BP and the Consolidation of the Oil Industry, 1998-2002

Forest L. Reinhardt; Ramon  Casadesus-Masanell; David J Hanson

Case | HBS Case Collection | March 2002 (Revised January 2010)

BP and the Consolidation of the Oil Industry, 1998-2002

by Forest L. Reinhardt, Ramon Casadesus-Masanell and David J Hanson

Abstract

Examines the economics of the oil and gas industry with a focus on 1998 through 2001. Discusses the rationale behind using a growth in scale as a means to increase profitability and to gain competitive advantage. Also examines the classic strategic implications of vertical integration and questions the necessity of remaining vertically integrated in today's markets. During 1998-2001, the industry structure changed dramatically with the occurrence of a wave of merger activity. Set at the end of 2001, as BP's chief executive, Lord John Browne, ponders the company's future. BP set off the merger activity in 1998 with its combination with Amoco. Other major oil concerns quickly followed suit. Several large and dominant firms, termed "supermajors," separated themselves from the rest of the competitors. Although a large number of independent specialty firms also exist, the supermajor firms no longer believe them to be direct competitors. After the case discussion, students should be able to: 1) understand the basic economics of the oil and gas industry, 2) analyze the rationale behind vertical integration strategies, 3) analyze why the industry restructuring occurred, and 4) understand the economies of scale of the supermajor firms as well as the potential problems their immense size could create.

Keywords: Non-Renewable Energy; Growth and Development Strategy; Industry Structures; Competitive Advantage; Consolidation; Horizontal Integration; Vertical Integration; Energy Industry;

Language: English

Format: Print

37 pages

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Citation:

Reinhardt, Forest L., Ramon Casadesus-Masanell, and David J Hanson. "BP and the Consolidation of the Oil Industry, 1998-2002." Harvard Business School Case 702-012, March 2002. (Revised January 2010.)

Case | HBS Case Collection | January 2019 (Revised October 2019)

KITEA (A): Democratizing Furniture in Morocco

Ramon Casadesus-Masanell and Gamze Yucaoglu

The case opens in 2013 as Amine Benkirane, founder and CEO of the leading Moroccan furniture company KITEA, contemplates the loss his company has incurred for the first time in its 20-year history. The case then describes KITEA’s origins and provides a detailed overview of the business plan that enabled Benkirane to bring affordable modern furniture in flatpacks to the Moroccan market, which had previously been dominated by unorganized artisans. At the beginning of 2010, KITEA was a market leader with a robust market share of 24%. However, Benkirane read about rumors that IKEA was planning to enter the Moroccan market. The case explores in detail KITEA’s efforts to prepare for the increased competition. In 2013, KITEA found itself in a difficult situation, facing a downturn in the economy, a slowdown in sales, a delayed store opening, and souring creditor sentiment following the news about IKEA’s entry. Would KITEA be able to bounce back and remain competitive when IKEA entered the market?

Keywords: retail; KITEA; furniture; furniture industry; entry strategy; responding to entry; Localization; competitive interaction; Private Sector; For-Profit Firms; Business Model; Business Strategy; Strategic Planning; Strategy; Competitive Strategy; Adaptation; Corporate Strategy; Competitive Advantage; Retail Industry; Africa; Morocco;

Citation:

Casadesus-Masanell, Ramon, and Gamze Yucaoglu. "KITEA (A): Democratizing Furniture in Morocco." Harvard Business School Case 719-420, January 2019. (Revised October 2019.) View Details

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BP and the Consolidation of the Oil Industry, 1998-2002

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