The Business Planning

Process of Pakistan State

Oil (PSO)
SUBMITTED TO: SIR DANISH A. SIDDIQUI
Introduction to Business Planning Process
of PSO
 Business planning entails evaluating the company's internal strengths and weaknesses,
increasing productivity, identifying how it will compete with competing companies in
the future, and establishing benchmarks for development so they can be analyzed.
 Pakistan State Oil (PSO) Limited is a well-known petroleum company in Pakistan
having petrol stations all around the country. The company is considered as a market
leader in the oil industry and providing the finest oil to the public and key sectors of
Pakistan since the time of its establishment in 1974
 PSO business planning process consists of scorecard gap analysis, customer feedback
analysis, organizational gap analysis, activity based, and environmental based. These all
are major components and play a vital role in increasing their productivity.
 PSO’s contemporary purpose of the business plan is to provide direction, accountability,
and close gaps in performance. All of the above-mentioned analyses will be discussed in
detail in the coming slides.
PSO’S ENVIRONMENTAL SCANNING

 ENVIRONMENTAL SCANNING:
 Environmental scanning is a procedure that carefully examines and analyses
relevant data to find external opportunities and risks that may have an impact on
decisions in the future. It shares many similarities with a SWOT analysis and is
closely related to it. It is a big part of the Company’s strategic planning.
 Various methods are used to collect this type of data from multiple resources such
as interviewing the leaders inside, reviewing publications, conducting focus
groups, and administering surveys both inside and outside the company.
 The scanning includes both Internal and external environmental scanning as the
information gathered through it will allow the leaders and managers to proactively
respond to such external impacts.
PSO’S SIGNIFICANT FACTORS
AFFECTING THE EXTERNAL
ENVIRONMENT:
 Pakistan suffers from a lack of energy. The sector is more exposed to influences ranging from
micro to global due to the energy shortage. Seasonality is another element that affects how well
this industry performs.
A brief overview on the external factors is here under:
 POLITICAL ENVIRONMENT:
 The oil market is significantly shaped by national and local politics. Any OPEC+ supply
disruptions is likely to pose both opportunities and difficulties. The country including PSO must
exercise caution while making quick decisions because it is frequently exposed to situations like
these.
 TECHNOLOGICAL ENVIRONMENT:
 Heading towards a more digital, Pakistan has created a number of pathways for opportunities and
threats. As technology advances, the conventional petroleum industry has been redesigned,
creating a new playing field for rivals. In accordance with international trends, the Pakistani
government has implemented the National Electric Vehicle Policy (NEVP).
PSO’S SIGNIFICANT FACTORS
AFFECTING THE EXTERNAL
ENVIRONMENT:
 NATURAL ENVIRONMENT:
 The reduction of carbon emissions from operational activities and burning petroleum products is the result of
worldwide environmental campaigning. Additionally, the GOP's "Clean and Green Pakistan" effort has
contributed to changing the specification for petroleum products to meet Euro 5 requirements. The corporation is
playing its part in introducing fuels that are Euro 5 compatible while being aware of the changing environmental
regulations. The company has taken strides towards safe and secure product transmission by completing its part of
pipeline link with PAPCO.
Moreover, the company is also exploring opportunities in the renewable energy segment.
 SOCIAL ENVIRONMENT:
 The recent trends in Pakistan shows that women are actively participating in the labor force, thus promoting
women empowerment. This change has created a new market segment. The latest campaign of PSO “Azm Karo,
Aagy Barho!” on Women’s day in form of a thought-provoking DVC can be marked as an excellent example.
PSO actively supports and encourages every single women out there to break the bias and fight the challenges
they face to make their marks in a man’s world.
The national brand “PSO” supports a culture where diversity is instilled as a core principle by hiring more women
in technical and managerial positions across organizational hierarchies and functions. PSO also provides full-
fledged day care center, maternity leaves, travel policies, equitable pay and much more
A GLIMPSE OF PSO’S
OPPORTUNITIES & THREATS
OPPORTUNITIES THREATS
 Ventures in renewable energy.  New entrants in market
 Diversification in the tech business.  Introduction of electric vehicles
 Business integration through investment  Influx of alternates
in energy trading business.
CUSTOMER FEEDBACK REVIEW
IN PSO
 Customer feedback is information supplied by customers regarding their interactions
with a product or service. Its goal is to expose their degree of happiness and assist
product, customer success, and marketing teams in determining where they can improve.
 The solution for getting honest and authentic feedback is to ask the appropriate question
to the right person at the right time. By doing so, you obtain insight into the customer
journey, making trends, requirements, and action points obvious.
 PSO regards customer input as an important source of information not just in the
Product Quality System but also in the Pakistan State Oil Research and Development
Department. Customer feedback refers to a company's production system enhancement
and quality assurance system.
 The customer feedback analysis serves two purposes: it assesses customer satisfaction
with existing product services and it estimates the likelihood of the same customer
purchasing the same or a similar product that the PSO offers.
Pakistan state oil customer feedback
based on the following is criteria:
 Identifying customer and product attributes
 • Identifying new products requested
 • Identifying and prioritizing problems/issues that arise
 • Ensuring issues are logged into the system
 • Ensuring trends are identified, reported, and solved • Pinpointing customer encounters
 • Identifying where encounters occur
 • Determining what interactions are most important
 • Assessing employee business knowledge at the point
 Pakistan state oil also use Information into the system tools used to collect customer feedback includes:
 Customer logs
 Surveys
 Interviews
 Focus groups
 Professional association feedback
 Mystery shoppers
Pakistan State Oil Company’s Gap
Analysis
Performance management  
 During the year in review, the effectiveness of the Performance Appraisal process was revamped
through incorporating and emphasizing on setting Objectives & KPIs of all employees. This platform
also ensured the development of low performers through identification of training needs gap analysis
through self evaluation

