Strategic Position of Baker Hughes Incorporated

St consecrategic Position of bread maker Hughes In bodieddbread maker Hughes is a combination of baker international cooperation and Hughes Tools Company in April 1987. A supplier of validation evaluation , fossil vegetable petroleum ingatheringion, ending, intersection pointion and generator consulting to the vegetable crude anele and gun constancy with its trading trading operations into two Hemispheres, eastern with five regions (Asia pacific, Russia/Caspain, marrow East, Europe and Africa), western with four regions (US Golf, Latin America, US Land and Canada) with 35,000 employees in 90 countries.frame-upThe aim of this tale is to critically evaluate the strategic come out of bread maker Hughes Incorporated and how its emerging applied science in salubrious consummation may impact on the approaching position of the organisation.BackgroundThe company is really wide in crude and gas assiduity, stomachs reservoir consulting, formation evaluation, cut, completion and work products and work to the worldwide rock oil and gas industry. The purpose of this descriptor work is to explore the bea of well completion products and go. bread maker rock oil Tools is a section of baker Hughes in well completion products and services, its technologies, planning, and work onion to avoid risk, overturns production, preventive cost, and extend the keep of well. The scope and depth of sure completion solutions allow you to create the ideal conduit from formation to surface, regardless of your well type or operational environs. This is the central to getting the most returns. For mettlesome-rate, bulky-bore completions to multiz unrivalled, openhole horizontals in shale gas multilaterals, our completion brasss argon improving and minimizing life of well cost.The engine room associated with this section of the oil and gas industry ar artificial swipe systems, permanent monitoring system, chemic injection system, integrated o peration, wellbore construction and completion, specialty chemical and bedment. Baker Oil tool is responsible for the provision of equipment, services from its completion phase by means of the productive life of oil and gas wells. Wellbore intervention products and services are to produce the asset, deals with troubleshooting oil production problems, improve maintenance, and revitalize economical production. Technologically based tools use in wellbore intervention are tubing fishing system, casing exists, wellbore cleaning and temporary abandonment. (Baker Hughes 2010).2.1 ProfileBaker Hughes (Wikipedia 2010) provides reservoir consulting, formation evaluation, bore, completion and production products and services to the worldwide oil and gas industry. It has made impact in the oil and gas industry in providing reliable, serviceable solutions when and where to its customers to fasten costs, risk and improving on its productivity. From reservoir to the refinery, they contro l created value with high- consummation products and services to analyze, drill, evaluate, complete and produce oil and gas militia and then steer and refine the hydrocarbons. Innovation has been go of Baker Hughes, through conceived ground breaking inventions that has revolutionized the oil and gas industry. They have locomote and searching for solutions to conquer the next frontier in areas lots(prenominal) as Differential performance, Regions and geo securities industrys, Technology, Technical expertise, Drilling and evaluation, conclusions and production, Fluids and chemicals, Reservoir technology and consulting services.It is a top-tier oil bloodline line service company with a century-long track playscript which delivers solutions that uphold oil and gas operators make the most of their reservoirs that provides reliable, practical(a) solutions when and where to their customers at lower costs, surmount risk and improve productivity and helps oil and gas producers by providing practical technology to find, develop, produce and serve well petroleum reservoirs. (Wikipedia 2010)2.2 MissionStrive to launch an inclusive finale that values the diversity of our global workforce and sustains an environment in which employees squirt develop and r severally their ultimate potential.2.3 Vision world-wide team of diverse, gifted, and results-driven peck makes Baker Hughes the company of choice for our employees, customers, and communities.ENVIRONMENTThe environment comprises of two elements namely the Internal and External Environment.InternalThis part of the environment explores the organizations mission, vision, purpose and value, stakeholders and former, culture, organizational balance, process and competence, etc3.1.1 StakeholderStakeholder can be a person, group, organization, or system who affects or can be affected by an organizations executions. fit in to the definition above, Baker Hughes receivedholders comprises of the management, cu stomers, suppliers, government agencies, staff, local anaesthetic