Entrepreneurship Essay Example

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The Abu Dhabi National Oil Company (ADNOC) is an integrated energy company that deals in the storage, distribution, and transportation of refined products. The company
operates in multiple areas of the oil and gas industry (ADNOC 2012). It has
diversified its activities as a result establishing companies and subsidiaries, and establishing integrated oil and gas industry in Abu Dhabi. ADNOC is
ranked among the top ten oil and gas companies in the world. Statistics by the company shows that it
manages oil production of more than 2.7 million barrels each day (ADNOC Group 2012).

The key business areas include storage and distribution of multiple energy products such as Gas Oil, Kerosene, Gasoline and Fuel Oil. It also deals in
storage of Liquefied Petroleum Gas (LPG). Other business areas include storage and distribution of aviation fuel and natural gas for vehicle (NGV), marketing of energy products and
operating service stations (ADNOC 2012). The company core objective is to be the leading sustainable business that is trusted and respected by its customers, stakeholders, and suppliers for the ethics it adopts (ADNOC 2014).

The business approach is built in five areas improving of profitability and reduction of loss in line with the general expectations of the shareholders by increasing revenues (ADNOC 2014). Management of cost relative to company’s growth in order to attain profitable revenues, it is critical for the company to reduce its total cost (Operating Cost + Cost of sales).

It also seeks to ensure responsive and efficient organizational operations to increase the satisfaction of its customers. To ensure this, the company responds to customer complaints effectively. The company strives to maximize the efficiency of critical processes to ensure production of desired quality output at reduced cost. It also ensures zero accidents by avoiding health, safety and environment (HSE) hazards through with international standards (ADNOC 2014).

Entrepreneurial Opportunity

Within the context of ADNOC, entrepreneurship consists of activities that involve the discovery, evaluation and exploitation of oil products distribution and marketing opportunities, as well as means of organizing its workforce, its sales opportunities, and business processes by organizing efforts that did not exist previous. Therefore, it refers to a situation in which ADNOC creates innovative means and structures for recombining resources that the company believes has a potential to yield profits (Duckler, 2014). Entrepreneurial opportunity is about two key things: Things that happen within the environment (resources) and things that concern individuals within the organisation.
Entrepreneurial activities fall into three key areas: the individual entrepreneur, the business environment, and the business activities (Bradley et al, 2011).


ADNOC works to increase its daily production at the current oil fields. Because of this, ADNOC focuses on increasing production offshore. This creates great opportunities for ADNOC to offer varied services to oilfield operators, such as engineering, procurement, and construction (EPC). However, as the output targets have risen over the years, technical challenges have simultaneously increased, specifically during the long-term (Oxford Business Group, 2014). Although the opportunities for service business have grown, the oil sector has become increasingly competitive, with businesses from Asia specifically pushing contract prices down during the recent years. Some of the offshore challenges include the lower oil prices, despite the high production cost and high operations cost of up to five times more than for onshore production (Oxford Business Group, 2014).

ADNOC made considerable achievements in expanding and developing the gas fields to in order to address the increased demand for gas and gas injection requirements. This ensures that the company enhances oil recovery from production fields (ADNOC 2014).

Value proposition

Value proposition consists of the sum total of the products and experiences a company delivers to the customers. When well planned, it has a potential to hone an organisation’s capacity through the focus on activities aimed at serving customers profitably.

The problems the organisation faces vary from the high inventory costs, pressures from international community, decreasing levels of crude oil, inconsistent delivery time and shifting to greener production. All these have meant that the experiences higher production costs (Bradley et al, 2011).

Elements of Value Proposition: A Framework

Value propositions are created and executed at varied organizational levels. ADNOC and its business units have exceptional value propositions. The company can use several models and frameworks to create a compelling value proposition that enables the company to connect with its target audiences and to create strategic basis for its marketing and sales functions.

1) Target Market

This element helps identify the customer the company should concentrate on. Although ADNOC hopes to sell to anyone willing to buy petroleum products, dividing the potential customers into the most relevant dimensions based on consumer behaviours, demographics, before identifying the most attractive segments for business it can effectively serve is critical. ADNOC segments its customers based on motivations. For instance, the company’s customers go for its products due to prices. Others also select the products due as they are motivated by their high quality. Essentially, market segmentation makes sure that ADNOC is able to maximize the efficiency of its marketing efforts particularly when the company targets each market segment with a different strategy. Based on segmentation, ADNOC identifies consumer needs and the customers with the needs, creates products and prices intended to address those needs, targets customers it can communicate with effectively, and lastly, allocate funds for supporting and developing each market opportunity (Schmidt et al, 2010).

