Helmerich and Payne – Value Added Chain and Diversification Analysis
Has to be about the company Helmerich and Payne, a US based oil and gas drilling company.
The readings for this week provide the terminology and concepts associated with integration, along the value-added chain and diversification of products and services offered in the marketplace. For this module:
Research the firm’s value chain and its diversification strategies. Look for opportunities to improve competitive advantage and ROIC through vertical integration or outsourcing. Research the levels and types (related versus unrelated) of product diversification in their product lines or services. Look for strategic rationale in building the “portfolio” – what capabilities and competencies are being leveraged and how? Also, look for vehicles of diversification –acquisitions and mergers, joint ventures, strategic alliances, and partnerships that are associated with vertical and horizontal integration. This discussion should differ from last week’s vehicles of diversification section, which focused on using vehicles for regional expansion.
Analyze the information in the context of diversification strategy frameworks presented in the readings.
Based on an understanding of the firm’s competitive advantage, what is being leveraged vertically and horizontally, and how is diversification of the firm shaping its competitive advantage? How is it shaping the firm’s ROIC in the short run versus the long run (i.e., over time)? Again, attempt to find changes to this metric in correspondence with these types of decisions being made within the company.
Report your findings as a description of the firm’s Value Chain and Diversification strategy. Include critical analysis of the observed strategy, including the rationale for outsourcing. Can strategy alternatives be used, in related or unrelated industries, that better fit the company’s environment? Is there diversification opportunities that require capabilities investments not yet considered?
Here are some examples: 1 Links to an external site.& 2Links to an external site.
Recommended outline (if a section does not apply to your organization then state this in your paper):
Value chain analysis (example Links to an external site.) (i.e. the core level of the organization)
Value-Added chain (i.e., Vertical integration or how they have diversified out from their core activities)
Upstream
-Vehicles for diversification
Downstream
-Vehicles for diversification
Horizontal integration
-Vehicles for diversification
-Related and unrelated diversification – explain which strategy they use
Outsourcing activities – what do they outsource? what should they outsource?
Impacts on ROIC
Impact on their competitive advantage
Note: student examples are simply examples and may include errors, use these examples with your best judgement. AVOID using these as templates as they might not work for your selected company. For example, students in past classes have used the exact same headings as those provided in the examples, but the headings did not work for their company and caused them to fail an assignment. Remember to use critical thinking and report in a manner that best suits your company.
