Chevron Corporation: INTS 497.06 External Environment, Industry Analysis, and Company Assessment
Authors:Lindsay Gardner, Angela Haverly, Nadine Jang, Emily Pimentel, Peter Talbot, Daniel Yoo
Mentor:Venkatachalam Seshan, Professor of Management, Business Administration Division, Pepperdine University
Abstract: The Energy Industry is complex, multifaceted, global, and comprised of multi-national companies. These companies, such as Chevron Corporation, are diversified and vertically integrated through Upstream and Downstream Segments. Chevron has market share of 3.5%, globally, in the Energy Industry. The Industry as a whole is experiencing increasing demand for energy as populations and standards of living rise in developing countries. Volatile prices have always characterized this industry, as oil prices are subject to vast fluctuations coinciding with tensions in the Middle East. Access to the oil supply is becoming increasingly difficult, so employing competitive technology is vital for success in maintaining and sustaining market share. The threat of Global Warming drives innovative technologies as sustainability becomes central to solving not only the environmental problems, but also to meet increasing demand. Chevron’s largest market segment is Exploration and Production, and it has been increasing revenue for the last ten years. Our preliminary findings are Chevron Corporation ranks second in the domestic market and eighth in the global market. In 2012, revenues reached over $240 billion dollars. In light of the threats to the Global Energy Industry, Chevron has faced and will face many challenges in this dynamic market. It is meeting some of its challenges, in particular, its production of geothermal energy in response to the push towards Alternative Energy. The biggest threats for Chevron are competition and regulation, found using the Environmental Threats and Opportunities Profile (ETOP) and the WOTS-UP, a more involved form of Strengths, Weaknesses, Opportunities, and Threats analyses. This Undergraduate Research project examined the External Environment, Industry Analysis, and Company Assessment using Strategic Management Methodologies. These findings can then be applied to real strategies for our case subject, Chevron Corporation, in order to maintain competitive market advantage and increase or maintain market share.