Financial gap: 
 Onus of being a PSE
 Inefficiency in power sector(accumulating financial gap due to difference between power cost and actual
receipts.
 it is the most daunting area of the company which has grown over the period of time. The Management
is actively following up with the customers and respective authorities for the settlement of dues. The
Company is managing its working capital requirement through banks’ Financing facilities.
Pakistan State Oil Company’s Gap
Analysis
 Increasing cost of funds:
 Negligible receipt of late payment surcharges on trade receivables from GENCOs, HUBCO,PIA and SNGPL
 Increasing market yield trend
 Excessive borrowing from FIs to meet working capital requirement, due to mounting trade receivables in
circular debt, has raised the intrest rate risk on the Company’s interest rate sensitive exposures. Rising
pressure on economic indicators has increased the investors’ required rate of return on such credit rated
instruments.

 LNG 
 PSO has been playing a critical role in bridging the demand & supply gap of Natural Gas through import of
LNG. In FY2019, PSO imported 74 LNG vessels with a total of 236,496,743 MMBTUs (approx. 4.6 Million
MTs).
 Smooth supply chain operations were ensured through close coordination with all stakeholders despite
mounting LNG related circular debt and non-payments by SNGPL
Components of an Activity Based Plan

 The components of the PSOs activity-based business plan are as follows:

 The activity-based business plan that we have analyzed for the PSO in the oil and gas industry in
Pakistan is developed under the assumption that these companies have as main operational
activities entry, exploration, appraisal, development, production, and finally sales and transport.
The financial part is always the best part of each contract that can show us all the aspects of each
contract and through this specific comparison, we can obtain enough information regarding the
difference in business models between these two countries.
 The activity-based business plan of PSO covers all the aspects like entry, exploration, appraisal,
development, and production. On the other hand, sales and transport have different
characteristics which cannot be assumed in the contract. PSO handle those activities by their
internal department which is a part of the key activities of Oster alder’s business model canvas.
 Another aspect of the activity-based business plan of PSO is the value proposition. This aspect, as
mentioned earlier, is the most important part of each business model which relies on innovation.
PERSPECTIVES