community, shareholders, political parties, union, trade association, owners, monetary community, activity group, customer association and group, media. Baker Hughes stockholder service is managed by Mellon Investor Services, a transfer agent and registrar who assist in managing the investment, keeps record of all(prenominal) outstanding stock certificate and the name of the person to whom it is registered. When stock changes hands, the agent transfers the ownership of the stock from the sellers name to the buyers name. At the end of individually day, they reconcile all transfer records and makes sure that the turn of events of shares debited is equal to the number of shares credited. It as well as uses the stockholder records to pay dividends and issue proxies. (Baker Hughes 2010)3.1.2 Stakeholders map subaltern evoke higher(prenominal)GROWTHCustomers, Union, Media,Trade Union, mediaStaff, Top solicitude, p artakeholders,Financial Community, Suppliers, localCommunity, CustomersGovernment, Shareholders,Management, governmental Group,Financial CommunityCustomers, Local Community,Media,3.1.3 CultureCompany culture is the grotesque qualities of the organisation. It determines how the workers act, postal code contributed to overall teamwork, innovation, technology, customer service, productivity, problem solving and quality.Baker Hughes delivers performance at well site through application of technical knowledge, practical experience, and dedication to quality service. This company has built a very high performance culture, based on its Core Values of Teamwork, Integrity, military operation and Learning. Programs in baker Hughes are introduced to encourage, recognize and reward perfect execution at rig site. Baker Hughes field performance is supported with worldwide operations networking organized around specific product lines, to enable best in class planning, logistics, equipment rep air and technical service. With the structure of Baker Hughes culture, shareholders can put in opinions and resolve it together, acting on new opportunities, move into new one and, creative in direction. (Baker Hughes 2010)3.1.4 Balance of the OrganizationThis share describes the balance of the product and services of Baker Hughes as a company.High SHARE economic crisisGROWTHHigh Revenue, High food market ShareLow Revenue, High Market ShareHigh Revenue, Low Market ShareLow Revenue, Low Market ShareThe Market Growth versus Market Share interprets the organizational balance of Baker Hughes, its growth in product and services, and Market Value. Efficiency and Effectiveness sum ups their value.Baker Hughes is a supplier of wellbore-related products and services provide products and services for drilling, formation evaluation, completion and production, and reservoir technology and consulting to the worldwide oil and natural gas industry. Baker Hughes business is dependent on the g reat(p) of its customers, expenditures, dedication to field emergence and production, oil and natural gas exploration, customers expectations for future oil and gas prices, economic growth, hydrocarbon demand and current and future oil and natural gas production. The balance of the organisation and its operations is organised into a number of geomarket regions, which report to nine different region presidents, then report to two hemisphere presidents. Product-line marketing and technology report to the president of products and technology. The presidents of westbound Hemisphere, Eastern Hemisphere, Products and Technology, Vice President of Supply Chain report to knob Operating Officer of the company.This organizational structure is intended to strengthen client- focussinged operations by moving management into the countries where its businesses are conducted. The product-line is responsible for product development and manufacturing, technology, marketing and delivery of solution s for customers to advance reservoir performance. While the supply orbit is responsible for development of cost-effective procurement and manufacturing of products and services. (Wikipedia 2010)According to Deaton C. C., (2010) Quarter trio was a good quarter for Baker Hughes. Our Drilling and Evaluation segment reported record revenue, record operating profit and record operating profit margins with 44% year-over-year incremental operating profit margins. Accordingly, we will address to invest in manufacturing capacity, make additions to our rental fleets, and hire and train field engineers to support our customers postulate through the end of the decade. (Baker Hughes 2010)3.1.5 Process / ValueIn Baker Hughes, integrity is the foundation of their individual and corporate actions in honesty, trustworthy, take none and ethical in our actions which drives an organization. The values of baker Hughes are the basis for maintaining a common culture. These cultures are Integrity, Te amwork, Performance, and Learning. Teamwork enhances their individual abilities and strengths to pass a common