Suncor Energy: An Energy Producer Research Paper

Introduction

Suncor Energy is an energy producer that extracts and upgrades sands of oil into high-quality refined crude oil products as well as diesel fuel. Like many successful companies, Suncor also focuses on differentiation strategy that implies the techniques better than the competitors. As it has a good relationship with its customers, it occupies several opportunities to differentiate itself that start from the customers’ realization of a product needs to the desire of disposing of it.

However, it can be expected that Suncor can continue its innovative features that may satisfy the customer’s experience about their product which can be termed as the process of consumption chain. In this way, the company can obtain the opportunity to position its products & offerings in such way that would never be followed by the competitors. So, according to the referred authors, there is a twin approach that can assist this company in the identification of newer techniques of differentiation. The former is- “Mapping the consumption chain” & the latter is “Analysis of customer’s experience”.

How do people become aware of their needs?

• As the 1st step of strategic differentiation is mapping the customer’s needs, the company should perform this task in each essential customer segment. But as Suncor produces the necessary energy for fueling the vehicles, heating houses & providing power to schools, business places & hospitals, it needs not contact its customers by phone or physical meetings.
• Suncor products provide as a feedstock of producing many types of consumer goods like- household detergents & plastics, so the customers are already known about their extreme needs of such goods.
• To fulfill the customers’ diversified demand, Suncor should create a strong methodology of differentiating its product that will emphasize customer’s awareness of their unique needs of the product. This can accrue to the firm if it is capable of anticipating & then satisfying the needs that are unknown to the target customers. If Suncor is successful to provide the customers this unexpected value- that is a product performance capability or characteristic they did not request, yet do value. For example, while using the heating system in home that does not ensure the safety from burning, after the ending period, Suncor, by introducing the environmental safety of its heating system, can find a way in which the item can communicate with the customers.
• Another strategy emphasizes the availability of products at any time & any place that is not offered by the competitors. This process should be easy, cheap & more convenient & habitual so that the competitors would not copy it in the right way. When the customers can easily get relevant & updated information about the improvements of product raging from expected high quality to reasonable price & safety over phone, direct mailing or internet without the hazard of physical visit of the company or the inefficient knowledge of the salespeople.
• Another important aspect is the final selection process by the consumers. In such issue, Suncor should modify this process highly convenient, comfortable & comparatively less boring. For this, the company should search the perfect condition where the competitors can not motivate people properly for selection.
• The question of customers order & purchase of energy items is important for Suncor as it produces low-cost & high-volume items. Here, the differentiation can be imposed by the adjustment of high switching costs.
• Considering the question of product delivery, it is not very easy for Suncor to warehouse-hub connection for the wide-ranged energy materials.
• Suncor can differentiate itself by providing the after-delivery service of its product. This involves inspection, transportation & the proper assembly of products.
• The question of product installment of consumption chain is not very much relevant to Suncor as it mostly applies to complex products not energy materials.
• The company should simplify the payment process also.
• As the company produces air products like industrial gases, it faces the problem of storage. So, it should avoid the storing of huge amounts of risky high-pressure gases. Gas plants should be localized next to the site of customers which can glad customers, increase switching costs & also pay less opportunity for competitors’ movement.
• In question of product movement, Suncor should avoid so as it does not manufacture packaged goods.
• Question of customer’s use of required product will emphasize the regular maintenance & repair concern of Suncor.
• Suncor should response in helping customers at need of using its product.
• It should have a legal concern about the exchange & return of products.
• Suncor should provide repair services for lifetime purchases.

How do customers find your offering?

This question focuses the next step of mapping, that means- analyzing the customer’s experience. By doing this, Suncor can obtain inner views of customers by the appreciation through which steps of the consumption chain can be unfolded. It is very much important for the company as the customers always interact & interchange their ideas with many people, occasions, activities & places. Basically, this step introduces several issues of what, when, who, where & how- application of a single link of the process. The most accepted way in this regard is that a team of personnel from Suncor will begin their questions until the destination of their thinking. If a particular brainstorming does not give any particular result, there will be no worry & the goal of differentiation will continue because from a bunch of ideas, it is possible to adopt a promising one.

Let’s consider some possible implications of the above questions in Suncor perspective:

• What? Imposing the customers’ activities in the chain of consumption, additional functions, potential problems that may not be straightly related to the product or service, possibility of the company of enhancing the experience at the consumption stage.
• Where? Suncor can identify the position of customers at the consumption chain, additional responsibility, arrangements & the possible concerns regarding the location. This formula suggests the creation of differentiation based on location relatives to competitors. Such as- the power supply of Suncor can be used in such way that people can visualize it wherever or each place of their workplace & abroad for the purpose of differentiation.
• Who? Suncor can also identify someone else who exists with the customers in the process of consumption chain, probable influence of those persons on customers, importance of their thinking, depending upon the arrangement, and possibility of others existence, relevant impact of those people on the final buying process etc. Here, other people would be family, friends, business coordinators who possess expected differentiation points, differentiated mood, experience & time.
• When? Here the company can evaluate the specific time of day or night, specific week or date & the specific time of the year when its customers make a link with the chain, any problem causing for such timing, time when the customers will be in such link depending on the company’s arrangement. In fact, the simplest product, like gas can be differentiated by the consideration of “purchase link” of the chain.

When Suncor the option of business-trip, the question may arise-

• On that trip, whom & when the customers purchase gasoline?
• What would be the other functions that may be performed by the customers while they are buying gasoline etc?

How? Suncor can address customers’ needs, possible concerns of the company filling the needs, additional requirements to fulfill the concerns & needs.

Thus, it can be said that understanding the customers’ ideas placed on chain can assist Suncor to establish differentiation in many nontraditional ways for the purpose of value addition. This requires the capacity of adopting particular ideas with specific skills, systems & assets that can create competitive advantage. As Suncor has possible creativity & imagination, it should understand the customers to have such advantage.

Bibliography

Griffin, R. W. (2006), Management, 8th Edition, Houghton Mifflin Company, Boston New York, ISBN: 0-618-35459x.

Hitt, M. A., Ireland, R. D., Hoskisson, R. E. (2001), Strategic Management, 4th Edition, South-Western Thomson Learning, Singapore, ISBN: 0-324-041891-2.

MacMillan, I. C., and McGrath, R. G. (1997), Discovering New Points of Differentiation, Harvard Business Review, July- August, 1997, Reprint No. 97408.

Stoner, J. A. F., Freeman, R. E., Gilbert, D. R. (2006), Management, 6th Edition, Prentice-Hall of India Private Limited, ISBN: 81-203-0981-2.