Strategic Analysis of Halliburton: Individual Strategy Project Report

This report provides a strategic analysis of Halliburton, a leading provider of products and services to the energy industry. It begins with an introduction to strategic planning, defining key components such as mission, guiding principles, value propositions, destination points, and strategies. The report then offers a company profile of Halliburton, detailing its history, global presence, and key participants, including competitors, customers, suppliers, public, and employees. The core of the analysis involves Porter's 5 Forces, assessing the threat of new entrants, bargaining power of suppliers and buyers, the threat of substitutes, and rivalry among existing competitors. A SWOT analysis follows, evaluating Halliburton's strengths, weaknesses, opportunities, and threats. Finally, the report concludes with recommendations based on the analyses. The report aims to provide a comprehensive understanding of Halliburton's strategic position and future prospects.

Individual Strategy Project

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Contents
Introduction.................................................................................................................................................2
Company Profile..........................................................................................................................................3
Porter’s 5 Forces Analysis...........................................................................................................................6
SWOT Analysis...........................................................................................................................................9
Strengths of Halliburton..........................................................................................................................9
Weaknesses of Halliburton....................................................................................................................10
Opportunities of Halliburton..................................................................................................................10
Threats of Halliburton...........................................................................................................................11
Recommendations.....................................................................................................................................12
References.................................................................................................................................................14
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Introduction
This report mainly focuses on studying the strategic plans of the company. Porter’s 5 forces
analysis and SWOT analysis is used to analyze the numerous components of strategic plan.
There are five components which are used to describe strategic plans which are given below:
Mission: It defines the existence of an organization. The mission tells about the existence of an
organization to other people who are working in the company or who are outside the company.
Motivation as well as objective both purposes are described in mission.
Guiding principles: Such principles are developed to acknowledge the behavior with people or
stakeholders. It differentiates among the behavior which is acceptable within the organization
and behavior which is intolerable. Guiding principles helps to describe how one must behave
within organization whenever a difficult situation occurs (Halliburton, 2018).
Value propositions: It helps to enlighten the value that an individual provides to group of
different stakeholder, both internal as well as external in an organization. It deals with some parts
such as why a customer purchases the product from the company? Which facilities make the
people to get employed in the company? What expectations the shareholders can do from the
company to get their profit?
Destination points: These points help to identify that where the organization desires to reach
within a particular period of time. It is one of the essential elements as the goals are clearly
defined and the chances of getting succeed increases (Ryans, et al., 2003).
Strategies: Strategy basically defines that what efforts an organization has to do to reach where
it is planned. To reach the destination point, one must know about the things that must be kept in
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mind, to move as planned. To acquire the goals, what to do and what not to do must be planned
and answered before working on the decided (McCarthy, 2017).
Company Profile
The strategies made by an organization can be explained in a better way by considering an
example of the company and the company that chosen for this report is Halliburton. This report
will basically cover the strength, weakness and threat of the company by the medium of SWOT
analysis. Halliburton was founded in the year 1919 and it comes under the leading suppliers of
products as well as services to the energy production across the world. The company employs
about 80,000 employees in one year. They have branches in more than 80 countries, and
Halliburton provides the upstream oil as well as gas industry all the way through the created
lifecycle of the tank. They locate the hydrocarbons and manage the geological data, to drill and
formulate the appraisal, well-constructed and optimize the production with the help of the entire
life of the field. Australia and Oceania are the two major places where Halliburton is working for
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more than 50 years and presently they have 16 operations support and organizations across the
region that can support the clients on both sides that is onshore and also offshore. The company
is basically acknowledged all through the oil and the gas industry for the industrial ability,
experienced workers and outstanding HSE presentation, which helps to supply a complete range
of well structured, and pipeline services to various customers (CPS, 2016).
The key participants involved in the industry are:
Competitors: There are number of things which have to be notices as every organization
comprises of some elements in a competitive environment. In any small or big company no one
can tolerate domination. In the world of business, each and every company has to go through
several competitions.
Mainly the expected competition, which a company commonly faces, is from distinguished
products of other companies. Therefore, due to very high competition and to remain successfully
in the industry, the corporations tend to advertise their provided products, which depict them in
unique and eye-catching way (Hunter, 2010).
