For my macroenvironment assignment, I have chosen Petronas Dagangan Berhad (Petronas), a well-known brand among Malaysians, and the only Malaysian company on the Fortune 500 list with a rank of 186 in 2021. My focus will be on Petronas's core product, petroleum, which includes different types such as Primax 95 Euro 2M with Pro-Drive, Primax 97 Euro 4M with Pro-Race, and Dynamic Diesel Euro 5 with Pro-Drive.

Background

Petronas Dagangan Berhad was founded in Malaysia in 1982. The current Chairman is Datuk Md Arif Mahmood, and Azrul Osman Rani serves as the Chief Executive Officer. Petronas's mission is "to be the 'Brand of 1st Choice', committed to delivering reliable services and quality fuel products to our customers nationwide through our sound network of facilities and business partners." Its vision is to become the most preferred brand, providing innovative and superior petroleum products and services in Malaysia.

To increase its market share to 35%, Petronas plans to launch between 25 and 30 new petrol stations across the country with an investment of approximately RM2 million per station. Currently, Petronas has 3530 Petronas fuelling stations and more than 800 Kedai Mesra in Malaysia.

2.0 Macroenvironment

2.1 Demographic

Petronas segments its products based on the occupation and income of its customers. Lower-income customers tend to choose Primax 95 Euro 2M with Pro-Drive, which provides an affordable solution to maintain and restore engine performance. Middle or high-income customers lean towards Primax 97 Euro 4M with Pro-Race, as they value superior performance driving compared to other fuels. Petronas Dynamic Diesel Euro 5 with Pro-Drive caters to customers who require pick-up trucks and frequently travel to forests for work, such as those in the timber industry.

2.2 Political and Social

During the Enhanced Movement Control Order (EMCO), only essential services or factories are allowed to operate, including petrol stations. Petronas operates from 6 am to 8 pm, except for petrol stations on toll highways that can operate 24/7. To mitigate the risk of COVID-19 infection among staff, contractors, and customers, Petronas has implemented measures such as social distancing and MySejahtera QR codes for registration. The pandemic has adversely affected Petronas's revenue due to limited customers and operation hours. The Petronas Group's financial year 2020 results show a decline in revenue from RM240.3 billion in 2019 to RM178.7 billion in 2020.

2.3 Economic

Economic factors affect consumer purchasing power and spending patterns. These facets form the vital part of the macro environment.

2.3 Economic

According to Dato' Sri Dr. Mohd Uzir Mahidin, Chief Statistician of Malaysia's Department of Statistics, the Gross Domestic Product (GDP) for the Manufacturing sector has increased by 6.6% in the first quarter of 2021 compared to 3.0% in the fourth quarter of 2020, and this growth was driven by the electrical, electronics, and optical goods (10.6%) and petroleum, chemical, rubber, and plastics products (7.3%).

2.4 Natural

Petronas has taken measures to mitigate their impact on the environment. For instance, they have designed the Smart Tray which reduces waste oil generation by decreasing the quantity of oil in the internal drainage system, increasing waste oil recovery, and diverting it from disposal. Additionally, they have implemented the rainwater harvesting method to minimize wastage. Rainwater is collected and carried into harvest tanks, and then used for general cleaning and gardening purposes.

2.5 Technological

Petronas has introduced a new product with new technologies to the market. Primax 95 fuel has a newly added multi-functional additive package that reduces frictional losses by 20% compared to the single friction modifier used previously. The new additive improves the engine's responsiveness and allows it to run smoother. The fuel now also has a new anti-corrosion additive, which delivers double protection and an improved performance for the engine. Usage of the new fuel leads to less battery power and fuel consumption for the same distance. Additionally, Petronas has switched from using Euro 2M to Euro 4M fuel for Primax 97, which reduces the discharge of benzene content from 5% to 3.5%, thus reducing air pollution. It also decreases the release of toxic compounds such as C4, C5, and C6 hydrocarbons into the environment.

Petronas also launched a mobile app called Setel that is the first digital e-payment solution in Malaysia, allowing customers to purchase fuel directly from their mobile devices.

2.6 Cultural

Petronas has diversified the services they offer to their customers by providing car wash and car servicing along with petrol, all in one place. This approach creates a convenient one-stop destination for customers to access multiple services.

References:

Global 500, 2021, Petronas with ranking 186 https://fortune.com/company/petronas/global500/ viewed 13 July 2021

Petronas, 2021, Our Vision and Mission https://www.mymesra.com.my/about-us/our-vision viewed 13 July 2021

Aziz Hassan, 1976, Petronas Dagangan eyes 35% market share https://www.mole.my/petronas-dagangan-eyes-35-market-share/ viewed 13 July 2021

Anthony Lim, 2019, Petronas Primax 95 with Pro-Drive launched – improved engine response and better fuel efficiency https://paultan.org/2019/01/29/petronas-primax-95-with-pro-drive-launched-improved-engine-response-and-better-fuel-efficiency/ viewed 13 July 2021

Hafriz Shah, 2015, Euro 4M RON 97 fuel in Malaysia – what does it mean? http://paultan.org/2015/08/18/euro-4m-ron-97-fuel-in-malaysia-what-does-it-mean/ viewed 13 July 2021

On July 13th, 2021, the following articles and reports were viewed:

1. A 2017 article by Amirul Hazmi discussing the benefits of using Petronas Dynamic Diesel Euro 5 with Pro-Drive for a better driving experience

2. An article by Eunis Ong from 2021 providing a full list of EMCO SOP for affected areas in Kuala Lumpur and Selangor

3. A 2021 article by Priya Sunil detailing the release of new general SOPs for Malaysia's MCO in May of that year

4. The 2020 and 2019 revenue results of Petronas were announced in a report by the Petronas Group Financial Years

5. A report from the Department of Statistics by Dato' Sri Dr. Mohd Uzir Mahidin discussing the economic performance of Malaysia in the first quarter of 2021

6. The 2020 Petronas Annual Report, released by the company themselves

7. A 2015 article by Rizal Johan revealing the secret ingredient in Petronas Primax 97

8. An article from 2020 by Nic Ker informing readers that Setel, an e-payment solution for petrol, is now available at Petronas stations nationwide.