Strategic position and options for JP Kenny London

Strategic Management: JP Kenny London

JP Kenny London was "established in 1978 as the original office of the now JP Kenny group, the London office has amassed over 30 years of experience in executing pipeline and subsea projects for clients around the world" (J P. Kenny Ltd. 2011). Its meager beginnings in 19th century roots in the fishing industry have spawned into a multi-billion dollar organization, providing major energy resources.

This report examines the current strategic position of JP Kenny and the strategic options for the future of JP Kenny. By using the (PESTLE) Political, Economic, Social, Technology, and Environmental factors affecting JP Kenny, an assessment of opportunities, threats, strengths and weaknesses may be ascertained. Hence, such findings demonstrate the direct influence on JP Kenney's sustainability.

JP Kenny experiences a shortage of qualified engineers within the United Kingdom. To overcome this JP Kenny source engineering staff from around the world. Furthermore, JP Kenny has a skilled workforce in which these skills are transferable and can be used to explore the renewable energy industry.

Research of new and innovative technologies is of great magnitude within the industry, and JP Kenny will need to continue to research and to upgrade their technology to remain competitive. Therefore, research and technology will aid in its strategic capabilities in which JP Kenny is continually developing and evolving expertise in areas that add value to its customers.

Sustainability is critical to ensure continuous delivery to valued customers, as indicated in Exhibit A. Many customers have come to rely on JP Kenny's presence and contribution in the energy industry. With numerous awards and accolades, JP Kenny's relentless pursuit of excellence will undoubtedly fuel its key capabilities in offshore renewable services, thus delivering value through proven processes and technologies.

Strategic Management: JP Kenny London

JP Kenny London office has amassed over 30 years of experience designing and executing pipelines and subsea projects for clients around the world. It has evolved from its 19th century roots in the Scottish fishing industry. The Wood family's fishing business began in the 1890s when the family owned a number of fishing boats operating out of the port of Aberdeen in North East Scotland. In 1912, William Wood founded Wood & Davidson, a ship repairing and marine engineering firm to service the fishing fleet. Since, the Wood family's business has developed into a global energy services company employing 14,000 people in 36 countries, with sales of $2.2 billion (J P. Kenny Ltd. 2011). Insomuch, the large diversity of products and services offered by JP Kenny requires its management to have a strong understanding of the external and internal factors that govern its operations. To gain market share vs. its competitors, JP Kenny must assess its opportunities, threats, strengths, and weaknesses, while engaging in strategic options for sustainability. By evaluating such factors, JP Kenny may improve its competitive position in the marketplace.

Opportunities & Threats

To analysis the external environment in which JP Kenny operates, a PESTEL model evaluates external factors, such as opportunities and threats that influence the operations of the London office. Further evaluation is conducted together with Porters five forces model to analyze competition within the industry.

Political Landscape:

Some political realities that must be taken into account when for business operations are trade quotas and restraints, industry subsidies, investment incentives, trade agreements, economic treaties, and bureaucratic processes. Each factors plays a major role in business processes and profitability. The majority of JP Kenny's operations are conducted overseas

(J P. Kenny 2011), leading to an increase in operating costs. When fuel costs increase, the cost of transporting goods increases, as well. JP Kenny depends on political stability in the other countries in which its suppliers operate. Therefore, it is paramount to ensure this stability by keeping a pulse on the economic climate. JP Kenny's presence in overseas markets facilitates its brand management and field expertise. As one of the very few independent subsea and pipeline companies with a global network of activities and involved in all phases of oil and gas extraction from appraisal through to abandonment, JP Kenny is uniquely placed to assist customers to evaluate subsea and pipeline system opportunities.

Moreover, this focus toward globalization shifts most of JP Kenny's operations to major overseas markets.

Economic Conditions:

Economically JP Kenny is affected by the price of oil and gas because of the availability of raw materials. As with other raw materials, crude oil is traded on the world market. Recently, crude oil prices have risen dramatically, driven by rising global demand and political instability in several oil producing countries (Chevron 2011). Crude oil prices are important in determining gasoline prices because crude is the primary raw material used to produce gasoline and other petroleum products. In some cases, the price of crude oil may account for up to half the price of a gallon of gasoline. Insomuch, the western economy for oil and gas is low, which reduces the overall price of such valuable commodities. The organization of the Petroleum Exporting Countries (OPEC) controls the oil market and maintains a stable price, although pricing fluctuates. If the market predicts a shortage of the oil and gas, then the oil companies will look for new supplies. Subsequently, discovering new streams can take many years; however, the most expedient way to discover new streams would be for the oil companies to increase production on existing fields.

JP Kenny depends upon the purchasing power of its customers, and when economic conditions are unfavorable, customers will feel the adverse effects regarding disposable income and credit worthiness. Such changes reduce their ability to purchase the energy resources that comprise a large portion of JP Kenny's profits. Other economic indicators that affect JP Kenny are consumer's spending propensity, unemployment, price indexes, tax rates, consumption patterns, gross domestic product trends, and interest rates. Insomuch, the company's ability to plan equitably across generations and cultures has fostered new development in globalization for the energy magnate.