Customers: Creating customers is the first motive of any business organization. To get highest
profit, every business organization listen to the demands of their customers. Customers play a
very important role in a company. The sale is totally dependent on the customers and they are the
key member for any organization. The company must follow the rules which can satisfy the
needs of the customer. The business does not possess any existence without the presence of
customers who purchase the products. Most of the companies take out a general advertising plan
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which helps to rise up the customer base. Every company holds up such activities which help to
target the customers according to their requirement.
Suppliers: In any company, the main suppliers can be an individual or it can be a large
organization. Both of them come together as well as provide the raw material which is essential
for the company. The main effort of the company is to choose those suppliers that can offer best
quality, delivery consistency, credit, assurance and also cost fewer amounts. The company has to
be very cautious while selecting its dealers (Sider & Ailworth , 2015).
Public: To reach the goals, public put a major impact and it is the key element in the business.
A public is basically a group which possess some interest or impact on the capability of the
company. Conservationist, customer protection group, media people as well as local people are
some of the examples of public groups. It is compulsory for every organization to please the
general public apart from competitors and also their customers. Setting up a goodwill in the
public, assist in getting up an optimistic reply to the organization.
Employees: Workers in any industry are the pillar of company. There will not be any kind of
disagreement while working between the worker and the organization as it leads to number of
disputes which can downfall the growth of company.
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Porter’s 5 Forces Analysis
Porter’s 5 Forces analysis is the basic tool which helps to evaluate as well as access the strength
and position of Halliburton. The competitive theory also helps to recognize where the power is
lies in a business position. This analysis mainly helps to recognize that the new products and
services offered by the company can provide profit or not (Jurevicius, 2013). The Porter’s 5
forces involve:
Threat of new entrants: In this force, the position of the company can be affected by the
capability of individual to go through the market. One must think that how it can be done so that
the new entrant does not face any problem while recognizing the products and deals offered by
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the company. Plan the strategy to easily get the foothold in the specific industry. Estimate the
costing and regulation part so that the customer can choose your company without wasting any
time. The threats involved with new entrants can be very high only when the presented company
can do a little to react and the involvement of government must be neglected. Profit will surely
fall down when there are competitors in the same industry. The company must create barriers to
enter so that the entrants get discouraged. The response of Halliburton in respect to this force is
quite good. They have started making their product apart from other companies so that new
entrants get attracted towards their product and services as well as the costing plan. This force
helps to increase the brand repudiation of Halliburton (Dobbs, 2014).
Bargaining power of suppliers: The strong bargaining power always permits the dealers to
vend high price or less worthy raw materials to the purchasers. This force can straightforwardly
affect the profit within the firm of buyer as while purchasing the products the buyer has to pay
more for the raw materials. With the help of this force, there are many options while choosing
and it becomes quite easy to switch to the cheaper option. This force puts an impact on
Halliburton in terms of profit. Due to strong bargaining power of the suppliers the rate of buyers
becomes high but the suppliers are quite less. Apart from this, the costing of the raw materials
while switching becomes very high which can benefit the suppliers. This force helps Halliburton
to find out the substitute products in an easy way (CGMA, 2013).
Bargaining power of buyers: Buyers always have the power in their hand to stipulate the lower
price or the high quality of the product from the producers of the industry whenever the power of
bargaining is quite strong. The low price depicts the low profits for the manufacturer; at the same
time as the product with high quality generally lift up the cost of production. For the producers it
becomes a deal with low profit. Buyers can exert tough bargaining power only when the
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existences of buyers are quite less and the costs of switching to other buyers are also low.
According to this force, one thing that Halliburton has to face is that the buyers around them are
cost responsive. The scenarios made by them offer the producers very low profit. This force
helps Halliburton to find out the number of buyers, size of buyers and their respective order to
calculate the profit (Porter, 2001).
Threat of substitutes: Threat of substitutes refers to the probability of the consumers to find out
an unusual method of doing basically what the company do. A substitution which is easy as well
as cheap to create can deteriorate the position of an organization and threaten your productivity.
