ProdEng: Services for Oil & Gas Extraction

Frank V. Cespedes; Maria Fernanda  Miguel; Mariana  Cal

Case | HBS Case Collection | September 2018

ProdEng: Services for Oil & Gas Extraction

by Frank V. Cespedes, Maria Fernanda Miguel and Mariana Cal

Abstract

ProdEng is a venture created as part of a PE fund and provides oil field services in Argentina. In 2016, an industry-wide unforeseen oil and gas demand slump drove ProdEng’s average service rates down by more than 37%, with EBITDA margins falling from 50% to 24% in the second half of 2016. Although the partners remained optimistic about ProdEng’s long-term fundamentals and management team, the short-term challenges required that they act rapidly. However, they had divergent views on the path forward. Should they stay the course and focus on their core competencies, or should they rethink their approach to sales and drive profitability via spot contracts in a highly uncertain time? The key issues in this case are pricing, customer selection, and management of prices and accounts in an inherently uncertain, volatile demand environment.

Keywords: pricing; Entrepreneurship; Sales; Marketing; Price; Strategy; Latin America; Argentina;

Language: English

Format: Print

28 pages

Educators Purchase

Citation:

Cespedes, Frank V., Maria Fernanda Miguel, and Mariana Cal. "ProdEng: Services for Oil & Gas Extraction." Harvard Business School Case 819-003, September 2018.

Algramo, recognized for reducing food prices in Chilean low-income neighborhoods through dispensers eliminating packaging, has developed a model to end single-use plastic in the FMCG (fast-moving consumer goods) industry. Beginning with a partnership with Unilever Chile, this has attracted global interest from FMCG giants and environmental NGOs, and capital from foreign impact investors. Algramo’s board has approved a joint venture with a Dutch NGO to take the model to Indonesia, the world’s second-largest source of plastic leakage into the oceans. Meanwhile, Chile has been hard hit by the Covid-19 pandemic, certain to bring great hardship to Chile’s low-income population. Algramo’s founder and CEO José Manuel Moller must decide whether to continue with the Indonesia project (and other initiatives in New York City and Europe) or focus the company’s efforts on Chile.

Fred Shilmover and Sam Clemens prepared for their fourth quarter board meeting. They were excited to have scaled their software startup, InsightSquared, to $2 million in revenue and secured an $8 million round of venture capital. However, they disagreed on the path ahead, specifically on the sales and marketing plan. Shilmover preferred a sales-centric approach to growth while Clemens preferred a marketing-centric one. Which strategy was optimal for their venture’s next phase of growth?

Teaching Note for HBS Case No. 819-010. Shindigz sells party and celebratory items through its branded direct online channel, third-party retail and wholesale channels, and online marketplaces. Shindigz has for decades successfully executed a premium-priced branded strategy across its distribution channels. But market developments put this approach at risk. The teaching note discusses the impact of omni-channel buying processes on marketing requirements in an event-driven product category; the links between channel choice, pricing, and business strategy; and the requirements for change in response to market conditions that put pressure on established processes in a business model.

Faculty & Research

ProdEng: Services for Oil & Gas Extraction

Abstract

Citation:

About the Author

More from the Author