross section of the market and the success largely depends on the ability to offer buyers something attractively different from competitors. Since totalgaz is continuously focusing on innovation, differentiation and diversification of products for a broad cross section of customer segments including the customers, this strategy is the best fit for them. As such, broad differentiation strategy is the best suited strategy for Totalgaz.

12.6 Total quality Management: Totalgaz cylinders are manufactured as per International safety standards following DOT 4BA & DOT 4BW guidelines under direct supervision of internationally-renowned inspection companies. These cylinders are also approved and certified by Department of Explosives, Bangladesh. The manufacturing units of cylinders are selected based on a detailed technical evaluation process certified by Totalgaz France. In addition to the above, every cylinder refilled in the bottling plant is retested for quality as per standard operating procedure before dispatch to the market for the safety of the end user. 13. Recommendation: There are few factors which need to be highlighted for company‘s sustainable growth. Which are

Maintaining ethical business conduct through upholding human rights, preventing corruption and fraud, promoting free competition, promoting financial transparency, respect for people.



Innovation and introduction of eco-friendly technologies to comply with environmental regulations.



Ensuring transparency in operational excellence in management system (OEMS).



Marketing strategies for renewable energy through CSR.



Create product awareness through promotion for products to reverse its constant revenue fall.



Increase Product ranges and variations must communicate to end user from competitors.



Enter Autogaz segment with comprehensive development plan



Ongoing strategic investment program necessary to retain market leadership position, new market/segment penetration and logistics synergy.



Supply Chain efficiency should be increase.

14. Conclusion: ii

Strategic Management of Totalgaz (Bangladesh) Bangladesh is relatively new and rapidly growing LPG market with strong upside potential especially due to increasing shortage of natural gas Current annual per capita consumption only 0.6 kg is expected to increase to over 2kg in 10 years time. Totalgaz is the market leader with 25% share with strong growth (+16%) and profitability ($264/t). To the city dwellers the term “LPG” is yet to make any impact as our natural gas pipeline is still well functioning. However, moving towards the imminent future – the NG supply forecast looks gloomy and LPG is positioned as the only viable alternative. The challenges are multi-faceted in this important juncture of time. It starts from inadequate safety rules, proper guidelines for operations, fixing proper duty & tax structure, supply of LPG, MRP of LPG/autogas, underdeveloped infrastructural facility and not to mention – the inferior industry practices. Also phasing out of existing subsidy and connecting all energy prices with global price is a major task ahead.  What will matter more in coming days are government policies to professionally develop this sector. And that is why the role of government must be well pondered. For safety and other issues Totalgaz is the pioneer in the LPG sector in Bangladesh.

ii

Strategic Management of Totalgaz (Bangladesh) 15. BIBILIOGRAPHY: Totalgaz (2015); Annual Report 2013,2014 and 2015. Boyd. W, Westfall. R, Stasch. F (1990); Marketing Research, Richard D. Irwin Inc. USA; 7th edition. Cameron G. (1998); “Innovation and Growth: a survey of the empirical evidence”; Nuffield College, Oxford, OX1 1NF, UK, July 1998. Arthur A. Thompson,Jr.,Margaret A, Peteraf (2015);Crafting and Excuting Strategy;18 th Edition. http://www.total.com.bd/total-in-bangladesh/total-marketing-servics-asiapacific.html www.total.com.bd

ii

Strategic Management of Totalgaz (Bangladesh)

Appendix

Totalgaz Business segment

ii