Running Head STRATEGIC MANAGEMENT .docx

Running Head: STRATEGIC MANAGEMENT
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STRATEGIC MANAGEMENT
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ConocoPhillips Company: Strategic
Supply chain
ConocoPhillips Company is a Houston-based gas and oil
company. Chima (2011) says that ConocoPhillips has adopted
the pull model for it crude oil products. The business model is
aimed at matching the customer preference for low-priced oil
environment. The aim is to keep operational cost low, so prices
of oil products are kept low. Focusing on the demand has led to
a production that matches the market's needs. The results have
been a lower production, cut on storage cost and improved
pricing. The oil supply of the firm is 500,000 barrels per day
which can meet the market demands. There are no losses that
accrue for all oil is dispatched to the market without having to
look for customers. Availability of oil in ConocoPhillips
ensures the firm to offer it at best price for they do not have to
offer a discount on the case they had to do when they had
excess oil in their storage facilities.
Industry Balance of Power: include Sources of Channel Power
ConocoPhillips draws its power from its enormous cash flow, a
huge supply of oil and it’s reputation. The firm is known to
produce pure products which have earned the firm a large
customer base worldwide. ConocoPhillips has a large customer
base who are spread globally. The customers are drawn from
Europe, American, Asian and African markets. The customers
ensure that all 500,000 barrels produced each day are sold.

ConocoPhillips can produce huge supplies of crude oil to the
global market. According to Pune (2016), the firm produced a
500,000 barrels a day against a global demand of 1.4 million a
day. The company holds a 6.25 percentage of the daily
production. The firm controls a 35.7 percent of the global
market sales from its daily basis. ConocoPhillips has healthy
cash flow. The cash flows able to meet its operations needs, pay
dividends and meet CapEx requirements. Its average projection
of a 50 dpb will earn the firm a revenue of $ 6.5 billion which
way above the normal operating cash flows of $1.5 billion.
External Trends
There is a decline in consumption of oil products as countries
discover their oil deposits and adoption of green energy (Chima,
2011). Countries like Kenya and Uganda which were customers
of ConocoPhillips have stopped consuming oil products from
abroad. The countries have started producing their oil products.
The countries have started selling globally reducing the market
shares of existing companies for they offer a lower entry price.
Green energy is on the rise. Pune (2016) says that geothermal,
the wind and solar energies have been adopted globally at an
increasing rate. Green energy is renewable as opposed to oil
which has to depletion of natural deposit. Consumers have
found out that green energy is less pollutant to the environment
and are committed to reducing pollution to the environment.
Green energy is cheap than oil supplies meaning consumers
want to cut their operating expenses related to recurrent
expenditures of purchasing oil products.
E-commerce/Technology
Social media marketing has revolutionized the way oil prices
are determined. Customers have taken to the digital marketing
to increase their bargaining power. According to Pune (2016),

the customers rely on Facebook pages, and Twitter handles
pricing of oil products to make decisions on the company that
will offer the best oil prices. Customers will compare pricing of
oil and gas of ConocoPhillips and that of competitors like Shell
BP company before making the buy decision. Customers will
choose to buy from company with the best selling price offer
Regulation/New Laws
The President Obama’s Environmental Protection Agency’s
Clean Power Plan has had an adverse impact on consumption of
oil products (Pune, 2016). The Clean Power Plan is a regulation
whose aim is to reduce greenhouse gas emissions. Oil has been
the greatest contributor of greenhouse emission. Greenhouse
emission is dubbed to cause health problems. The Clean Power
Plan aims at making the environment safer for citizens. The
Clean Power Plan promotes the use of renewable energy.
ConocoPhillips is affected negatively by local and international
demand for oil has reduced from 1.8 million per to 1.4 million
barrels per day as consumers take green energy.
Environment, Political, Social Trends that Impact Business
According to Chima (2011), depletion of the environment is
happening. As ConocoPhillips drills and exploits the ground for
oil, it leaves the open ground and degrading of soil due to
operations that make the environment not suitable for
agriculture. The environment is polluted when the oil used in
engines and machines for carbon dioxide is generated as a by-
product. Cases of carbon monoxide are also recorded where the
oil is not fully burnt.
Obama administration spells doom to the energy sector.
Promotion of the Clean Power Plan has seen the global demand
for oil drop by 0.4 million barrels per day (Pune, 2016). The
plan promotes renewable energy options of the wind,

