Supply chain SWOT analysis of schlumberger

1. ASSIGNMENT # 2
(SCHLUMBERGER SWOT ANALYSIS)
SIR KHALID HAFEEZ
OCTOBER 8, 2015
ZAKA UL HASAN, ASIM MEHMOOD, M. ANEEQ QURESHI, UMAIR ALI BUTT, NASIR KHAN
SOURCING & LOGISTICS

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Contents
Company Brief .............................................................................................................................. 2
Key Suppliers ................................................................................................................................ 2
Key Customers .............................................................................................................................. 2
Strategic Alliances......................................................................................................................... 2
Comparative Analysis................................................................................................................... 2
Strengths ........................................................................................................................................ 3
Weaknesses.................................................................................................................................... 3
Opportunities................................................................................................................................. 3
Threats ........................................................................................................................................... 4

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Company Brief
Schlumberger Ltd. (NYSE: SLB) is an oil and gas equipment and services company founded in
1926 and based in Houston, Texas. The company provides a wide range of services, including
technology, project management, and information solutions to the international petroleum
industry. Schlumberger operates through three segments: Reservoir Characterization, Drilling,
and Production. The company has approximately 126,000 employees and operates in more than
85 countries.
Its products and services ranges from seismic acquisition and processing; drill bits and drilling
fluids; directional drilling and drilling services; formation evaluation and well testing; well
cementing and stimulation; artificial lift, well completions and well intervention; and consulting,
software, and information management.
Key Suppliers
Schlumberger and its subsidiaries have thirty-four disclosed customers at this time. Many of the
suppliers are smaller oilfield services companies that specialize in creating drill bits, chemicals,
and smaller technological pieces. One of its suppliers is one of its bigger peers, FMC
technologies. Schlumberger’s diverse supplier list keeps the power on their side in negotiations.
Key Customers
Twenty-eight customers are currently publicly disclosed. Schlumberger services two large U.S.
upstream players: Breitburn Energy Partners, L.P. and Chesapeake Energy Corporation. The
geographical diversity of its publicly listed company shows the strength of its international
portfolio. AT Working together with local/regional governments Financial restrictions due to
Local and European Financial Crisis according to the implementation of sustainable procurement
and also to advancements
Strategic Alliances
The company also has formed several strategic alliances with oil and gas equipment and services
companies, eighteen of which are publicly listed. Most notably, the company partners with
National Oilwell Varco, one of largest competitors. Schlumberger has also partnered with
Cameron International to take on subsea projects.
Comparative Analysis
Schlumberger is a leader in the oil and gas equipment and services industry and maintains four
primary competitors: Halliburton, Baker Hughes, National Oilwell Varco, and Weatherford
International. In addition, it faces competition from smaller companies that operate in niche
markets, Nabor Industries and FMC Technologies. These two specialize in producing specific
hardware like drill bits or subsea “trees”. The firm is also starting to face pressure from newer
foreign competitors.

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Comprehensive SWOT profile of Schlumberger procurement department provides an in-depth
strategic analysis of the company’s businesses and operations.
Strengths
 High R&D
 Asset leverage
 Political support
 Global Presence
 High growth rate
 Reduced labor costs
 Stable demand pattern
 Market share leadership
 Effective communication
 Experienced business units
 Extensive Services Offering
 High profitability and revenue
 Established operating procedures
 Established processes & procedures
 Highly trained and motivated staff
 Level of in-house technical capabilities
 Existing centralized procurement model
 Supports long-term supplier relationship/commitment
 Existing sourcing approaches are encourage innovation
 Lock out potential innovative, agile vendors for the period of the contract
 Prime contractor is responsible for supply chain and for quality of sub-contractors
 High level of agency leverage and influence, translating to stronger negotiating position

Weaknesses
 Legal issues
 Legal Proceedings
 Oil spill controversies
 Severe cases of environmental issues
 Acquisitions by buying out competition
 Limited visibility on total procurement spends
 Declining revenues (only production group)
Opportunities
 New markets

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 New acquisitions
 Growing demand
 Deploy commodity plans
 Improved use of technology
 Increasing E&P Investments
 Partnering with key suppliers
 Improved contract management capabilities
 Supplier development at a local and regional level
 Supplier development activities especially from local SMEs
 Potential to collaborate with other agencies to increase economies of scale
 Potential to develop the market for goods/services with improved sustainability outcomes
Threats
 Declining oil prices
 Material obsolescence
 Increase in labor costs
 Economic slowdown
 External business risks
 Stringent regulations
 Environmental laws
 Economic instability
 Exchange rate fluctuations
 Large fluctuations in material cost
 Growing competition and lower profitability