Posted at 12.17.2018
In the entire year 1993, Russian Joint Stock Company Gazprom was created that was a significant change done by the state of hawaii Gas Company, Gazprom. In 1998, the RAO Gazprom was again designed into an Open Joint Stock Company (OAO) Gazprom with the aim of increasing the supply of gas and oil throughout the world. Gazprom is identified worldwide as a worldwide energy company that has major concentrate on the geological creation, exploration, storage, handling, marketing and transportation of gas and also other hydrocarbons and creation and distribution of electric power and temperature energy ("Gazprom Today", 2012).
Gazprom is the world's richest natural gas reserve holder and it includes show of 18% and 72% in its global/international and Russian gas reserves' market respectively ("Gazprom - Joint Stock Company", 2012). Gazprom accounts for about 15% and 78% of the gas outcome in its global and Russian market segments. Currently, the company is actively employing large-scale ventures that are aimed at the exploitation of various gas sources of the Arctic Shelf, Eastern Siberia, Far East and Yamal Peninsula combined with the abroad jobs that are targeted at the exploration and production of hydrocarbons in the international market (Pankratov, 2011).
Gazprom is the most dependable and trustworthy dealer of the gas to foreign and Russian consumers. It's been mentioned by Karasevich (2009) that the company is using the most significant gas transmitting network among all the companies working worldwide which is the United Gas Source System of Russia the gets the amount of about 161 thousand km. The business has reported to be selling more than 50% of the full total gas produced both to the consumers in Russia which is exporting it to more than thirty countries within and beyond your previous Soviet Union.
In Russia, Gazprom is the only real producer and exporter of LNG (Liquefied GAS); in the global LNG market, the company's output is located at 5% ("Gazprom Today", 2012); it is probably the largest five companies of olive oil in Russia. It really is even the largest possessor of the power generating assets in the region which makes up about about 17% of the complete capacity that is installed for the energy system at nationwide level.
The mission of Gazprom is defined as "to be the reliable, well balanced and efficient provider of the gas in addition to various energy resources combined with the company's derivatives to the consumers" ("Gazprom Today", 2012). The proper objective of the company is to determine itself as the leader among all the international energy companies by means of getting into new markets, making sure diversification of its activities and expanding cordial and dependable relations with the suppliers. According to Gazprom Today (2012), the goals of the company are the following:
To raise the fulfillment of energy needs of Russian market by stabilizing the business activities.
To improve the transformation network of the gas market at domestic level.
To undertake initiatives that will reform the sector to make it a stylish and potential market for investment purposes.
To widen the role in international market by following a proper diversification strategy.
According to Griffiths (2010), the primary aim of the company's energetic and well-integrated strategy is to ensure that there is uninterrupted supply of the gas to all or any consumers present in the Russian market and ensure strict procedures are carried out for gratifying every intergovernmental contract along with exporting agreements. The primary goal of the strategy is enhancement of the company's market value by making certain the organization management is productive and the commercial activities are effective and profitable as well.
As of Dec 2011, the full total number of individuals employed in Gazprom is about 404. 4 thousand; 58% are personnel, 25% are experts, 13% are managers and 4% are other employees ("Gazprom - Joint Stock Company", 2012). Like all large businesses, the organizational structure of Gazprom experienced to endure various developmental phases such that it had a corporate structure appropriate for its business operations which allowed it to remain competitive efficiently in both local and foreign markets.
On regular basis, the corporate framework gets reformed for the purpose of improving the company's functional activities. The first period of the organization reform was aimed at enhancing three aspects of the mother or father company i. e. regulatory steps, techniques of management and system of producing and applying the budgets ("Gazprom in Russian Markets", 2012). When the phase one was effectively completed, the stage two was placed into the process; the principal purpose of the next phase was improving the company's efficiency as a company that is included vertically and making certain the core framework of business management is streamlined to its all subsidiaries.
During the attainment of these objectives, the whole individual activities were centered on the particular wholly owned subsidiaries of the company (Balashov, 2012). Currently, Gazprom is described as an enormous vertically built in energy firms multiply around the world; it is rolling out its subsidiaries so that it is capable of doing important functions including the exploration, storage, transport, processing, distribution, development and marketing of the gas ("Strategy", 2012). Along with natural gas, the business is involved in the exploration, creation and refinement of the gas condensate and crude oil. Presently, Gazprom is functioning its business operations through five valuable segments that comprise of Exploration and Development, Refining, Marketing, Electric Power and Transportation and Storage ("Gazprom Today", 2012).
Gazprom has focused its operations in accordance with certain requirements and guidelines of the Russian Federation and has spanned its procedures in the form of network that is branched out to about 1, 600 fuel stations in former Soviet Union, Russia and even on Balkans. The operating locations of the business consists of Belarus, Switzerland, China, Russia, Ukraine, the united kingdom and among other places ("Gazprom in Foreign Markets", 2012). To be able to further its corporate and business governance system, the company is aiming to reform its structural transparency as well as visible identity of the company both in Russia and international market. The subsidiary name now gets the father or mother company name i. e. Gazprom.
The primary goal of the business is to give attention to the execution of its projects by ensuring maintenance of long-term interactions with the constituents of Russia. The development strategy of the business is to ensure which it has strong and abundant platform of resources which has a branched infrastructure for transmitting; it has goal of building up its occurrence in its market by development of new marketplaces along with appropriate diversification of its various business activities (Pankratov, 2011).