geothermal and solar energy. The result is a decline of oil
products for green energy.
ConocoPhillips reduction in operations has rendered people
jobless. The effect runs down the supply chain. Chima (2011)
stated that the job cuts happen when services are reduced and
mechanized. Job cuts affect persons regarding reduced
purchasing power.
References
Chima, C. M. (2011). Supply-chain management issues in the
oil and gas industry. Journal of Business & Economics Research
(JBER), 5(6).
Pune, M. (2016, November 3). Global Automotive Lubricants
Market Size, Share, Industry, Competitor Strategy Forecast to
2027. Retrieved from:
http://www.einnews.com/pr_news/352301854/global-
automotive-lubricants-market-size-share-industry-competitor-
strategy-forecast-to-2027
Running head: CONOCOPHILLIPS COMPANY REPORT
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CONOCOPHILLIPS COMPANY REPORT
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ConocoPhillips Company Report

ConocoPhillips Company Report
Introduction
ConocoPhillips is a renowned cosmopolitan energy corporation,
situated in the U.S. It has got its center of operations positioned
at the Energy Corridor – Houston, Texas. Currently, it is the
biggest globally in terms of exploration of pure-play type of
energy. In terms of segmentation, it is accredited to be one of
the organizations with a viable segmentation in terms of
company targets, contact segmentation and other various forms.
In this paper, it takes turn discussing more regarding the array
of segmentation present in this company.
Industry Segmentation Scheme
According to most of the companies, they often practice five
types of industry segmentation namely; Needs, Lifecycle with
Company, Potential Value, Life Stage and Value.
ConocoPhillips on the other hand, has settled on delivering to
the client what they need, provisioning accountability for any
given kind commitments that the company pledges to as well as
steering the driving goal setting in togetherness with
engagement (Gibson, 2010). In the various business units of the
company, they have a requirement of establishing various action
plans for the purposes of outlining definite objectives and aims.
The given objectives and aims as already mentioned above,
subsequently addresses the company’s priorities, assets as well
as to the shareholders who are contemporary within the given
region.
Within the spectrum of each and every segmentation plan, there
is the inclusion of particular in depth actions that entails precise
accountabilities and timeframe. As a whole, the company tend
to incorporate sustainability in the better part of its industrial

segmentation scheme. At the same time, it is also important to
note that when it comes to adherence to performance and
sustainability of goals, the business is forward looking from a
given outlook.
Segments the Company Targets
Needs: It is the first segment that this company targets the most.
According to the marketing executives of the company, the
company has for a long period of time, categorized its clientele
base in regard to likeness of their needs, urgencies as well as
the anticipated outcomes for support relations. The benefits of
this given segment are that it tends to be effective against client
know-how on the end outcomes. Such outcomes consists of;
expedition of low-effort exchanges and reduction of complaints.
The above segment is thereby important to the company because
it bring into line the service contributions with consumer
sustenance needs (Johnston and Johnston, 2014).
Value: As it is known to be the largest in the world in terms of
the exploration, production, conveyance and marketing of
bitumen, crude oil and other energy products, it must be having
an extended customer base. It means that not all the customers
can receive similar attention and service at the same time. The
company therefore classifies its general customers with a basis
on their on-going worth to the company. When we talk about
worth in this case, we refer to the given customer’s viability,
loyalty as well as to their overall product holdings.
Contact Segmentation (Marketing Communication)
The company practices four main types of marketing
communication. They include; Advertising, Sales Promotion,
Public Relations and the much popular online platform. With
considerations as being the utmost powerful expedient of
marketing, ConocoPhillips Co. uses advertisement as a platform
to reach extended audience. It also comes handy with its success
in the swiftness of message conveyance. PR on the other hand,
is used by the company as it is productive when it comes to the
creation of brand awareness among the customers of the firm, in
a more appropriate approach. Through PR, the product is

