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1. Presented by : Divya Mishra

2. Agenda

3. General Information The history of Eni and its companies is a long one, and is closely related to the development of Italy Eni operates in the oil and gas, electricity generation and sale, petrochemicals, oilfield services construction and engineering industries. In these businesses it has a strong edge and leading international market position. Eni is active in 77 countries with a staff of about 78,400 employees. OPERATIONS AND STRATEGIES: Exploration & production Gas & power Refining & marketing Engineering & construction http://www.eni.com/en_IT/company/operations-strategies/exploration-production/exploration-production.shtml

4. 1. What is Eni’s corporate strategy? Vertical integration strategy-exploration and production upstream and refining and distribution downstream. Other activities include: Building pipelines Expansion of other energy sources Emphasis on employee training and personnel activities.

5. Vertical Integration Advantages: Reduce transportation costs Improve supply chain Opportunities to differentiate Capture upstream or downstream profits Increase entry barriers Gain access to downstream distribution channels Invest in specialized assets lead to expansion of core competencies

6. Vertical Integration Disadvantages: Capacity balancing issues Higher costs due to low efficiencies Decreased flexibility Developing new core competencies may comprise existing competencies Increased bureaucratic costs.

7. Eni’s Vertical Integration Strategy Eni’s advantage: Gas supply from many different countries Good leverage power Attractive structures and terms Access to large set of transportation and storage sets Flexibility to vary the gas they produce and sell The CEO of Eni regarded the vertical integration strategy as its key competitive advantage in the European gas market.

8. 2. How well aligned is Eni’s strategy with the characteristics, requirements, resources and capabilities of its industry environment

9. 3. Looking ahead over Eni’s next 4‐year planning period (2010‐3), what are the main issues that face the company? What is the direction for the future ? VIDEO http://eni.iwebcasting.it/2010-2013-strategy/

10. What are the problem we have to face? A. It most immediate problem was the global recession that had reduce the demand for oil, gas and power and had resulted I sharp reductions in energy prices. B. The greatest uncertainties related to Eni’s future over the long term. Oil and gas reserves were becoming increasingly difficult to find. C. The threats to Eni’s vertically integrated natural gas strategy were not all that the upstream level. D. The growing problem of global warming was an emerging threat to the oil and gas industry.

12. 4. Should Scaroni initiate organizational changes with regard to organizational structure, management systems, and corporate culture? No, Scaroni vowed to follow the same strategy set in motion by the previous CEO, Mincato. In order to continue the growth achieved by Eni in the last 5 years, Scaroni realizes he needs to draws upon Eni’s unique strengths such as doing business with countries viewed as unstable. Eni needs to portray a stable ally. He is quoted as saying, “At Eni the strategy is solid and good. If it isn’t broken, don’t fix it.” Eni is hiring more foreign officers and employees, also adapt more cultural awareness. Communication in the company also is vertical as is their strategy. http://www.eni.com/en_IT/company/our-people/our-people.shtml

13. 5. Bridge or relate what you learnt in class to the reality Do you agree with what the firm’s current conduct? Is it consistent with your analysis? Any recommendation for the firm’s top managers?

16. Eni seek to establish itself as a major supplier of electrical power.

17. Invest in renewable energy sources (e.g. wind power).

18. Eni divest its chemicals business.

19. The companies going global should look into there organizational structure.

20. Adapt more cultural awareness.

21. Cultural diversification to understand the trends in different countries.

22. Communications at all the level is important.

24. THANKS