GRAN TIERRN ENERGY Harvard Case Solution & Analysis

GRAN TIERRN ENERGY Case Solution

 

Q.5 LOCATION ADVANTAGES AND THEIR IMPACT ON INTERNATIONALIZATION AND ATTRACTIVENESS OF BRAZIL FOR GRAN TIERRA

The following advantages are associated with the location of the company. The advantages have also created an impact on the internationalization. Also, we discuss the area which attracts Grain Tierra to run their business in Brazil. The advantages and attractiveness of the areas are mention below:

  • The main benefit to Gran Tierra was that there was previously significant set-up in the zone. The wedges provided Gran Tierra with construction as well as investigation advantages that might assist as a solid early stage for more growth in Brazil.
  • Additionally, it was also probable to announce the technology of North America such as plane penetrating and multi-stage splitting motivation that was not cast off aground in Brazil. There were durable resemblances among the Recon Cavo basin and basins in North America such as Bakken and Eagle Ford, where actions were successful as a consequence of the operation of these skills.
  • Furthermore, the strategy team of Gran Tierra was generating more activities for existing fields; it would also contribute to the creation of new jobs in local communities. However, its success ultimately relied on Petrobras granting it access to infrastructure and marketing the final products.
  • As the analysis of above advantage, the strategy team supposed that Petrobras would also discover these attractive opportunities exclusively when the budget was silently improving from the 2008 fiscal smash and the recession that the manufacturing had skilled due to the failure in the normal price of crude oil in 2008-2009.
  • Gran Tierra had seen attractiveness in Brazil for spreading their business. In shallow water, Gran Tierra had two opportunities relating to offshore. The opportunity was gained by making communication between the Petrobras and Norwegian SOE Statoil. The opportunity was highly risky because the chances of success were one-in-six. But, if the company had been able to achieve then they would have transformed their business owing to the massive probable forecasts.
  • In spite of more risk, these opportunities were varying attractive, specified that the offshore resources of Brazil were measured to be between the greatest capable zones internationally.
  • While operations of shallow water were equivalent to zones where the decision-making team had comparable offshore knowledge, Gan Tierra existing group was completely aground and the corporation trusted on the wide-ranging knowledge of the two considerable superiors combined oil and gas organizations. (Burzynski, 2010)

Q.6 BRAZILIAN MARKET COMPARED TO OTHER HOST MARKETS WHERE GRAN TIERRA IS ALREADY OPERATING

Gran Tierra has recently started operations in the Brazil market, but before starting in this country, it had operated the business in three different markets. The markets were:

  • Argentina
  • Pure
  • Colombia

Gran Tierra had gone in each of these markets in the early years. This way had value to the Gran Tierra’s growth.

Argentina was an operative base for minor-measure manufacturing and for Gran Tierra to use early as its essential effective base in South America.

Gran Tierra also gained success in Colombia, which had been transformational in terms of discovery assets, increasing inventions rapidly and making cash flow to account for opportunities in the future growth. The market of Colombia was now known to SOEs, main and self-governing similar, and the decision-making squad understood that the rapid development that Gran Tierra had earlier practiced in Colombia could not be simply repetitive due to the improved rivalry for minor excellence property.

Gran Tierra also worked in Peru state. Peru had huge, unexploited oil and gas investments, but development was definite to be slow because of conversational compassion and extensive certificate procedure.

The decision-making team of Gran Tierra established again the possible path for the development in future. If the company would continuously move on its South American stand, then it would be facing the political issues in Bolivia, Ecuador and Venezuela in the fiscal terms and lack of agreement purity.

Whereas, the experience in Brazil showed that the company have gained some advantage such as company have large infrastructure in areas in which they explored and conducted their business. The strategy which applied in Brazil was depending on its capability to associate with other organizations for the achievement of new technologies. The company has taken opportunities by working with two of the largest companies but it was highly risky. (Brazilian Market in the Gran Tierra, 2018)

Q.7 CURRENT OPERATING METHODS AND ITS FEASIBILITY IN PERU

The current methods which Gran Tierra is using in the organization are based on different strategies. These strategies would also be implemented in Brazil because it would be getting benefits and improved growth as well. The company has chosen the same method because the team realized some benefits that would be gained in the future. The benefits that they can get from the same method are:

  • Grain Tierra may create strong relationships with foreigners because they welcome international investments.
  • The organization can hire all qualified and experienced employees as well as preferred professional employees who belong to the same country.
  • Gran Tierra can rely on more opportunities through this method.

Now, these methods would be feasible in Peru’s economic growth. The Peru’s economic growth would be stable, and foreigner investors will increase investments in Peru. Also, the methods will build a various collection of penetrating chances, with an investigation, change and manufacture of the resources.

Q.8 GRAN TIERRA WAS FACING RISK

Gran Tierra were facing some risks that created problem in the growth of the company. These risks are mentioned below:

  • Conflicts related to social and high safety hazards had restricted or delayed the business through the previous 40 years with distractions in actions due to occurrences on resources, pipelines, and workers.
  • Local societies had not obviously profited from the many years of expected capital withdrawal in Colombia, a discrimination that terrorist groups in Colombia had earlier played on.
  • The company also faced the challenge in the opportunity of Brazil. In doing this, the anticipated services were obtainable at inferior value and advanced amounts than the same facilities in North America and the actions took longer to implement and finally had minor consequences.
  • They faced major political and economic issues in Peru even they had an asset but still, it did not get much success in this region.

Q.9 RECOMMENDATIONS

I would recommend to the CEO of Gran Tierra Mrs. Dana Cofield to halt the business operations in Brazil, the company has more opportunities in Brazil that can be availed but due to problems in the operations, this could cost highly to the organization. The organization should continue on their previous model of Brazil before identifying opportunities in a low scale environment or countries and employ internationalization in the project.

Gran Tierra also censored posterior capitals in Brazil and transferred to other countries which are more profitable. The company has spread their business in Mexico to have less competition as compared to other. Mexico is a new territory with high quality of oil reserves.

Gran Tierra would improve the political and security issues by the competences of invalidates to accomplish the cross-border controlling agreements...........

 

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