communicated in an enhanced objective outlook to the customer
(Gibson, 2010).
Sales promotion as an example of marketing communication
used by the company uses various tactics in reaching the
consumer. For instance, sales promotion incorporates discounts
in order to attract and retain customers. Many purchases often
make spontaneous purchasing resolution instantly. In given
situations, sales promotion is a very vital tool in the overall
marketing of the firm. Online platform is a very useful
marketing communication strategy. It involves the use of
various online sites and marketing websites to market the
product. Most common sites include Facebook, Twitter,
Instagram and other sites. The world of today has numerous
people who use online sites consistently. This makes it a very
good platform to incorporate marketing of the firm’s products
and services.
Trends in Customer Needs, Values, Usage
The first customer trend as observed in the company is ‘The
ultimatum for the prompt and the Expectation of accretion. The
company understands well that the client base of today, have
got an expectation of personalized and combined information in
an instant manner. Customers of today have changed a lot. It is
therefore important to disseminate any new information to them
instantly. Timeliness is another customer need that the company
recognizes. The company is known for its outstanding great
service as a result of their timeliness in delivering and
responding to the customers (Johnston and Johnston, 2014).
When it comes to values, value based buying is an important
factor for the company. The company has realized that the
shoppers of today have become purposeful and attached any
product they buy or service that is rendered to them. For this
expectation on value, the company ensures that it aligns the
values of the company with that of the customer. In usage, the
company admires its endurances towards greening of the
customer. The firm is kind of sensitive to the environment. It
tries its best not to pollute the environment. At the same the

company plays an important role in the general sensitization to
the public concerning the importance of protecting the
environment.
Conclusion
In terms of industrial segmentation, ConocoPhillips is an
example of those companies that commits to delivering to the
customer wholeheartedly. This paper is a perfect example of the
company’s report in relation to an effective industrial
segmentation scheme.
References
Gibson, C. H. (2010). Financial reporting & analysis: Using
financial accounting information. Mason, OH: South-Western
Cengage Learning.
Johnston, D. C., & Johnston, D. (2014). Introduction to oil
company financial analysis. Tulsa, Okla: PennWell.

Running head: CONOCOPHILLIPS COMPANY
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CONOCOPHILLIPS COMPANY
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ConocoPhillips Company
Company’s Product Market
ConocoPhillips Company has the aim of powering
civilization. The company explores, produce, transport, and
market natural gas, crude oil, bitumen, liquefied natural gas,
and natural gas liquid. The products of the company are
marketed on a worldwide basis. The energy being marketed in
different parts of the world play a significant role when it
comes to making possible human progress together with

economic development (Miller, 2012). ConocoPhillips has the
ability to supply and market its products to different parts of the
world due to the presence of six operating segments. The
segments are defined by regions. These segments are the Middle
East and Asian Pacific, Europe, Canada, Lower 48 and Latin
America, Alaska, Other Internationals.
Porter’s Five Forces Analysis for INDUSTRY (include
competitive intensity)
Porter’s Five Force Analysis for ConocoPhillips quantities
competitive force through means, such as bargaining power of
buyers, bargaining power of suppliers, the threat of substitutes,
barrier to entry, and degree of rivalry.
· Bargaining power of buyer – is low. The buyers of gas and oil
products are governments, large corporations, and individual
users. The demand for oil and gas products is now very high.
The worldwide consumption rate is 31 billion barrels of crude
annually. Buyers have little control in this industry since prices
are driven market factors. Buyers have no other alternative
since there are no substitutes.
· Bargaining power of suppliers – is medium. Supplies that
provide technical equipment and services are many. On the
other hand, demand for technical supplies is high. Due to this
high demand, suppliers have certain leverage with regards t
technical support and hardware. Examples of some of the
suppliers in this industry are Halliburton and Schlumberger
among others. The influence of these suppliers is medium.
· The threat of substitutes – is low. There are very few
substitutes for oil. Although, there is a shift to renewable
energy. There is the entry of bio-fuel in the market. Bio-fuel is
producing some kind of competition when it comes to
traditional means of energy. However, biofuel is not a big threat
to gas and oil products. No immediate threat is evident in the
market for the products of the company. This means that there
is no ready replacement for oil.
· The barrier to entry – is very high. This is because capital
required to start this form of business is very high. Entry and

