Build improve growth opportunities across assets and

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as a standalone business. • Build: Improve growth opportunities across assets and maximise production across operated assets. Open infrastructure and facilities to increase throughput and drive down unit costs. • Grow: Develop focused exploration strategy and capability, and identify additional gas supply to drive long-term value from the five core, long-life natural gas assets. The strategy will be underpinned by disciplined management. Santos will target a US$1.5 billion reduction in net debt to less than US$3 billion by the end of 2019 through increased operating cash flow and releasing capital through non-core asset and infrastructure sales. Mr Gallagher said substantial progress had been made in 2016 on the Santos turnaround. 2016 sales volumes are expected to be higher than 2015 and unit production costs lower. 2016 production is expected to be higher as well. Question 1 (4 marks) a. Define business change 1 mark Santos has identified areas for improvement in the performance of their business. They did this through a review of some key performance indicators. b. Define the following terms: 3 x 1 = 3 marks i. Key Performance Indicator ii. Number of sales iii. Rate of productivity growth 2
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PES BUSINESS MANAGEMENT UNIT 4 OUTCOME 1 2017 Question 2 (8 marks) The media release indicated that reduced unit production costs were a key strategy in the 2016 turnaround. a. Explain lower cost as an approach to strategic management as identified as part of Porter’s Generic Strategies approach. 4 marks b. Explain the second generic strategy identified by Porter. 4 marks Question 3 (18 marks) 3
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PES BUSINESS MANAGEMENT UNIT 4 OUTCOME 1 2017 a. The media release suggested that performance in previous years had been poor. Other than the pursuit of profit, explain three driving forces for change.
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