Report: Generic Strategies Analysis of Schlumberger's Business

This report provides a comprehensive strategic analysis of Schlumberger, a major player in the oil and gas industry. It begins with a business background and an overview of the company's financial performance from 2014 to 2016. The report then examines Schlumberger's target consumers, competitors, and core value proposition. A detailed analysis of the company's marketing strategies, including the current and desired marketing P's, is presented. The value chain, resource and capability audit, and operating model are evaluated to identify improvement opportunities. The report also includes a management agenda to enhance the company's position and discusses internal business linkages. Key findings include the need for improved price and brand recognition, optimization of warehousing, and streamlining of back-office support. The report also discusses future integration plans with Cameron and OneSubsea. Overall, the report offers a strategic perspective on Schlumberger's operations and future prospects. The document is contributed by a student to be published on the website Desklib. Desklib is a platform which provides all the necessary AI based study tools for students.

Running head: GENERIC STRATEGIES ANALYSIS
Generic Strategies Analysis of Schlumberger
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1GENERIC STRATEGIES ANALYSIS
Table of Contents
Business Background...........................................................................................................2
Target Consumer and Competitors......................................................................................3
Core Value Proposition........................................................................................................4
Current and Desired Marketing P’s.....................................................................................6
Value Chain.........................................................................................................................6
Resource and Capability Audit............................................................................................7
Operating Model and Improvement Opportunities............................................................10
Management Agenda to Enhance Position........................................................................12
Internal Business Linkages................................................................................................14
References..........................................................................................................................15

2GENERIC STRATEGIES ANALYSIS
Business Background
Schlumberger is positioned as a company that includes certain major technologies
associated with recognizing and explaining hydrocarbon resources. This encompass wireline,
WesternGeco and software integrated solutions (Austin et al. 2015). The company’s drilling
group includes certain major technologies associated with drilling and positioning of gas and oil
wells. Moreover, production group of the company includes major technologies associated with
producing and drilling gas and oil wells along with integrated drilling services. Well services
employed at the time of oil and gas well drilling are useful in maintaining efficient production.
These services include a range of intelligent technology and equipment.
Financial information of Schlumberger
Description 2014 2015 2016
Contract revenue 48580 35475 27810
Gross profit/ loss 5643 2072 -1687
General and administrative
expense

3GENERIC STRATEGIES ANALYSIS
Other income 442 418 238
Net profit/ loss before tax 291 236 200
Key ratios/ Operating
Gross Margin 19.3917
5
8.77966
1
-8.435
Net margin 0.65246
6
0.04035
6
0.03607
5
It is gathered that 70% of the company’s revenue is from WesternGeco and 30% is from
oil and gas well drilling.
Target Consumer and Competitors
The company’s major consumers include the production and exploration organizations
those are generally the large connected major and small oil and natural gas organizations.
Moreover, the company’s consumers also include internationally independent natural gas and oil
organizations, state owned oil organizations and National oil companies (Austin and Jencks,
Preform Systems LLC 2017). The oil field service organizations compete with owned another
through bidding low cost in order to win contracts from their consumers. FMC, Cameron and
National Oilwell Varco are major competitors of the company. Moreover, some companies those
own and lease out drill rigs are also major competitors of Schlumberger.
Consumer value profile
Quality
attributes 1
Weigh
t 2
WesternGec
o 3
Oil and gas
well
drilling 4
Software
Integrated
solutions 5
Averag
e 6= 4+
5/2
Ratio 7=
3/6
Weight time
ratio 8= 2*
7
pipeline
quality
21 22 15 23 19 1.15789473
7
24.31578947
Design 15 16 20 18 19 0.84210526
3
12.63157895
wireline
quality
10 18 14 4 9 2 20
Time 26 26 17 6 11.5 2.26086956
5
58.7826087

4GENERIC STRATEGIES ANALYSIS
Brand 6 10 24 28 26 0.38461538
5
2.307692308
Consumer
responses
22 8 10 21 15.5 0.51612903
2
11.35483871
100 129.3925081
Consumer
satisfaction
score
8 9 7
Price 70 60 100 90 80 0.75 52.5
Weight on quality= 40% * 129
Weight on price= 60% * 52.5
Value score= 83.1
Core Value Proposition
Positioning
In consideration to the above data, Schlumberger can be positioned against two other
methodologies based on the current spider chart of the company (Kamali and Hewage 2016).