competing with existing companies required large access to
finance. Looking at ConocoPhillips, it spent about $143 billion
with regard to the total cost of goods. Exploration together with
production cost is very capital intensive.
· The degree of rivalry – is medium. The degree of rivalry is
medium since there are many competitors, especially looking at
vertically integrated gas and oil industry
Major Competitors (and Company) Market Share
In the entire gas and oil industry, Saudi Aramco is the
largest company. There are also other largest publicly owned
companies competing with ConocoPhillips, such as Total SA,
BP PLC, Royal Dutch Shell PLC, Chevron, and Exxon Mobil
(Miller, 2012). Of these competitors market their products
globally. Competition is very stiff since the company competes
with state-owned, public, and private organization in the facets
of the E&P business. ConocoPhillips has had that 3rd largest
worldwide natural gas and liquid reserves. Even with revenue
deterioration, the company has increased its market share. It has
increased its market share to 55.87 percent.
Overall Demand Forecast for the Industry
The demand for oil in 2016 and 2016 will be higher compared to
the previous year. The production of oil has been going down in
the United States and other parts of the world. With this, there
is going to be an increased demand for in the market. The steep
decline in production will increase demand hence increase sales
of the company's products. “ConocoPhillips is expected to
benefit since for each $1 increase in Brent prices, Conoco's net
income will improve in the range of $100 million-$120 million,
while for each $1 increase in WTI prices, its net income will go
up by $35 million-$45 million" (Attri, Pahwa, & Singh, 2012, p.
30).
Industry Market Structure/Competitive Dynamics
Entry to the oil and gas industry is not easy due to the large
capital investment that is required. This makes the industry
have a small number of firms. These firms among them
ConcoPhillips, Total SA, BP PLC, Royal Dutch Shell PLC,

Chevron, and Exxon Mobil, work together so as to have control
to the majority of market share. Therefore, the type of market
structure that is evident in this case is an oligopoly.
Industry Competitive Trends
The total oil and gas demand keeps on growing throughout
the world. This is as a result of low fuel prices. Dimension for a
competition is going to change for companies operating in the
industry (Kelland, 2014). Competitors are going to be forced to
reduce their production costs so as to remain competitive in the
market. The competition will continue to be stiff among the
existing companies since there is no entry of new firms in this
industry.
References
Miller, M. (2012). Strategic decisions and shareholder value: an
analysis of ConocoPhillips.
Attri, R., Pahwa, D., & Singh, M. (2012). Learning for Public
Sector Oil Marketing Companies in India to Manage Business
in Turbulent Times. Prabandhan & Taqniki, Management
Research Journal, 6, 29-36.
Kelland, M. A. (2014). Production chemicals for the oil and gas
industry. New York, NY: CRC press.
Running head: COMPANY PROFILE
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COMPANY PROFILE
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ConocoPhillips Company Profile