This force becomes threatening whenever the buyers can find out any substitute product very
easily with best prices and provides better quality that can attract the customers and also it
becomes very effective whenever the buyers are able to switch from the existing product or
service to any other product by spending little amount. This force does not merely affect the
Halliburton as the company always tries to sell their services and products with affordable rates
and good quality. This force helps Halliburton to analyze the performance of substitute.
Rivalry among existing competitors: This is the last force of Porter’s analysis and it is the main
determinant which describes how competitive and beneficial the business is. In any competitive
business, the firm has to participate forcefully for the market share, which in result leads to very
less profits. Rivalry becomes more intense whenever the there are various competitors and the
exit barriers are quite high. This force helps Halliburton to analyze the modest threat acquired by
the competitor. It helps to company to analyze the number of competitors in the market in same
industry (Innovation, 2016).
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SWOT Analysis
SWOT matrix or SWOT analysis is a well-organized method of planning which is basically used
to review the strengths of the company, their weaknesses, opportunities as well as threats faced
by the organization. It is an extensively established method to collect, present as well as review
the wide-range scheduling data within the procedure of planning up a project. The SWOT
analysis is in actual an essential tool for recognizing as well as administrative procedure for all
types of circumstances in an organization. From the outlook of Halliburton the SWOT analysis
can be very helpful for planning the business, its strategies, calculating the competitors, and for
the development of the product. The analysis generally helps the company to acknowledge
strengths and also weaknesses of the respective company so that the company can work out on
the weaknesses part to convert their weak parts into strong one.
Strengths of Halliburton
Halliburton is the leading firm and posse’s number of strength to succeed in the market area. The
company has put up proficiency at inflowing the new markets as well as accomplish the planned
goals. The development helped out Halliburton to build up new profit flow and expand the
financial cycle risk in the marketplace it functions in. The main strength is that the company has
made their world-wide presence in almost 80 countries which describes that they are world
famous. The company has strong brand name as well as brand fairness. Halliburton consist of
strong technical support with intense inclination towards constant improvement. The strong CSR
of the company mainly focus on the initiatives which include building up of schools,
environment protection and many more through with the help of Halliburton foundation. The key
strength of the company is that it has numerous production lines with drilling, manufacture as
well as consulting which helps them to rise up their profit level (Tuncay, 2015).
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Weaknesses of Halliburton
Halliburton is vastly reliant on the worldwide crude prices with unpredictability that impacts its
profit level. The restriction within the trade puts a major impact on the business in terms of
product as well as technology. The operations get slowdown because of the strict rules made by
government which has to be followed in energy and gas both sectors. The weakness of the
company is the clean-up cost as well as the costing of other accountability with respect to
environmental laws. The company goes to underperformance whenever a comparison has to be
made with its competitors. The profit percentage of the company is even below the average
industry. Halliburton has elevated abrasion speed in the work force. When we compare to any
other company in the same industry Halliburton has an advanced abrasion rate and have to pay
out a lot more as compared to its rivals on the employees training and expansion (Al-Busaidi,
2010).
Opportunities of Halliburton
The original policy of taxation can drastically blow the method of doing the business as well as
can open up various opportunities for the well-known players in this field such as Halliburton to
boost up its profitability. The development of the market will direct the strength of the rival’s
improvement and facilitate Halliburton to raise their competitiveness as compared to the other
rivals. The latest prospect will also create intensity in the playing field for all the competitors in
the business. It signifies an enormous opportunity for Halliburton to compel home its benefit in
the field of new technologies as well as gain the share in market in the innovative category of the
product. The improvement plans help to reduce the transportation cost in the supply chain. The
profit can be increased by improving the economy and the prices of oil (Halliburton, 2018).
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Threats of Halliburton
High competition in the oil as well as gas industry has wiped up the profit and it is the main
threat that is faced by Halliburton. Intense competition is another threat which is commonly
faced by the company. In numerous global markets, there are workers who are not proficient
while working and this threat puts a major impact on the growth and development of the
company. The environmental regulation which is originated in the year 2016 under the Paris
agreement has also become a threat for Halliburton in terms of various product categories. There
is no any regular supply of the innovative products which leads to low swings in the number of
sale. Another major threat which leads to downfall in the industry is the changing behavior of
consumer as well as buyers (Kaplan, et al., 2015).
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