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Rola Orlen Oil w rozwoju przemysłu chemicznego w Polsce

Kraków, 18.05.2011

23 maja 2011
Rola Orlen Oil

A presentation (in Polish) given to Cracow Technology University as a part of series of lectures to commemorate the 45th Anniversary of the Department of Chemical Engineering and Technology there.

Case 1 (Strategy formulation: must not be viewed as a description of true Orlen Oil story). Imagine the middle-size company facing a double challenge: big Internationals ale pushing technological edge beyond capacities of smaller players, minors are competing on price for diminishing, low segments of the market. Basically both ways of competing as prescribed by Porter (eg. by product differentiation or price) are already taken and well fenced. The typical answer (how many times you have heard it?) is: “rigid costs control” and “concentration on profitable segments”. There are only two “buts”:

  • no costs control can save a business without revenues,
  • concentration on profitable segments too often means loosing all customers because they in turn want to reduce number of suppliers and expect comprehensive service.
  • The other answer is: sell the business. Fantastic. However who would buy it?
    • Internationals? What assets are of value for them?
    • small players? They’re just too small for both taking over such company and foster substantial benefits of such move.
    Then what to do? Where to look for a solution. The answer is simple and difficult at the same time. Look at <strongyour customers? They’re still buying. Even more have stopped purchasing even recently. Surely customers are nor fools neither charities. The must have good reasons to do so but looking through pictures framed by competitors you’re not able to identify them, What may be discovered?
    • customers may prefer reliable, short delivery times to any cutting edge technology,
    • customers may value additional services on site which Internationals provide only to narrowly selected partners,
    • customers may value a direct contact not only with sales people but with employees
    • representing other key functions (eg. logistics, R & D),
    • customers may value individual technological solutions which could be developed domestically with help of research/scientific institutions.

Expert was appointed by the General Meeting of PAEE held 2022/05/31 a member of the Audit Committee./ Ekspert został nominowany do Komisji Rewizyjnej PAEE na Zgromadzeniu Członków Stowarzyszenia w dniu 31 maja 2022 r.

ACADEMIC PUBLICATIONS ON STRATEGY & ENERGY RELATED ISSUES

  1. „Zastosowanie metodyki mapowania produktów do analizy potencjału rynkowego wybranych bio-plastików”, Kwartalnik Krakowskiego Towarzystwa Technicznego, nr 191/142, str. 17-22, Kraków, 2022
  2. „Instrumenty rachunkowości zarządczej mogące wspierać gospodarki o obiegu zamkniętym” in: „Gospodarka o obiegu zamkniętym w polityce i badaniach naukowych”, red. Kulczycka J., IGSMiE PAN, str. 129-140, Kraków, 2019
  3. Co-author: Uberman R., Ziković S: „Evaluate GTL processes compared with conventional refining”. Gas Processing: Special Supplement to Hydrocarbon Processing, Word Oil, Houston, May/June 2016
  4. “Group I Base Oils in Europe. Decline which lasts long and offers opportunities.” in proceedings from: Argus Americas Base Oils Summit, 16th&17th May, Houston, USA, 2013.
  5. “Developments in the European market for lubricants & greases. Global Lubricant Market Impact on Europe” in proceedings from: The 2012 European Base Oils & Lubricants Summit, 19th & 20th September, Prague, 2012.
  6. „Complexity of the Central European Lube and Base Oil Markets” in proceedings from: „European Base Oils & Lubricants Summit 2011”, Kraków, 2011.
  7. „Selected trends on the Central European Lube and Base Oil Markets” in proceedings from: „The 15th World Base Oils & Lubricants Conference”, London, 2011.

PUBLICATIONS

If interested in such issues please follow me at Linked in or Twitter.

If you think to face a similar problem please refer to.