ConocoPhillips Company Profile
General Company Overview
ConocoPhillips is a multinational, integrated energy company.
According to the size and locations of its operations, it is the
third-largest integrated energy company in the United States
(ConocoPhillips, 2016). The company is based on market
capitalization on oil and gas reserved and productions. The
company is considered the largest refiner in the United States.
The company has the eighth-largest reserves and is the fourth in
largest refiner in the world. Additionally, the company is known
for its technological expertise in the deep water exploration and
production of oil. The current advancement in technology such
as the use of 3-D seismic technology and high-grade petroleum
coke upgrading are used in reservoir management and oil
exploitation. As an international corporation with its
headquarters in Houston, Texas, the company operates in more
than forty countries worldwide.
Regarding its size, the company is quantified to be the larger
corporation with an approximately 35800 employees worldwide
(ConocoPhillips, 2016). The company’s earnings and
performance are vast and outstanding with an asset value worth
$93 billion. Similarly, ConocoPhillips is among the public
trading companies in the world and American market. It is listed
on the New York Stock Exchange, Yahoo Finance and Google
Finance among others. The core areas of the company’s
operations are natural gas collection, processing, and marketing
to the enterprises in the same industry. Secondly, the company
has a greater synergy in petroleum exploration and production,
as well as petroleum refining, marketing, and supply and
transportation among others. Thirdly, the company trades on
chemicals and plastics production and distribution under
Chevron Phillips Chemical Company LLC. Lastly, the company
is keen on venturing into new business worldwide.
Company History
ConocoPhillips Company was incorporated in November 2001

as an independent exploration and production company
(ConocoPhillips, 2016). The company diversified in
exploration, marketing, and distribution of crude oil, bitumen
and natural gas among others. The categories through which the
company operates enhance its performance in the industry. The
company’ operations are categorized in in six segments that are
defined by the geographical locations. The regions include;
Alaska, Canada, Europe, Lower 48 and North Africa, as well as
Asia Pacific and Middle East (ConocoPhillips, 2016). Regarding
the company’s net worth, its portfolios include North American
unconventional assets and oil sands assets in Canada.
Conversely, the six segments of the company’s operations
influence the portfolio spectra of the organization. Each region
is treated differently on the economic level they endowed to.
For instance, Alaska segment is majorly meant to explore for
produce, transport, and marketing of crude oil and natural gas
liquids among others.
Nevertheless, the company operates in other significant areas
such as Kapurak Field and other four satellites fields.
Additionally, other international segments include exploration
activities in Colombia, Angola, and Senegal. The company is
well-endowed with many oil exploration sites that make it more
stable to satisfy the need of customers. ConocoPhillips
Company holds exploration interest in two blocks such as Block
36 and Block 37 respectively. In this context, the size of the
two block productions totals to approximately 2.5 million gross
acres and many more areas worth its exploration. The
company’s prospectus and explorers are determined to increase
the exploration sites for the company. As a non-governmental
corporation, ConocoPhillips strive to maintain ethical behaviors
for the moral good of the public. There are many corporate
responsibilities administered by the company. Similarly, the
company reshapes oil industry by use of technology like 3-D
seismic.
Company Strategy

The competitive landscape in the oil industry is more diverse or
complex as other sectors. There are many challenges associated
with business going international. To remain relevant and
embrace in harmony in business operations within foreign
countries, ConocoPhillips designs strategies that placed its
competitive advantage at a higher notch. Among the strategic
initiatives that company employs today include liquids- rich
plays that are currently gaining grounds through the Eagle Ford,
Bakken, and Permian plays. With this initiative, the company is
projecting an average of 1.599 million barrels of oil. The
estimation believed on the project to track and deliver an
average annual production, as well as margin growth of 3-5%
(ConocoPhillips, 2016). Additionally, the new strategy that
shifts the interest of the company to Shale projects a different
outcome in the enterprise. As the company appraises Shale
areas for exploitation, the number of acres owned by the
corporation is expected to increase shortly. This strategy is
contrary to the peers' actions in Shale areas. The company has
decided to do things differently to balance and accelerate
production with value, thus accumulating yield with impressive
results.
Company Competitive Advantage
According to company’s insight, the dynamics in oil industry
requires sober competitive strategies that will address the entire
challenges experienced by the stakeholders. One of the primary
competitive advantages of the ConocoPhillips is the use of
technology. The use of 3-D seismic in unconventional reservoirs
and exploration management has placed the company in a better
position to compete their peers. The deep water exploration
requires advanced technological skills and equipment to
minimize waste, thus aiding efficiency. The company views the
use of technology as the agent of smart growth that play a
pivotal role in establishing competitive advantage necessary to
deliver quality services. Similarly, the use of technology
improves the company’s returns, thus minimizes loss rate to the
firm. Moreover, the company is directly involved in corporate