5GENERIC STRATEGIES ANALYSIS
Current Position Spider Chart
Observing the chart above, the aspects in which the company is positioned are indicated
along with observing that certain factors needs improvement. Improvement factor include market
(brand) and price recognition in which the target position is to be attained in 36 months for
matching costing pre-cast or selling (Keindorf et al. 2018). Moreover, the spider chart below
indicates that the company needs to attain higher score in user control.
Future Position Spider Chart
Value Map
Considering the aspects within the value map, it is vital to bring Schlumberger business
near to the fair value line with not decreasing the quality of the mapping presented below:

6GENERIC STRATEGIES ANALYSIS
Current and Desired Marketing P’s
Attribute Current Position Desired Position KSF
Price Very high Precast position and
premium meeting
Price of services and
equipment
Place France All over France Weighting
Promotion Decreased market
recognition
Increasing market
recognition
Increased investment
in research and
development, factory
tours for all its target
consumers
Products Superior quality
product
Maintaining identical
situation
Technological
innovation
Physical Evidence Medium High Presenting
differentiated
products through
manufacturing its own
equipment’s
Process Medium effectiveness Increased
effectiveness
Health and safety,
enhancing quality of
drawings
People Increased frustrations Enhance loyalty Hiring manpower
with global talent
Marketing Ps & KSF

7GENERIC STRATEGIES ANALYSIS
Value Chain
Value chain of Schlumberger includes supplier management, logistics, strategic
outsourcing and inventory management. The suppliers are more vital in order to maintain
capability to address company’s and the needs of consumers. The company manufactures
services and goods that are from financially stable, reliable sources along with being
technologically qualified. Supplier staff and delivery partners needs to be aligned with the
delivery, sales and invoicing obligations (Sanchez and Moprec 2014). The value chain of the
company indicated that the business operations includes oil discovery, crude oil pipeline and
refinery. The value chain also encompasses petrochemicals, regional storage along with power
and agriculture.
Resource and Capability Audit
Factor Time Quality Branding Resources Cost
Factor 5 4 3 1 2

8GENERIC STRATEGIES ANALYSIS
Importance
Key activities Generating
field
deployment
lead
organization
and plant the
company’s
new IT
platform in
Equator
Unconvention
al production
of resources
Natural gas
exploration and
production
activity,
promoting
integrated
service model
Developing
integrated
completion
technology
system
Premium price
for aa
complete
range of
subsea oil.
Costs Nil 3% of
resource cost
Marketing
manager salary
of around 20K
and budget of
branding is
200,000 AED
annually
10 AED for
average each
hour
Gas reservoirs
having a high
development
cost of around
2 million
Resources Nil Drilling
services of the
company
includes
wellhead
systems
Production
system
including
logging,
optimization,
chemicals and
treatments
Subsea
landing string
services,
artificial lift
systems and
one subsea
Well testing
services that
includes
surface well
testing and
side tracking
whip stocks.

9GENERIC STRATEGIES ANALYSIS
Based on the canvas, certain improvement areas within the spider charts and marketing
P’s is observed to be price recognition and brand positioning. Price recognition can be improved
through focusing on their aspects like drilling, production and refining. These areas can be
improved through improving cost efficiency in refining and mining process (Simmons and
Simmons 2015). Moreover, the brand can be positioned well through making certain changes in
the production process from current production flow to proposed production flow. This will
result in breaking down the production process flow and will gain attention of more consumers
and projects. It will improve brand recognition through decreasing chances of resource idleness
causing from lack of projects.

10GENERIC STRATEGIES ANALYSIS
The proposal needs further evaluation in order to evaluate the cost of advanced and
modified refining process.
Operating Model and Improvement Opportunities
After critical evaluation of the position of Schlumberger, it could be found that the
organization needs improvement in two aspects, which constitute of marketing strategy and
warehousing related to outbound logistics. Since the organization is effective highly in
contracting activities; hence, it could seek benefits from the efficacy and experience in
procurement of its subsidiary firms (Rechenmacher and Yang 2014). Hence, the existing
operating model of Schlumberger would focus on the marketing resources (manpower and
facilities) and outbound logistics, especially warehousing.

11GENERIC STRATEGIES ANALYSIS
Schlumberger
Cameron Characterisation Drilling Production
$10.3 billion $12.2 billion $18.5 billion $18.1 billionRevenue
One Subsea- 2
Drilling
systems- 2
Valves and
measurements
- 2
Subsurface
systems- 1
Processing
systems- 1
Business
rank
Wireline- 1
Testing
services- 1
Western
Geco- 2
SIS- 1
Drilling and
measurements
- 1
Geoservices- 1
Bits- 1
M-1 Swaco- 1
Drilling tools-
4
Well services-
2
Completions-
3
Artificial lift-
2
Well
intervention- 1
In accordance with the above figure, it could be found that the technology
offerings of the firm are highly complementary with minute overlaps depending on the
organizational integration. Based on this, Cameron with its existing product line structure would
join Schlumberger in the form of a complete group of new product on par with the current