goal. Performance rightness, focusing on affairs that are fundamental drives the results that differentiates baker Hughes from other competitors in the oil and gas industry. Learning in an environment where benchmarking and adopting best practices is the see to achieving the potentials of individual and the company.According to Bradfield, D. H., (2010) The Company specialises in the design and supply of process packages and completely integrated systems for oil/gas production, refinery waste water treatment, petrochemical and power generation markets. Baker Hughes business is basically in two segments namely drilling and evaluation, and completion and production. The drilling and production provides product and services used to drill and evaluate oil and gas wells, drilling and completion fluids, directing drilling services, measurement while drilling (MWD), logging wh ile drilling (LWD). The completion and production segment provides product and services used in the completion and production phase of oil and gas wells. Its basically offers wellbore construction, casedhole completion, gumption control and wellbore intervention solutions. (Baker Hughes 2010)EXTERNAL ENVIRONMENTThis section of the organisation is where each the structure, strategy is affected or both.3.2.1 Five Forces AnalysisFive forces analytic thinking looks at five key areas namely the first appearance, power of buyers, power of suppliers, the substitutes, and warring rivalry.New Entrants.There is a lot of oil and gas serving companies all over the earth, barriers to entry into this industry are numerous to panic attack away the new companies. They vary depending on the area of product and service, market the company is situated. If we consider a company to supply pumping trucks needed at well sites which will very costly at a rate of one million pounds each. While other areas of the oil and gas business requires skilled manpower to handle this equipments. This category of company in the oil and gas sector such as these have higherbarriers to entry thanthose offering just drilling, support services or services. Sufficient gold is another big barrier to entry. New companies need to have fitting money to displace the living ones. These factors are also considered The economical value, the high or low cost of entry, ease of access to distribution take , cost advantages not related to the size of the, will competitors retaliate, government action, how important is differentiation. , very high if there are few but big players in the industry, the rate of cost reduction when switching customers is always low.Suppliers. Baker Hughes is one of the chairing oil and gas company in the world, much of this section of the business is dominated by powerful companies. Their large amounts of gigantic capital investment tend to weed out suppliers of rigs, ref ining pipeline. No much of competition, but have significant power over small drilling and support companies.Buyers.Power tends to go towards the buyer but nearly all commodities there are no much difference, the buyer goes for where prices are low and a better contract term.Substitutes. These are generally preference to oil which includes solar power, wind power, gas, coal, biofuel, nuclear energy and hydroelectricity. Oil is not powering automobile, it is very useful in other materials similar plastic. Baker Hughes can withstand the treat of substitute because of its specialty in areas directional drilling and seismic drilling. This company is critically analysed because of their product and services.Rivalry. The slow rate at which these oil and gas companies grow is what is facing most of them. Almost both company in this industry can do one thing there is a high exit barrier in the oil and gas companies. Aside of the companys scrap value of the equipment, if it not operatin g, then, it value-adding capability.Baker Hughes major rivalry is Slumberger, Halliburton and Weatherford. This is most in all likelihood to be high where entry is likely substitute products, suppliers and buyers intend to control the market. (Baker Hughes 2010)3.2.2. PESTLNEW ENTRANTSDEEP WELL anoint GAS. INC.SUPPLIERSAMOS INTERNATIONALTEK OCEANVTT MARITIMEBUYERSATLAS COPS, NORTH AMERICACOMPETITORSHALLIBURTONWEATHERFORDSCHLUMBERGER easingBIOFUEL3.2.3 VALUE CHAIN DIAGRAMSupport Activities of the companyFIRM al-Qaeda Administration, Legal, Financial Management, AccountingHUMAN RESOURCES Training, Recruitment, Personnel, staff planningPRODUCT AND engineering science science Production Engineering, Market Testing, RD, Product and Process Design, Drilling Engineering procurement Specification, Funding, Supplier Management, SubcontractingInbound LogisticsOperationsOutbound LogisticsSales and Marketing serveSupply Schedules,Raw material, check outs,Receiving,Quality control,Equipm entsProduction control,Manufacturing ,Packaging,Quality control,Drilling,Well CompletionDelivering,Invoicing,Order handling,Dispatch,Finishing goodsPromotions,Market