Case Analysis : The Global Oil And Gas Industry Essay

1462 Words6 Pages
Case Analysis: The Global Oil and Gas Industry A. Problem Summary The oil and gas industry is prominent for our everyday lives. The industry helps create products such as clothing, cosmetics, asphalt, rubber, gasoline, plastic, medicine, and more. The industry also has strong impacts on politics, national security, and international confrontations. Because the oil and gas industry is so prominent, crude oil and natural gas are said to be the most closely watched commodity prices around the world. Lately, the oil and gas industry has been involved in many events such as a spike in production in the United States, sanctions with Russia, relationship improvements with Iran, advances in technology, climate change discussions, renewable sources for energy, and price uncertainty. Add “Problems” B. Analysis Porters 5 Forces Model a. Threat of Substitutes The price that a consumer is willing to pay for a product is somewhat dependent on the availability of substitutes. As technology is rapidly advancing, substitutes for energy are being sought out by major oil and gas companies. Porters 5 forces model explains that the threat for substitutes is high when the payoff is high or the cost to switch to the substitute is low. China is working toward having biofuels make up about 15% of their total transportation fuel consumption by the year 2020. Europe has also set a target, but for 20% of total transportation fuel consumption, to be met by the year 2020. Russia and China
Get Access