Case Notes/Answers
THE GLOBAL OIL AND GAS INDUSTRY by Andrew
Inkpen
Discussion Questions:
1. Describe the structure of the oil and gas industry.
2. What is the basis for competitive advantage?
3. What are the main factors that impact the structure and competitive dynamics?
4. Why are many of the largest competitors in the industry vertically integrated?
5. What will this industry look like in five years? In 10 years?
, TB0444
Andrew C. Inkpen
The Global Oil and Gas Industry
Teaching Note
This industry note examines the oil and gas industry. The note first provides background information on industry
financial performance, the role of OPEC, and the problems oil-producing nations have had in capitalizing on their
resource wealth (e.g., the resource curse). The note then summarizes the major competitors among the integrated
oil companies (IOCs), national oil companies (NOCs), and independents. The note describes the major business
segments, including exploration and production, refining and marketing, natural gas, and petrochemicals. The
note concludes with a discussion of industry evolution.
Teaching Objectives
This case can be used in multiple settings:
1. In a competitive strategy course with a section on industry analysis
2. In a corporate strategy course as a vehicle for examining vertical integration
3. With oil and gas industry managers in executive education programs
The main objective in using the case is to examine the structure of the industry and its competitive dynam-
ics. Like all industries, the oil and gas industry is evolving, with new entrants and challenges from the NOCs
shifting the balance of power away from the traditional strongholds of the IOCs. Because of the complexity of
the industry, the instructor will have to choose a subset of material on which to focus the class discussion.
Reading
There have been a few recent books that provide good background reading:
1. Oil on the Brain: Adventures from the Pump to the Pipeline, by Lisa Margonelli, 2007 (also titled Oil on the
Brain: Petroleum’s Long, Strange Trip to Your Tank).
2. The Oil and the Glory: The Pursuit of Empire and Fortune on the Caspian Sea, by Steve Levine, 2007.
The classic book in the area is The Prize: The Epic Quest for Oil, Money, and Power, by Daniel Yergin, 1991.
Assignment Questions
1. Describe the structure of the oil and gas industry.
2. What is the basis for competitive advantage?
3. What are the main factors that impact the structure and competitive dynamics?
4. Why are many of the largest competitors in the industry vertically integrated?
5. What will this industry look like in five years? In 10 years?
Suggested Teaching Approach
When teaching this case to a competitive strategy class or to an executive education class, start with a general
question: what are some characteristics of the oil and gas industry? This generates a variety of issues and allows
the instructor to pick some relevant points for further exploration, such as the role of governments, the nature
of risk or capital intensity, and long-term decision-making. Then discuss competitive advantage, which leads
THE GLOBAL OIL AND GAS INDUSTRY by Andrew
Inkpen
Discussion Questions:
1. Describe the structure of the oil and gas industry.
2. What is the basis for competitive advantage?
3. What are the main factors that impact the structure and competitive dynamics?
4. Why are many of the largest competitors in the industry vertically integrated?
5. What will this industry look like in five years? In 10 years?
, TB0444
Andrew C. Inkpen
The Global Oil and Gas Industry
Teaching Note
This industry note examines the oil and gas industry. The note first provides background information on industry
financial performance, the role of OPEC, and the problems oil-producing nations have had in capitalizing on their
resource wealth (e.g., the resource curse). The note then summarizes the major competitors among the integrated
oil companies (IOCs), national oil companies (NOCs), and independents. The note describes the major business
segments, including exploration and production, refining and marketing, natural gas, and petrochemicals. The
note concludes with a discussion of industry evolution.
Teaching Objectives
This case can be used in multiple settings:
1. In a competitive strategy course with a section on industry analysis
2. In a corporate strategy course as a vehicle for examining vertical integration
3. With oil and gas industry managers in executive education programs
The main objective in using the case is to examine the structure of the industry and its competitive dynam-
ics. Like all industries, the oil and gas industry is evolving, with new entrants and challenges from the NOCs
shifting the balance of power away from the traditional strongholds of the IOCs. Because of the complexity of
the industry, the instructor will have to choose a subset of material on which to focus the class discussion.
Reading
There have been a few recent books that provide good background reading:
1. Oil on the Brain: Adventures from the Pump to the Pipeline, by Lisa Margonelli, 2007 (also titled Oil on the
Brain: Petroleum’s Long, Strange Trip to Your Tank).
2. The Oil and the Glory: The Pursuit of Empire and Fortune on the Caspian Sea, by Steve Levine, 2007.
The classic book in the area is The Prize: The Epic Quest for Oil, Money, and Power, by Daniel Yergin, 1991.
Assignment Questions
1. Describe the structure of the oil and gas industry.
2. What is the basis for competitive advantage?
3. What are the main factors that impact the structure and competitive dynamics?
4. Why are many of the largest competitors in the industry vertically integrated?
5. What will this industry look like in five years? In 10 years?
Suggested Teaching Approach
When teaching this case to a competitive strategy class or to an executive education class, start with a general
question: what are some characteristics of the oil and gas industry? This generates a variety of issues and allows
the instructor to pick some relevant points for further exploration, such as the role of governments, the nature
of risk or capital intensity, and long-term decision-making. Then discuss competitive advantage, which leads
