Valero Energy Corporation's Strategy

Valero Energy Corporation's Strategy
Executive Summary
The report caters analyzed Valero’s strengths, weaknesses, opportunities, and threats and discusses relevant strategies based on which the recommendations are proposed. It is analyzed that the business has strong automation of activities, distribution network, brand portfolio, and product innovation. However, the business lacks a product range and requires more investment in technology, research, and development. The company has an opportunity to expand its business roots in Asian markets; however, it might face severe issues like currency fluctuation and isolationism trends, which need to cater to before. Valero is recommended to make two significant changes expand in the Asia Pacific region and merge with small industrial companies.
Valero Energy Corp
Introduction
The report provided a great opportunity to analyze the key industry trends businesses could focus on improving their competitive position and go with the industry flow. Valero took over the refining and marketing assets of the original company and soon became the largest independent petroleum refiner and marketer in the world (Valero, 2022a). The report caters to Valero’s strengths, weaknesses, opportunities, and threats and discusses relevant strategies and plans for the business based on which the recommendations are proposed to the company’s CEO. The industry’s trends were beneficial in assisting the business in analyzing opportunities and threats to Valero. It further has elaborated the business’s strategic intent and financial objectives, based on which recommendations are provided to the CEO.
Industry’s Trends
There is robust growth in the oil & gas industry globally throughout 2021 and 2022. This rebound has been driven by many factors, including strong global economic growth, increased demand from China, and production cuts from major oil-producing countries. These factors have contributed to tightening the global oil market, which has helped push prices. The oil and gas industry is expected to continue to benefit from strong global economic growth and increased demand from China. These trends are expected to help keep oil prices elevated soon (Maloney, 2021). However, several risks could undermine these positive trends, including a potential global economic growth slowdown, renewed US oil production increases, or price drops in other key markets.
Three oil & gas industry trends are high oil prices which have boosted the energy transition plans where prices are $98.04/bbl after a decline in July 2022 (Market Watch, 2022). The second trend is mergers & acquisitions, which follow oil prices below pre-pandemic levels. The companies with net-zero goals acquire low-carbon intensity barrels to support ESG goals. The third trend is that business models are shifted to enable a new energy era in shifting the scale of O&G revenues and spending. Hence, businesses have opportunities to lead the way for customers in oilfield services and industries. The sector needs to be lean and green (Deloitte, 2022).
Company’s Strategic Intent
In January 2017, Valero agreed to pay a $2 billion penalty for violating US sanctions against Iran between N...