In order to ensure that the business's business activities were aligned properly with its mission and strategic aims, Gazprom has undertaken pursuing steps to achieve its explained goals:
Improving the way to obtain gas to the Western european consumers - To realize this objective, Gazprom has started entirely new projects of the gas transmitting i. e. South Stream and Nord Stream; it is allowing the company to ensure both the diversification of the Russian export routes of the gas and ensuring the ultimate dependability of gas equipment to every consumer in European countries.
Developing to make it a wonderful place for investment - To be able to broaden further in the LPG market, the business is implementing a phased strategy so that it can extend its business geographic boundaries. In Feb 2009, the first Russian LNG flower was inaugurated in Sakhalin and its own area sales totaled about 6. 3 million plenty i. e. 9. 2 cm3 in the period of 2005-2011.
Enhance the transmitting network at the local level - In order to have a well-developed transmitting network, Gazprom has inserted into various alliances with top-ranked companies in the power and essential oil sector within the united states. In Autumn 2010, the gasification of Kamchatka was initiated when the Sobolevo-Petropavlovsk-Kamchatsky gas pipeline was started out as an intrinsic factor of its Eastern Gas Program. Even in Septmber 2011, Gazprom completed the development of its Sakhlain-Khabarovsk-Vladivostok trunkline of gas which is the first inter-regional transmission gas system in East region of Russia.
Follow a well-integrated diversification strategy - The Russian Federation offers support to Gazprom for reliable coordination and execution of the company's Development Program for making sure a highly effective integration of most methods for the creation, supply and transport of gas in the Far East and Easter Siberia along with taking account of the potential exporting of gas to China and Asia-Pacific countries.
Strategic projects - In order to diversify in international and local marketplaces, it has carried out some strategic tasks such as exploitation and usage of the hydrocarbon procedures in Central Asia, development of gas transmitting system in Russia, Eastern Gas Program, development of resources for Yamal Peninsula, development and exporting of LNG, exploitation of Arctic shelf resources in Russia, development of international hydrocarbon fields and expansion of gas transmitting system in Central Asia Centre (CAC).
After examination of the company's mission, strategic goals, organizational framework, management composition, business activities and development plans, it can be stated that the business is well-aware of its reputation in the market and has made certain it has all the mechanisms in place that will provide it support in the attainment of its business aims. Relating to Lewin et al. (2007), the eye-sight and mission declaration are the guiding concepts of a business that help it in creating a strategy which will ensure that the resources are effectively utilized and everything within and outside the group is well-integrated and coordinated.
When the business recognized that it was having incorrect management structure and there is misalignment between Gazprom's perspective and business activities in early 1990s, the organizational composition was completely revamped. Since there is no relationship between your parent company and its own subsidiaries, the name of the subsidiary companies were reformed that included the name of Gazprom so that there is an association between your firm and its own sister companies.
In the last few years, there may be strong emphasis on the environmental activities this means the cover of ecosystem by executing activities that aren't hazardous for the natural atmosphere. Gazprom recognizing its responsibility towards the environment, it has implemented Broad Environmental Program that means that all procedures of the company are within the honest code of business carry out so that the environment will not get damaged and is safe and secure for the people as well.
The main rivals for the business are Sidanco Oil, Statoil Energy, Tatneft, OAO Lukoil, BP Amoco PLC, Gasunie, Yukos and Sibneft. To be able to compete successfully in the market and ensure conformity with its mission and strategic targets, the business has ensured it conducts its examination on an ongoing basis. It even reviews its performance on repeated basis by conducting studies on the customer's satisfaction level and new needs so that it can form and target new marketplaces.
When none of its competitors identified the actual in LNG market, Gazprom decided to enter such a dangerous and new market; it could successfully meet the demands of this market internationally as it acquired conducted proper market survey. In order to ensure that it is able to successfully supply natural gas in an satisfactory manner, it is expanding new routes, gas pipelines, transmitting systems and international agreements so that the company is able to enter into new marketplaces effectively. The gas way to obtain Russian gas to EU through Nord Stream has started from the month of November in 2011.
The company has began the preparations because of its Shtokman field project which is in the first period of development project in the Barents Sea. This project can be the resource foundation for the gas export market of Russia to European countries through the Nord Stream. Gazprom has allocated the quantity of RUB 37. 66 billion to have significantly more ventures in the Russian locations. The company's Gasification Program is likely to include about sixty-nine parts of the Russian Federation that comprise of Eastern Siberia regions along with the Far East for the execution of the Eastern Gas Program.
In order to ensure compliance with both the Russian and international legislation of environment, Gazprom has ensured that of its business activities are compatible with the respective laws so that their operations are effectively coordinated and well implemented. It has even carried out its Environmental Plan that has its basis on the conservation of resources, security of climate and optimum alleviation of the negative influences of environment.
After careful review of Gazprom from the quest of the business to its business operations, it could be concluded that the company has designed an effective and well-integrate strategy that is developed in consensus with the strategic objectives that the business wants to realize. Gazprom has been leading the Russian market for decades and is making certain every mechanism is at place to have proper positioning with its stated purpose i. e. to be the global innovator in the power industry by ensuing appropriate and continuous way to obtain gas within Russia and across the globe.
In order to boost its work in attainment of its tactical targets, the management team is making necessary reforms within its business businesses. The business is well-aware about the target that it would like to achieve and has recently considered important initiatives to ensure that the organization handle all disruptive factors ahead of time such that it can effectively prosper in its industry.