social responsibilities in areas of their operations. They provide
education, medical facilities, and public provision utilities like
water to the society. This has created the sense of belonging and
concerned, thus controlling larger market share and customer
loyalty.
Company Financials
ConocoPhillips publish its financial
reports in four quarters. the table below shows trend analysis.
Annual Financials for ConocoPhillips
Fiscal year is January (USD)
2011
2012
2013
2014
2015
Sales/Revenue
63.29B
58.26B
54.57B
52B
29.33B
Cost of Goods Sold (COGS) incl. D&A
43.36B
40.32B
38.69B
40.08B
32.55B
COGS excluding D&A
36.06B
32.87B
30.81B
30.58B

20.37B
Depreciation & Amortization Expense
7.3B
7.45B
7.88B
9.5B
12.18B
Depreciation
7.3B
7.45B
7.88B
9.5B
12.18B
Amortization of Intangibles
-
-
-
-
-
Gross Income
19.93B
17.94B
15.89B
11.93B
(3.21B)

The table above shows a section of financial reports for the
company from 2011 to 2015 fiscal year (MarketWatch, 2016).
The performance index of the company shows improvement in
the operations of the company. While viewing the company’s
financial ratios, the company’s profitability index in 2015
shows strong financial base, thus better performance. According
to Google Finance, 2015 fiscal year recorded the lowest Diluted
Normalized EPS. The New York Security Exchange shows the
trading value of the company standing at $ 43.13 on the higher
side and $ 41.46 on the lower side. Regarding the security
prices, the performance index of the company is bitterly placed
(GoogleFinance, 2016). Therefore, the company’s financial and
general performance is relatively stable and worth investing in.
Robert Kaplan Balanced Score Card
To measure performance and quality of services offered to
customers, ConocoPhillips make use of balance score card to
streamline all their performance objectives. The company is
determined to establish their employees’ safety operations to
reduce risk. To efficiently achieve risk reduction, the company
employ internal auditors who are highly trained to carry out
both financial and nonfinancial auditing to the company.
Auditing practices refer to assessment and verifications of
financial performance and non-financial issues. Therefore,
safety operations for employees remain the primary objective of
the enterprise. Additionally, training and performance appraisal
aids the organization to achieve the best results. Assessment of
exploration sites by the experts also records on a high balance
of score by the organization. The concept of balance of
scorecard has been well used by the company especially while
acquiring new ventures.

References
ConocoPhillips. (2016). Conocophjillips com[pany profile.
Retrieved from Conocophillips Company:
http://www.conocophillips.com/Pages/default.aspx?utm_source
=Google&utm_medium=PaidSearch&utm_campaign=Branded&
utm_content=Conoco_phillips&gclid=Cj0KEQjwx96-
BRDyzY3GqcqZgcgBEiQANHd-
nopYun5enaYd3TJLv7eNprLGarq0X4w5EFfWHIR2kXwaAsq58
P8HAQ
GoogleFinance. (2016). ConocoPhillips Financial Summary.
Retrieved from Google Finance; Financial Analysis and
summary:
https://www.google.com/finance?fstype=ii&q=NYSE:COP
MarketWatch. (2016). ConocoPhillips Annual Fiunancials
Report. Retrieved from MarketWatch; New York Markets:
http://www.marketwatch.com/investing/stock/cop/financials

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