Within the context of ADNOC, value is basically what the company gets in return for what it pays. At this rate, although some customers may consider ADNOC to be a great value, others may view it to be over-priced. Therefore, the value equation the company seeks should be connected to the market segment it is targeting. In addition, when thinking about value, it is significant to consider the tangible and intangible benefits and attributes. The tangible attributes consist of the quality gas and petroleum products offered. The intangible attributes include the excitement and sense of satisfaction that comes with buying the company’s products. ADNOC should concentrate on advancing the intangible aspects to drive its perceived value.

The company should advance its customer care efforts to also include complaints resolution strategies to closely monitor customer feedback, and identify costumer dissatisfaction..

The market segment targeted includes those valuing creation of long-term relationship with ADNOC.

3) Offering

The company should analyze the value that its current offering provides to customers and map it against the type of buyer and price-point. It also needs to evaluate its go-to-market strategy, along with the manner it delivers its offering to customers. It also needs to continually innovate its offering to ensure that the company remains differentiated yet relevant (Schmidt et al, 2010).

The company has sought to ensure it is a trusted brand. It seeks to keep its quality consistent despite the product category. The company’s value proposition should remain low price and greater customer satisfaction. It can sustain low prices by ensuring that its customer relationships are continually automated to enhance its customer relationships. To further deliver value, ADNOC should engage in continuous research and development to come up with innovative products in the market (Duckler, 2014).

4) Prioritizing Benefits

Prioritizing can enable ADNOC to develop a forceful value proposition. Rather than include all the key benefits of its products, it should consider the most significant ones to customers, and the interrelationship between benefits. The former is self explanatory, but the latter warrants some explanation. The focus should be in hierarchy, starting with the product attributes such, such as Bradley et al (2011), the functional benefits they produce, and lastly, the emotional benefits like satisfaction.

5) Differentiation

The company’s value proposition should be compared against its competitors’ value proposition. It is significant to examine the potential alternative solutions, rather than the direct substitutes. The objective is to identify why the target customers should choose ADNOC rather than its competitors (Duckler, 2014).

There has to be tangible proof that the value proposition works. This demands creation and continual reinforcement of “evidence” to see to it that customers derive the benefit and proposed values. These require the use of return on investment (ROI) models. By providing the proof, ADNOC gets to show its customers selecting its products are more beneficial than that of the competitor.

Therefore, it is vital for ADNOC to consistently show its expertise in the petroleum industry to provide its potential customers with the assurance they need when selecting its products. ADNOC can achieve this by providing case studies in its website, which document the superior customer experiences and leadership in research and quality to led additional credibility to its products (Duckler, 2014).


ADNOC Group. (2014). About ADNOC. Retrieved: <http://www.adco.ae/en/adnocgroup/pages/aboutadnoc.aspx>

ADNOC. (2012). ADNOC Distribution 2012: Sustainability Report. Retrieved: <https://www.adnoc-dist.ae/corporate/News/ADNOC_SR-Eng.pdf>

Bradley, V., Hirt, M. & Smit, S. (2011). Have you tested your strategy lately? McKinsey Quarterly. Retrieved: <http://www.mckinsey.com/insights/strategy/have_you_tested_your_strategy_lately>

Duckler, M. (2014). Crafting A Compelling And Unique Value Proposition. Retrieved: <http://fullsurge.com/perspectives/articles/marketing/crafting-compelling-and-unique-value-proposition>

Oxford Business Group (2014). New challenges, particularly offshore, mean greater opportunities for service providers. Retrieved: <http://www.oxfordbusinessgroup.com/analysis/new-challenges-particularly-offshore-mean-greater-opportunities-service-providers>

Schmidt, G., Alvaro, A. & Naveen, M. (2010). The Critical Path To Product Success A Strategic Framework To Maximize The Value Of A Product Throughout Its Lifecycle. Campbell Alliance. Retrieved <http://inventivhealth.com/sites/default/files/The_Critical_Path_to_Product_Success.pdf>