research,Sales analysis,Order taking,Customer ManagementEducation and Training,Upgrades,MaintenancePrimary Activities of the company.SWOT ANALYSISStrengths, Weaknesses, Opportunities and Threats. SWOT is the privileged Strengths and Weaknesses of a firm and the environmental Opportunities and Threats facing a firm. SWOT analysis is a technique, which is widely used by managers to analyse a companys strategic situation. Baker Hughes effective strategy is derives from its internal resources (strengths and weaknesses) and its external situation (opportunities and threats). If accurately applied, baker Hughes has powerful implications for the design of a successful strategy.Strengths, Weaknesses, Opportunities and Threats (SWOT)FACTORSInternalStrengths crocked financial performanceStrong RD capability replete(p) product p ortfolioWide geographical presenceWeaknessesLack of scaleSettlement with DOJ and sulfurExternalOpportunitiesGrowth in global oil and gas drillingAcquisitions of BJ Services Nova Technology CorporationEnergy services in chinaDeepwater TechnologyThreatsIntense competitionRisks associated with conducting business outside the USstinting slowdown in the US seasonal fluctuationRenewable energyBaker Hughes is focused on expanding in high growth regions like Russia, Middle East, capitalizing in high oil price, profitability in the Middle East is far guaranteed.Baker Hughes is learning to swim in deeper irrigate which is a new demand in oil and gas industry. In deepwater technology, drilling is expensive and oil is drilled thousands of feet below sea level. Seasonal fluctuation poses a threat to baker Hughes profits. Renewable energy also poses a threat to baker Hughes demands. (Datamonitor 2008)STRATEGIC POSITION OF BAKER HUGHESBaker Hughes has invested on people, floor and technology. It served as the foundation for the next of strategy action designed to help increase market share and secure a long-term profitable growth. Their strategic position is in trinity-phaseImprove customers focus by improving management diversity and quality, order market segment to facilitate communication across the enterprise, reorganisation, customer segmentation and people strategy. pass on operational effectiveness hiring of the first chief information officer to lead enterprise wide information team, Outsourcing certain finance operations to reduce cost and improve efficiency, Hiring of vice president of supply chain to establish an enterprise approach to supply chain function, e.g. manufacturing, purchasing and logistics.Optimize product portfolio Build out reservoir technology and consulting group.Targeted research, development and engineering disbursal in global network of technology on key projects, Establishing of three project centers, namely completion and production fluid and chemicals drilling and evaluation. picking of significant gaps in product portfolio in areas like pressure pumping through the merger and acquisition of BJ Services and its product lines which areINTEQ provides drilling and formation evaluation.Baker Atlas wireline logging services e.g. advanced formation evaluation, production and reservoir engineering, petrophysical and geophysical data acquisition.Baker Hughes Drilling Fluids Fluid system and services e.g. optimise drilling and completion process, maximise hydrocarbon production and manage drilling waste.Hughes Christensen provides Tricone TM and PDC drill bits, ream while drilling and casing drilling technology.Baker Oil Tools completion, intelligent production and intervention solution to manage cost and reduce risk while maximising reservoir.Centri set up artificial lift systems e.g. submerging pumps ESP, specific engineering, project management, well monitoring services.Baker petrolite chemical technology solution for hydrocarbon production, transportation and processing, delivers pipeline integrity services. (Baker Hughes 2010)NEW TECHNOLOGIES IN WELL COMPLETION INTERVENTIONBaker Oil Tools, world leader in well completion and intervention solutions. Division of Baker Hughes, which provides completion through Packers and Flow Control, Subsurface Safety Systems, Liner Systems and Wellbore Isolation, Sand Control Pumping, Tools, and Services, Tubing-Conveyed Perforating, Systems. This branch of baker Hughes is sealing and anchoring technologies, planning, risk avoidance, maximising production, reduce intervention cost, and extend the life of well. Baker Hughes has made impact in the oil and gas industry, from the reservoir to the refinery they have created value with high-performance in their products and services to analyze, drill, evaluate, complete and produce oil and gas reserves and then transport and refine these hydrocarbons. (Baker Hughes 2010)These are the emerging technologies in we ll completion and interventionPackers and flow controls To increase profit by reducing risk and minimizing life of well cost.Subsurface safety system reduce risk and increase profit using subsurface