Fossil, Inc

Fossil, Inc.

Hai Ho, Jennifer Lyons, Jimmy Dubberly, Lisa Nicholson, and Shawn Humphrey

University of Phoenix

MBA510

Dr. Robert Soben

02/14/07

Fossil, Inc.

The price of traditional fuel is at an all time high and the need for the United States to become energy independent of other nations is more important now than ever before. Fossil, Inc. is one of the many companies who are prospecting for a fortune in the biodiesel boom. The original founders of Fossil, Inc., Jimmy Dubberly and Jennifer Lyons see not only the need to develop a better burning more efficient alternative fuel, but they also see the enormous opportunity to be the first in the market to create the cheapest alternative fuel to meet the current standards of the Clean Air Act. They have added three new members to their team, Lisa Nicholson, Hai Ho, and Shawn Humphrey who have all contributed to the five million dollar investment in the biodiesel plant located just outside of Jacksonville Florida. Their overall goal is to create a type of biodiesel that will better serve the environment and ultimately to become the industry leader in the biodiesel industry.

Biodiesel is the name of a clean burning alternative fuel produced from domestic, renewable resources (No Author, 2007). Biodiesel can be made up of vegetable oils or animal fats and may be used in its pure form or blended with petroleum in order to help add to the lubrication of engine parts. Biodiesel is also the only alternative fuel to meet the highly stringent regulations of the Clean Air Act as amended in 1990 (No Author, 2006) and the exhaust emissions of sulfur oxidis and sulfates from biodeisel are essentially eliminated compared to traditional diesel fuels (No Author, 2007). There are many benefits to the use of biodiesel; cheaper, more energy efficient, better for the environment, and may help eliminate the United States' dependency on other countries for fuel. As the need for an alternate form of fuel continues to grow, so does the need to be the first in the market to have created it.

Describe the Situation

The year 2005 will go down in history as the year that the oil industry was challenged beyond measure by increased demand from China and India; natural disasters that destroyed oil production and refining capabilities; political unrest in countries like Venezuela and the Middle East. China's oil consumption is growing by 7.5% per annum due to increased purchases of cars or motor vehicles. The United States is the only country that consumes or imports more oil than China. India has risen to the fourth largest gasoline importer worldwide. Venezuelan's government is using oil as a weapon against the United States and is building relationships countries that are hostile to the U.S. Currently, America's oil refineries are concentrated in the Gulf Coast region where the refineries are vulnerable to adverse weather conditions . The Middle East has garnered 66% of the world's oil reserves. Presently, the world consumes two times as much as oil on a daily basis as it discovers. Price per barrel has more than doubled. (Dinneen, Robert. 2006).

Fossil, Inc. is relatively new to the industry and has made a huge investment in the search for a new form of fuel in order to be the first in the industry to design, produce, refine, and distribute a less expensive, cost efficient fuel alternative.

Frame the Right Problem

Fossil, Inc. is faced with the challenge of creating a new high quality, cost efficient, environmentally friendly, sustainable fuel form that replaces hydrocarbon fuel forms. Fossil, Inc. aspires to be the industry leader in the production of the cheapest alternative fuel form. The biggest challenge that Fossil, Inc. will be faced with is competing with other companies to resolve the oil consumption crisis that our country currently faces. Since transportation represents two thirds of the United State's (US) oil consumption, Fossil Inc. will deploy a strategy to address alternative fuel sources.

Problem Statement

Fossil, Inc. needs to find, develop, produce, and deploy a sustainable, less costly, clean, fuel strategy that provides better quality transportation fuel options for its stakeholders.

Describe the End State Goals

The statement that best represents the company's intended future state is in the Vision Statement that describes the company's goal as desiring: "To be recognized as the fuel form alternative provider of choice that integrates its best in class human resources with high quality, environmentally friendly, cost-efficient processes and state of the art technology to create progressively high performing transportation fuel solutions." More specifically, Fossil Inc.'s objectives within the next three years are to:

* Displace petroleum by creating a more sustainable and prosperous petroleum free economy

* Partner with the automobile industry in the quest to create fuel alternative vehicles

* Identify and forge positive relationships with special interest groups and agencies relative to demonstrating environmental responsibility.

* Reduce the outflow of U.S. revenues to foreign oil and countries

* Promote the economic revival of communities domestically and globally

* Ensure all initiatives align to current and future clean fuel standards

* Reduce the cost of gas prices at the pump for consumers

* Engage all stakeholders in continuous process improvement initiatives through quantitative and qualitative methodologies.

Possible measures of success are:

* Reduction in the inflow of barrels of oil; reduction in foreign oil consumption

* Increase in the quantity of petroleum powered vehicles compared to reduction of automotive fuel costs.

* Increase in alignment with governmental policies and standards

* Baseline establishment of stakeholder perceptions and implementation of continual monitoring, evaluation, and action