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Topics covered :
1. SWOT ANALYSIS
2. CORPORATE STRATEGY
3. COMPETITOR ANALYSIS
4. PORTER’S FIVE
SWOT Analysis:
Strength:
Leading technology provider in the oilfield service with the highest level of
customer satisfaction.
Schlumberger is the only company to provide BOP valves which can prevent
oil leaking even at 25,000 PSI pressure. These are important for crews and
oil well.
With huge number of patents and technologies, Schlumberger are leader in
their products like Artificial Lift, and completions segments.
Well established manufacturing and supply chain logistics across the globe.
Highly talented employees from 100+ countries working across 85+
countries.
Effective training programs for employee to be competitive in the segment.
Strong cash flow for new researches and projects
Successful merging with strong technology providers such as Cameron.
In downtimes, Schlumberger invested in IT Transformation projects, which
will merge and upgrade their Information Technology to latest. This will
enable them to manage efficiently between Engineering, Manufacturing and
their Supply chain.
Weakness:
Slowdown in Oil economy has resulted in slow down of projects for
Schlumberger.
With the US oil market in high has significant reduction of profit from other
geomarket regions.
With no diversification of business, Schlumberger entire profit is dependable
on oilfield revenue.
Declining revenue per unit. Competitors in the industry is forcing downward
profit for Schlumberger.
With so many organization restructuring, Schlumberger is loosing its core
most experienced employees to competitors.
With US sanctions, revenue from embargo countries are affected, and hence
loss in our revenue.
Opportunity
With new mergers and acquisition, Schlumberger can increase their
portfolio to carter both upstream and downstream in the oil industry
With increase in the political tension in the middle east and some European
countries and Russia, there will be huge demand for Oil in future, which will
generate more revenue for Schlumberger
As a bigger company, it is easier for Schlumberger to adhere with all
government policies and regulation in the offshore country. This has
potential to convert more projects compared to the rivals.
After BP mishap, costumers are opting for high end products, which
Schlumberger is already specialized with.
With more and more environmental policies are adopted by countries,
Schlumberger has advantage over the competitors as they have already
developed high efficient products and patented to them.
Threats:
With the development of alternation energy solutions, Schlumberger profit
will go down quickly.
With OPEC in control of lower oil price and huge supply of oil from USA,
there are very less new order for Schlumberger
USA and China war trade can lead to further reduction of revenue for
Schlumberger
With new entrants like GE, and other local players, competition is high, and
Schlumberger negotiation capacity is taking a huge hit.
With more stringent trade laws, it is difficult to transfer Schlumberger tools
between countries, can lead to loss of revenue.
With the reduction of oil price, very less new oilfields are developed recently
in middle east. This has significant impact for Schlumberger eastern
hemisphere revenues.
Corporate Strategy:
Schlumberger is the world's leading provider of technology for reservoir
characterization, drilling, production, and processing to the oil and gas industry.
Working in more than 85 countries and employing approximately 100,000 people
who represent over 140 nationalities, Schlumberger supplies the industry's most
comprehensive range of products and services, from exploration through
production and integrated pore-to-pipeline solutions for hydrocarbon recovery
that optimize reservoir performance.
Guiding Principles
Schlumberger values conduct and behavior
Making the most of our unique assets, Schlumberger is committed to providing
services that enhance and optimize our customers' performance.
Our people thrive on the challenge to excel in any environment and their
dedication to safety and customer service worldwide is our greatest
strength.
Our commitment to technology and quality is the basis for our competitive
advantage.
Our determination to produce superior profits is the cornerstone for our
future independence of action and growth.
Our commitment to customers
Schlumberger is committed to excellence in everything we seek to do. We aim to
do business in a consistent and transparent way with all our clients and do not hold
equity stakes in our customers' assets. Customers place a great deal of trust in us,
particularly when it comes to handling sensitive and confidential information. Our
reputation for integrity and fair dealing is vitally important in winning and retaining
this trust.
Schlumberger strives to maintain the trust and confidence of our customers and
shareholders, as well as all others affected by our operations. When we are clearly
seen to behave in an ethical manner we enhance our reputation for integrity,
which in turn helps us attract and retain both customers and employees.
Corporate Governance
Schlumberger Limited is committed to adhering to sound principles of corporate
governance and has adopted corporate governance practices that promote the
effective functioning of our Board of Directors, its Committees and our company.
The Board’s primary responsibilities are to oversee and counsel the Company’s
Chief Executive Officer (the “CEO”) and other members of the senior management
team. Some of the Board’s precise responsibilities include:
1. R&D portfolio;
2. Location and distribution of R&D resources;
3. Interaction with academic institutions;
4. Information technologies and systems;
5. Manufacturing technologies; and
6. Acquisition of new technologies.
Competitors Analysis:
Weatherford
Bakers Hughes, GE
Haliburton
Weatherford
Weatherford is a top competitor of Schlumberger in the Oil & Gas Equipment &
Services industry. Compared to Schlumberger, Weatherford generates lesser
revenue. They are the closest competition to Schlumberger. Merging with Baker
Hughes put on hold had a severe impact for them.
Haliburton:
Haliburton and Schlumberger have major stakes in North America geo market.
Fracking has bought down the oil price in North America, which resulted in huge
loss for Haliburton. Schlumberger has benefitted through other segments outside
North America region. Because of limited budgets with these clients in the region,
acquiring new customers is becoming difficult at these times for both
Schlumberger and Haliburton.
References:
Porter Five forces of Schlumberger: http://fernfortuniversity.com/term-
papers/porter5/analysis/431-schlumberger-limited.php