1. External Analysis
In order to understand the environment of the mining industry and evaluate Dicore’s competitors and customers, this chapter will adopt some tools, such as PESTEL and Porter’s five forces, to analyze the external environment of Dicore International.
2.1. PESTEL Analysis
The PESTEL framework is often used to analyze the broad macro-environment of an organization (Johnson et al, 2014). Thus, it is used in this chapter to identify how the trend of drilling industry can be affected by the political, economical, social, technological, ecological and legal factors.
2.2.1. Political Factors
There were two bans on offshore drilling raised during 1980s in the United States, in response to the damage…show more content… Additionally, drilling sites are always located in inaccessible areas that cannot provide a comfortable working condition. Therefore, it could contribute to a lower level of operational productivity.
2.2.4. Technological Factors
The overall mining industry profits declining in 2013 came along with the declining of investment, which may lead to a lack of funds in research and development in the mining industry, and slow down the innovation process of drilling equipment to achieve faster and more accurate drilling. Besides, better equipment can also address the issue raised by the “bonus pay” which often results in damaging equipment or mineral.
2.2.5. Ecological Factors
The environmental regulations could impose the operating expenses of drilling, particularly in the southwestern region. To be more specific, the drilling company has to take full responsibility to reverse any damage that it may cause to the environment.
2.2.6. Legal Factors
More than one licence is required for a company to offer a full range of drilling services in southwestern region. This may be a slow and complex process and may influence the company’s performance to some extent. Yet it is still much more stable than the rest of the factors that might change the macro-environment.
2.2. Porter’s Five Forces Analysis
The Five Forces Framework will be adopted in this chapter to identify the attractiveness of the drilling industry