Considers the economics of the oil and gas industry, with a focus on 1998 to 2001. Discusses the rationale for increasing the scale as a means to increase profitability and gain a competitive advantage. Also consider the classical strategic implications of vertical integration and the need to remain issues vertically integrated in today's markets. In 1998-2001, the structure of the industry has changed dramatically with the emergence of a wave of merger activity. Set at the end of 2001, BP chief executive, Lord John Browne, looks to the future of the company. BP went merger activity in 1998, with its combination with Amoco. Other major oil concerns quickly followed suit. Several large and dominant firms, called "supermajors", separated from the other competitors. Despite the large number of independent firms, there are also a specialty, supermajor firms do not consider them direct competitors. After the case discussion, students should be able to: 1) understand the basic economics of the oil and gas industry, 2) the analysis of the causes of vertical integration strategies, and 3) to analyze why the industry restructuring has occurred, and 4) understand the economies of scale supermajor firms, and potential problems, they can create a huge size. "Hide
by Forest Reinhardt, Ramon Casadesus-Masanell, David J. Hanson Source: Harvard Business School 37 pages. Publication Date: Mar 05, 2002. Prod. #: 702012-PDF-ENG
Related Case Solutions & Analyses:
Flexible Footprints: Reconfiguring MNCs for New Value Opportunities
Ambrose & Bisaro
The Guggenheims and Chilean Nitrates
Infineon Raceway (Sears Point Raceway): Marketing in the Motorsports World
CEIBS: Global Business School Made in China
PROTECT- Promoting Civil Society in Serbia
Crisis and Reform in Japans Banking System (B)
Endeavor: Creating a Global Movement for High-Impact Entrepreneurship
Ought to Can: Questions for an Entrepreneurial Future
Tenova: Mining for Growth in Economic Crisis
