(7 pages of text)
This case introduces students to the value chain of the oil and gas industry in Canada. Through examining the current position and future plans of a small, independent oil and gas exploration company, they will discover the challenges of growing through acquisition and the risks associated with expanding beyond a company's core competencies. The case includes an overview of the industry, the history of Oleum Resources Ltd., and the opportunities it has to revise its business strategy by expanding into the innovative but risky ASP technology. The company's first two options entail not only investing considerable capital but also hiring highly specialized personnel. However, the third option, to stay the course, may mean facing losses and investor unhappiness.
This case is relevant to courses regarding strategy, specifically those involving operations and small companies.
- Assess operations alternatives and determine which provide the ability to develop a sustainable advantage. This analysis can be done through a value chain approach.
- Adjust operations strategy to changing external factors; in this instance, decreased commodity prices.
- Address how the size of a firm, and therefore its access to capital and human resources, can in some ways dictate its operations strategy.
Mining, Quarrying, and Oil and Gas Extraction
Canada, Small, 2009
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