Publications
Publications
  • September 2018
  • Case
  • HBS Case Collection

ProdEng: Services for Oil & Gas Extraction

By: Frank V. Cespedes, Maria Fernanda Miguel and Mariana Cal
  • Format:Print
  • | Language:English
  • | Pages:28
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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

Citation

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

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