 FINANCIAL:
 As of June 30, 2021, variation as compared to June 30, 2020 is as follows:
 Shareholders' equity increased by 23.8% primarily due to profit retained during the year.
 Non-current assets increased by 3.4% mainly due to additions in property, plant &
equipment.
 Current assets increased by 11.8% primarily due to increase in stock in trade (mainly due
to price variance) and trade debts which is partially offset by decline in other receivables,
short term deposits and prepayments and cash and bank balances.
 Decrease in non-current liabilities by 1.8% mainly due to reduction in wharfage payable.
 Increase in current liabilities by 4.5% primarily due to increase in trade and other
payables mainly on account of increase in cost of purchase which is partially offset by
decline in short term borrowings and accrued interest / mark up
CUSTOMER:

 PSO being a customer-focus company always strive to serve its customers better and come up with
innovative ideas to facilitate them.
 We strive to fulfil the requirements of our valued customers by providing superior quality, energy-
efficient fuels that improve the vehicle’s performance and provide a great driving experience. Our fuel
range is carefully designed and tested to help you save fuel at no extra cost and help clean your engine
thereby improving engine efficiency. We ensure that only high quality fuel reaches your engine. 

As our main focus is on utmost customer satisfaction, we believe that every customer should leave our
forecourt with a ‘WOW’ feeling. We strive to understand our customers’ needs and relentlessly work
towards fulfilling them by adding value in fuel and non-fuel areas. Our Shop Stops and other non-fuel
retail services provide you with convenience and an array of products and services to choose from. 

The retail business team ensures the maintenance of every safety standards at the retail outlets. Utmost
importance is given to the quality and quantity of the products. We ensure that the right product in right
quantity is delivered to our valued customers as desired by them.
ORGANIZATIONAL :

 Value added by SMS & Email Alert Solution

 PSO is delighted to introduce yet another value-added service for you! Now
experience more excellent monitoring and control on your fuel transactions round
the clock.
 With PSO's SMS and Email Alerts, you can keep track of your fuel expenditure
24/7, anytime, anywhere. Upon subscription to this service, you will receive the
following alerts:
 Enhanced security
 Get notified on every transaction
 Better Fuel Management
OPERATIONAL:

 PSO works tirelessly to achieve operational excellence. They implement advanced

strategies to improve their cost, cycle time, conformance to standards, quantity
and quality. They mainly focus on customer satisfaction and according to them,
solving customer obstacles is their first priority and it increases their productivity
too.
 GROWTH:
 PSO has been on a steady growth trajectory as the company's profits increased by
238% over the same period last year. The company's strong operational
performance and strategic thrust is reflected in its market share which rose by 340
basis points over the same period last year.
CONTENT OF EACH COLUMN IN
THE PERFORMANCE PROFILE
In the performance profile, PSO has separate columns in performance profile which are as follows:
ACTIVITIES:
 PSO pays an employee to exhibit in the form of activities. It includes objectives, tasks, action steps, or other behaviors such as
competencies. This column shows how an employee has delivered its work and efforts.
OUTCOMES:
 After ending the activity, there are outcomes which are measured by customer satisfaction in PSO. They make sure that employees
understand the results and the activities done by them.
TARGET MEASURES:
 For PSO, Target measures are basically the performance standards which can be determined by the customer services language and
satisfaction. PSO comprehends on high quality products and makes the best strategies to flourish their productivity and encouragement of
employees to be best at their activities.
DATA SOURCES:
 PSO has all the past records and proper data. The data source for teamwork and cooperation is observed by team members or citations from
team members, and feedback from managers. Logs, audits, reports, surveys, and counts are also data sources that are collected by PSO.
RATINGS:
 In the performance profile of PSO, in the last they’ve rating column which indicates achievements by the employee. They’ve different and
proper scales to measure the performances of an individual.
THANK YOU