Pacific Drill Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Pacific Drill Case Solution

Introduction

This case discusses how oil price fluctuations have affected the company and the overall industry. This case discusses the current managerial and strategic issues which the company is facing. These issues are potential hurdles which the company needs to solve in order to maintain its competitive edge. The oil prices decreased during the period of 2014 to 2015. This decrease in prices affected the companies to go for an offshore exploration. Along with that, during the peak time, the companies acquired resources and drillers in heavy quantity but now it was being counted as an oversupply. There were no chances of oil prices’ recovery, which created a major issue for the company. It was important for the companies to reduce their cost so that the overall business profits could be less affected. (Haiyang Li, 2016). The industrial competition is increasing which is being further accelerated in terms of increase due to the higher decrease in the oil prices.

Background

The company was established in 2006 and it has the workforce of 1600 employees. The company was initiated as a subsidiary of a company named Tanker Pacific. The company was not counted among the biggest companies, but it was counted as a helping hand as a drillship. The main objective of the company was to increase its customer base through partnerships and collaborations. Pacific Drilling is an offshore company which provides services of drillship in deep water, on contract basis. The company was based on the fleet of eight drill ships and it had planned toincrease its fleet to twelve. The drill ships was highly specified and designed for high construction techniques. Since the company started its operations, it has seen huge success in its industry, but currently itis facing crisis due to the issues related to the oil’s prices in the industry and the lack of time left for the company to recover from these crisis. Although, the company has served in the industry with differentiating strategy,but the current crisis has lead the company to hold water exploration projects due to oil’s prices. This has led the company to limit its rig contracts. As the company has a competitive edge due to being specified, but currently, due to the change situation;it is serving as a competitive advantage for the company anymore. Now the company needs to reduce its costs and look for ways that can increase its profit margin. In2008, there were several financial issues being faced by the company but it had managed to solve those issues and reemerge, but in contrast to the crises of 2008; the current crisis is totally different. Back then in 2008, the company was successful in building partnership with other companies, but at this moment,due to the oil prices; few partnerships of the company are under the threat due to some cultural issues and the presence of an intense competition

b

Mission

Mission Statement is basically the main objective values and goals of a company,which acts as a statement that defends its existence. Pacific Drill’s mission statement is “Pacific Drilling commits to be the employer of choice in the offshore drilling industry and to provide the tools and resources to enable our people to deliver consistently exceptional performance.” So, this depicts that the company’s aim is to opt for resources and machines that can help it in providing quality services, considering which other companies would prefer to work in collaboration with it. Along with that, the company has also aimed to deliver high quality performance for its clients and to acquire a competitive position in the market.

Vision

Vision statement is an insight of a company about its future goals, i.e. the goals which the company has set for upcoming five to ten years. It is also a statement that depicts an idealistic insight of the company’s founder. It discusses the current and future objective of the company. Pacific Drill’s business vision is“to be recognized as the industry’s preferred high-specification, deep-water drilling contractor”, which depicts that the company wants to achieve a competitive position in the industry where it could be known for its best specified services and deep water drilling contractors.

Values

The values of Pacific Drill is that it is customer oriented, as it provides those services for which the consumers are willing to pay. The company holds itself accountable for its business activities. It uses proactive business approach and it is financially responsible. It is working on innovation adaption and providing services based on community.

Key Goals

The key goals of the company are major milestone which it strives to achieve.So, the company’s major goal is to create an organization that is capable of supporting the business through innovative equipment. In addition to that, the company also aims to maintain a framework that could help it in keeping its machines updated and having well maintained equipment, drilling procedures, trainings and employees’ recruitment. Additionally, the company’s major goal of is to increase its capability through exploitation, i.e. by having further partnerships with different clients and having continuous learning.

c

PESTLE

Political

Political factor is defined as the rules and regulations that can affect the overall business.Drilling process affects the environment in one way or another, which has led to many countries having extremely strict rules and regulations for environmental issues. There are different rules in different countries. It is essential for Pacific Drill to keep an eye on what its partners are doing, because their doings can affect the overall business in the industry. If the partners are involved in environmental rules’ violation then it can affect the overall business’s image. In different countries, political parties and influential figures have influence over the decision making process related to the permits’ issuance. The company need to take care of the resources and land during piping and drilling.

Economic

The profit of drilling companies depends on oil’s prices, because its exploration incurs huge cost to the company, for which the company is required to manage a high capital position. Overall, the demand of oil is decreasing and so is its prices in the market, which is leading the company towards a higher cost incurrence. The reason behind the decrease in demand is due to its pandemic. The current lock-down caused by the global pandemic has restricted people from having any unnecessary outdoor activities and it has also caused the traveling industries to shut down their services, which has decreased the demand for oil in the oil market. Along with that, the company is willing to go for underbidding prices to contract with other companies...........................

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Pacific Drill Harvard Case Solution & Analysis