  1. “Military origins of strategy as a science. Influence on business thinking” (Militarny rodowód nauki strategii. Wpływ na myślenie biznesowe), Journal of Cracow International Studies, No 3 (XIII), pp. 105-116, Kraków, 2016.
  2. Co-author, “Ownership of refinery business in Croatia and Poland as a factor impacting national energy security”, Journal of Security and Sustainability Issues, Volume 4(2): pp. 101–121, Vilnus, 2014
  3. “Transatlantic relations internal to International Oil Companies as an important component of European energy security.” Krakow International Studies, No 2 (XII), pp. 111-124, Krakow, 2014.
  4. „Why Values are Precious?”, Journal of Cracow International Studies, No 2 (VIII), pp. 261-277, Kraków, 2011.
  5. “State ownership of energy corporations in view of policy of energy security” (Własność państwowa przedsiębiorstw sektora paliwowo-energetycznego w kontekście polityki bezpieczeństwa energetycznego), Energy Policy Journal, Vol. 14/ 1, pp. 29-57, Kraków, 2011.
  6. “Proposal regarding methodology to be used in the process of FDI absorption into the Polish Fuel and Energy Sector” (Propozycja metodologii pozyskiwania bezpośrednich inwestycji zagranicznych w polskim sektorze paliwowo-energetycznym), Energy Policy Journal, Vol. 5/2, Kraków, 2002.
  7. “ Proposals for State Policy Towards FDI in the Polish Fuel and Energy Sector based on the ADL Methodology” (Propozycje polityki Skarbu Państwa wobec bezpośrednich inwestycji zagranicznych w polskim sektorze paliwowo-energetycznym w świetle metodologii Arthur D. Little and Co), Cracow Review of Economics and Management No 575, Kraków, 2002.
  8. “ Proposals for State Policy Towards FDI in the Polish Fuel and Energy Sector based on the BCG Methodology” (Propozycje polityki Skarbu Państwa wobec bezpośrednich inwestycji zagranicznych w polskim sektorze paliwowo-energetycznym w świetle metodologii Boston Consulting Group), Cracow Review of Economics and Management No 528, Kraków, 1999.

Case 2: Creation of joint Oren Oil and academic technology transfer programs. Having identified that one of the strategic disadvantages of Orlen Oil was lack of direct access to technology research programs which cornered the company to buy on-shelf solutions available virtually to everybody on the market and consequently made the company a cost based player the decision was taken to step into basic research area. Being aware of various studies related to tribology and lubricating issues carried out by Polish academic and research institutions we teamed up a group of 5 employees who undertook a constant task of identifying institutions pursuing projects/programs of interest to Orlen Oil. An adequate set of criteria had been developed which included, among others, compatibility of research fields to lubricating issues of importance to European industry, availability of researches with a sufficient record of scientific and industry – related achievements, with special focus on industries important for Orlen Oil, laboratory equipment, selected credentials, etc.   As a result of their work we identified at first stage four entities satisfying our criteria. Later others were added. 

 

  1. Academy of Mining and Metallurgy in Krakow,
  2. Technical University in Krakow,
  3. Institute for Heavy Organic Synthesis,
  4. Institute for Oil and Gas Researches.

 

The two latter were (and still are) recognized as scientific research institutes. This agreements have been serving as an umbrella for transferring numerous technologies under individual contracts, however subjected to some general provisions included to the Agreements. The general provisions covered area of intellectual property rights, exclusivity but also included guidelines for financial terms. Individual contracts then related to specific technologies to be developed and applied. If the final steps were successful technology has been implemented as a part of Orlen Oil portfolio and allowed creation of a new or modified product lines. At the time of my departure there were more than 10 fundamentally new products in the company market portfolio resulting from the scientific researches carried out within the above described agreements. It is worth mentioning that in several cases researches carried out within specific projects gained some scientific interest and results have been published in academic Journals.

Case 3: Resources & Materials Foresight   Resources policy has always been and never ceased to be a hot issue. Regardless business you are in materials make it existing. Is Apple really a non-tangible asset based company? Here’s where your iPad (or other modern electronic device) begins: http://www.cnet.com/news/digging-for-rare-earths-the-mines-where-iphones-are-born/   Each CEO? MB? Owner is accountable for a foresight regarding materials used and sold by his company in 10-20 years perspective. Even small and medium size companies will either answer such question and disappear. Not in a moment but it will happen gradually. Is your company ready for the challenge? How to approach it swiftly at in a cost effective manner?  

  1. Understand evolving needs of your customers. They have already posted their views. Internet, conferences public reports are not bad source. The real challenge is not to find them but to identify the most relevant ones. Strategic thinking is the tool.
  2. Understand what features will be required from your products/services. Make a link to point . Strategic thinking is the tool.
  3. Identify materials needed to satisfy theses needs. Set up engineers. If you happen to have one ask him to spend one day a week on this issue (at the beginning). Ask your suppliers for the solutions. Remember: quite often smart suppliers do not ask their customers. They ask customers of their clients. And they want you to succeed because your success drives their sales. Strategic thinking is the tool.
  4. Discriminate 2-3 challenges of the highest possible value to your business. And focus on them. Sometimes the best solution will be to strengthen links with a business partner/supplier. Strategic thinking is the tool.
  5. Rethink the value added you provide. Strategic thinking is the tool.
  6. Work on it one day a week. For years. Not 3 months, 16 hours every day when facing a disaster. Common sense is the tool. A good consultant who has managed the process several times may help and pay off.
  • Registered Technology Transfer Professional, The Alliance of Technology Transfer Professionals (ATTP), September 2014 –
  • Strategy and R&D Director at Orlen Oil responsible for the full cycle strategy formulation, implementation and reporting.

CREDENTIALS & CONSULTING PROJECTS PERFORMED