Business Scenario Part 2 – Decisions in Paradise Expanding Chevron’s Business Presence in Kava
Marian Folds
Mgt350 / Nicole Baum
University of Phoenix
January 5, 2009
Expanding Chevron’s Business into Kava – Part 2 As discussed in Part 1, Chevron Asia Pacific is investigating expanding its energy business to the island nation of Kava. Kava is of significant size and located near the Cook Islands off the coast of Australia. This country has recently been overwhelmed by a series of natural disasters that have left the people, the environment and the country’s economy in a state of emergency. Chris Morales, founder of Chevron, requested a feasibility study on the potential for expanding Chevron’s business presence in the country of Kava. Part 1 of the study explored issues associated with an increased presence in the country and how Chevron, its key stakeholders and the country of Kava would benefit from such a move. Part 2 will propose suggestions for expanding Chevron’s presence in Kava, using the decision-making techniques and tools available on the Chevron Project Development and Execution Process web site. The tools chosen for this business scenario are SWOT analysis and the Six Thinking Hats method. Problems Identified in Kava The problems identified in Part 1 of this business scenario include extreme structural, environmental, and economic damage to Kava by several natural disasters. In addition, Kava has the potential for repeated natural disasters such as typhoons, earthquakes and floods. Diverse ethnicity, religion and languages in the country present problems of difficult communication and gaining cooperation of the citizens, as well as providing the potential for terrorist attacks from inside and outside the country. Finally, since half the population of Kava is under the age of 15, Chevron may face problems with unskilled labor and lack of available engineers and scientists on the island. Opportunities in Kava The Kava government owns oil and natural gas fields which have been highly profitable for the country and have offered to join in a drilling and exploration partnership with Chevron Asia Pacific. Since production and transport of oil and gas has been adversely affected by the natural disasters, Kava needs Chevron’s help in returning to and sustaining its oil and gas productivity. The government does not possess the latest technology for extracting these elements from the ground, nor do they have the professional engineers and scientists available to help them make the advances needed to implement new technology. Chevron is working towards expanding its presence in geothermal energy, which is a source of renewable energy much in demand worldwide. Geographic surveys in Kava show that its earthquake and volcanic activity indicate excellent sources of geothermal energy, which can be pumped out of the ground and used to produce electricity and heat for island structures. Decision Making Tools Used in Finding Solutions In developing a proposal with solutions to the problems facing Chevron in its expansion, several decision making tools were used. For the purposes of this study, the SWOT analysis and the six Thinking Hats methods were used. The SWOT analysis uses a series of questions to determine strengths, weaknesses, opportunities and threats to a given scenario. The analysis can be done using questions and writing answers or by using the SWOT worksheet, which works well in a group situation. Below is a SWOT analysis for possible expansion into Kava, in worksheet format. SWOT Analysis for Kava Expansion
|Strengths (Internal to Chevron project) |Weaknesses (Internal to Chevron Project) | | | | |Chevron is the best at developing oil and natural gas fields onshore |Chevron does not own or