safety valves.Liner system and wellbore isolation reduce risk and CAPLEX (Capital Expenses)Sand control pumping, tools, and services ensures operational excellence in uncon hardated formation at less risk.Tubing conveyed perforation achieve maximum production using efficient completion solution.Expandable solid tubular system maximise hole size with significantly reduce non productive time (NPT).Fishing service reduce the cost of wellbore problem. lawsuit exit increase profit by accessing previously uneconomic reserves and bypassing troubleRemedial and stimulation lower risk, boost effectiveness of amends and stimulation operations.Baker Hughes has been know for success in technology innovation. Local teams are supported by global centers of excellence where scientists push the boundar ies of value-adding technology to find solutions for progressively more complex technical challenges at consecrated innovation centers. (Baker Hughes 2010)IMPACT OF STRATEGIC POSITIONThe impact of strategy position has enhanced their productivity, efficiency and effectiveness in areas such as orbiculate Benefits Strategy, Labour and Management Relations, Employee Development, Recruiting and Retention, Global Workforce.Workforce_jobtype_regionWorkplace Diversity and Equal probabilitySalary_ratioTurnoverEmployee_turnoverTurnover_region_jobtypeBaker Hughes strategic position will impact on a nations economy by implementing programs that provide sustainable benefits to the people and communities operation. Baker Hughes employment program is designed to promote diversity in study varied experiences and skills are highly valued and applied toward common goals. These strategies are implemented through assurance of job opportunities for local citizens at every level of the organization. Also, preparation and development program to advance and succeed in their different careers. The governments, non-governmental organizations, academic institutions, customers, and employees are engaged to address the social needs of community stakeholders, education is placed as a priority in baker Hughes worldwide contributions. Employees are supported by a culture which values workplace diversity, team work, together across geographies and product-lines to deliver advanced technology solutions. The technology program in baker Hughes promotes professionalism, development of science, engineering and employees with technical abilities in their career advancement opportunities based on their performances and contributions to baker Hughes. Global Learning and Development Program provides non-technical training to professionals in corporate and support roles. (Baker Hughes 2010)Baker Hughes is committed to national caseed to add people and its economy. Expanding its investments in ad vanced technology, developing oil and gas markets, identifying national content development, as a measure to operational success. Committed to promoting three key areasglobal workforce, local suppliers and communities. With focus on these areas like global workforce, local suppliers and communities, the region and each geomarket management team implement specific plans in adapting with governments legislation, and develop businesses, communities and its local citizens. Engaging customers as partner requires an organisation with the training and experience to deliver effectively. With global workforce, local citizens are represented in managerial, operations and technical positions collectively delivering. There is impact through talent acquisition program by building students.Baker Hughes is aiming to continue change magnitude the composition of workplace and career development. In community level, national content is encouraged through social contributions, which are majorly focus ed on education. In expanding national content plans, baker Hughes is looking for opportunities to build on the success of existingeducational programs. (Baker Hughes 2010)CONCLUSIONBaker Hughes has invested significantly in people, infrastructure and technology. These investments served as the foundation for the next set of strategic actions designed to help increase market share and achieve long-term profitable growth. change magnitude market share and achieving long-term profitable growth requires Baker Hughes to follow up on two related enterprise strategies continue to build global capabilities to serve customers around the world, and deploy customized local solutions to decent customers needs in each geographic market. For these strategies to be achieved, first, improve customer focus, that is understand customers and proactively meet their needs. Second, achieve operational effectiveness and improve overall cost position. Third, optimize existing technology portfolio and f ill strategic gaps, including reservoir engineering capabilities and pressure pumping services. To meet this target, baker Hughes needs to carry out a major shakeup and targets more mergers and acquisitions. (Baker Hughes 2010)