Pacific Drill Case Solution & Answer

Pacific Drill Case Solution


Climate change and global warming are the social issues that have affected the consumers’ buying decision, in addition to which, the consumers also expect the companies to consider their corporate social responsibilities while  exploration and drilling. To maintain its reputation; Pacific Drill would have to opt for such activities that would help it in maximizing its reputation and would help it in increasing its values.


Technology is an essential factors that can help the company in reducing its operational cost. It can also help the company in introducing innovation in its procedures. The company needs to  align its upstream and downstream partners in orderto develop an efficient business process. The company should outsource its activities because doing so tends to reduce its overall process related cost. Due to an intense competition in the industry; the company needs to adopt technology and use renewable energies, for which it needs to have highly skilled employees. The company is focused on technology and innovation. Due to the company’s business nature; it is essential for the company to become technologically sound. The company is also doing well in exploration.


The company is liable to meet the legal requirements associated with the business operation, and it should be focused on the techniques that would help it in reducing the risk of any accident from taking place in the organization, because there is a higher risk of accidents in the industry. And there are legal implications that for the companies in case of any accident, i.e. oil spills and its leakage in ocean water. The company has to deal with new rules and regulations related to rock oil trade, and it has to compliance with the overseas laws as well.


Global warming and climate change are the main business issues to address which the company needs to use its resources in an efficient way in order reduce its fossil fuel energy equipment usage. The company needs to use environment friendly technology which will help it in building its reputation in the market. The activities in oil industry tend to have a huge impact on environment.



Pacific Drill is the first mover in the industry touse new technologies for drillship. Pacific Drill has a major business partner that contributes in its business revenues, i.e. Chevron. The company is efficient in performing its business process, which enables it to enjoy a strong safety background that allows it to perform its job on time and without any misshape. The company is specialized in DGD operations.


Pacific Drill does not have any contract in line, but it has ordered two drill ships. The concerns of Chevron was not to make any changes in the company, as it was insisting the company to cancel its current contracts due to lower oil prices. The company has a very deep connection with Chevron and it is not possible for the company to diversify its client’s base, as it does not have any diversification in drilling types.


Currently,Pacific Drill has an opportunity to diversify its services in order to maintain its profit margins, alongside which it also needs to focus on diversifying its client’s base and its services.


Pacific Drill is operating in a competitive industry where the competitors are using new technologies to reduce the overall business costs. Along with that, the overall oil prices are decreasing by which the economy is also adversely affected. The company has an additional offshore American drilling.

Five Forces Analysis

Threats of the latest Entrants

New entrants in the industry bring innovation, but they are required to make a huge investment to start operating in the oil industry. New entrants bring innovation, new ways of purification and refining, but the current players in the industry have already reached to their economies of scale, irrespective of the projects. The threat of new entrant is the industry is low because of government’s rules and regulations, political pressure and investment’s requirement.

Bargaining Power of Suppliers

The companies operating in the oil industry have numerous suppliers as there are a few major players in the market and the suppliers are dominant in the industry. The company’s image and business value have allowed it to have the negotiation power due to its global business image. The bargaining power of suppliers is moderate in the oil industry.

Bargaining Power of Buyers

The bargaining power of buyers is low in the oil industry, as there is an existence of specification option in the market. Due to the involvement of the government; the buyers usually pay for the process set by the government. The companies estimate their prices based on the cost of exploration and processing, for which they look for profitable deals.

Threats of Substitute product or Services

The threat of substitute is low, because oil and gas, and natural reserves and almost everything around us, needs oil or gas. In the near future, this ratio will go down because the companies are working on oil and gas free electrical appliances and gadgets. But, it is not possible to totally replace the consumption and usage of oil. The threat of substitute in oil industry, in terms of product, is low, but the technology will evolve with time.

Rivalry among the prevailing Competitors

The rivalry in the global market is increasing, and the companies are making full efforts to dominate the oil market. The trade is also growing in the oil industry. Alongside this, there is also a low switching cost in the industry andlow brand loyalty among consumers and clients.


Key Resources

Pacific Drill has a specialized drilling process in deep water, alongside which the company has its alliance with its clients as its major source. These partnerships are major contributor that contribute to the company’s revenue generation. Moreover, the company also has a good  reputation in the industry. Its tangible assets are its physical assets and other equipment that help it in carrying forward its business operations. The financial resources is the amount which the company invests in the business and also the funds which it has. The company’s intangible resources are is its human capital and intellectual property rights.


The company has the capability to perform its business operations in the industry and to build its reputation. The company is also capable utilizing its resources in order to achieve its business goals.


Pacific Drill is competent enough to develop a competitive edge in the industry and to maintain that competitive edge.


Key strategies

The key strategies which Pacific Drill is following, are: differentiation strategy and focus strategy………………………

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