Social Issues:

Social factors relate to assessing the social, cultural, and demographic aspects. Since Subsea is an engineering and specialised industry, JP Kenny have become aware of the shortage of qualified and experienced engineers within the UK. Therefore, it has great reliance on the aging population for their expertise and experience, e.g. If 5000 engineers retire and only 2000 graduate, the demand for skilled staff will become greater making the shortage within the industry a significant long-term threat. Additionally, "The education system in the United Kingdom is said to be biased towards the arts and pure science rather than applied scientific engineering, and business-type subjects. In the United Kingdom, approximately 30% of engineers have a professional qualification, while in Germany the figure is 70%" (Worthing and Britton page 313). Such trends have social implications that shape the way people live, work, produce, and consume. Such a dynamic society gives JP Kenney the opportunity to be a trendsetter in bridging the educational gap by outsourcing certain competences to long-term sustainability.

Technological Aspects:

Through research, JP Kenny keeps abreast of developments within the industry. JP Kenny utilizes the following methods to research and to assemble information on current innovations and technologies influencing the industry.

Industry Technical papers - These papers are produced after periods of research by engineers from all over the globe, to develop new innovations into the design and construction of pipelines, as well as sharing other technical ideas and experience gained during the design stage of technically challenging projects, where new materials have been used or difficult environments are encountered, such as discoveries in deep water or other environmentally sensitive areas of the world.

Conferences - Where engineers present their papers and discuss their research with other engineers and scientists

Journal articles - Published papers of new innovation technologies

Standard Industry tools - Guidelines issued by governing bodies or independent verification bodies.

Analytical packages - This can be software such as Flowmaster or MathCad.

The above allows for the JP Kenny team of engineers to predict future technological requirements with new developments and concepts of subsea engineering. When JP Kenny is awarded a contract in challenging and extreme environmental conditions, engineers explore and may invent innovative methodologies to overcome the challenge.

Legal Aspects:

To overcome the shortage of engineers, JP Kenny source and employ engineers from around the world. This process is not straightforward and immigration laws can have an impact, as they are constantly being reviewed and changed. If a change is made to immigration law while a visa application is being processed, it can hold up prospective staff's visas for a certain timeframe, reaching up to two years.

Environmental Factors:

Every project JP Kenny tenders for and wins is affected by environmental factors. JP Kenny carries out an environmental impact assessment (EIA). An assessment of the negative or positive impact on the environment can be interpreted as a mini PESTLE analysis on every project. Due to numerous projects beyond the scope of this analysis, the focus is on the current global concerns of global warming and the way in which JP Kenny has transferred their available expertise and technologies to the marine renewable energy sector. Moreover, it has responded to the growing efforts by governments to reduce its carbon footprints in the capture and storage of CO2.

"The European Union has proposed a commitment to generate 20% of its energy from renewable sources by the year 2020" (BBC News 2011). Hence, JP Kenny is committed to supporting this vision, which is demonstrated by Carbon Dioxide Sequestration. This process is the capture and storage of CO2 a solution for reducing greenhouse gas emissions from industrial installations. CO2 is removed from the atmosphere and stored indefinitely. JP Kenny offers clients design solutions for the capturing, transporting and re-injection of CO2 emissions into the ground. JP Kenny is committed to making an active contribution to the emergence of new technologies to meet the challenges of sustainable development. "The energy sector is of great importance to the United Kingdom economy" (Worthing and Britton page 312). Moreover, the marine energy is fast becoming the new form of green energy, and JP Kenny have been awarded a contract, which will create the world's largest wave energy farm 10 miles off the north coast of Cornwall, United Kingdom.

Porters Five Forces

Porter's model illustrates how the structure and an organization's ability for market agility are contingent upon the strengths of the five aforementioned forces. There is a differentiation between competitor's services within the subsea engineering industry, JP Kenny concentrate on FEED (Front End Engineering Design) and detailed design, where as JP Kenny's competitors offer other specialised services including construction. The design and construction of a pipeline is very detailed, and it is not uncommon for a client to split these services according to capability and experience. Hence, this will usually result in a competitor no longer being a threat but a partner. Within the subsea engineering industry, it is a specialised field in which JP Kenny's brand names its primary asset, making this a barrier for new entrants to overtake the existing companies.

Strategic Capabilities -- Strengths & Weaknesses

The strategic capability of a business is concerned with the resources and competences that the organisation uses to provide value to its customers. The unique resources and competencies are the bases upon which an organisation achieves strategic advantage and is distinguished from competitors (Johnson et al. fundamentals of strategy).

Strategic Options & Their Assessment

"Growth Matrix proposed by Ansoff (1957). Products and markets are each analysed in terms of their degree of novelty to an organisation" (palmer & Hartley, The business Environment, sixth edition page 281)

Ansoff's Growth Matrix

Product-development strategy: with the combined skills and expertise of their workforce, JP Kenny can capitalise and use these skills to further