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Chapter 5 Service comparisons between COSL and competitors

5.1 SWOT approach

5.1.3 SWOT matrix approach

Internationalized talents deficient

Nowadays, a dozen of subsidiaries and bases of COSL are erected successively, the management of these companies needs personnel with internationalized views and modern enterprise concept and experience, but this kind of staff is insufficient. For example, the author is in Mexico, we are going to bid the coming long-term cement and drilling fluids tender of Pemex, I find that we are lacking of experience and resource, if we have some related internationalized talents in Carmen, the situation will be better.

Main revenue is from the mother company

CNOOC is the largest offshore oil company in China, which provides more than 65%

revenue each year, revenue structure is excessively single. If the mother company was in crisis, it must extremely influence the income.

Services software deficient

In the past, COSL is concerned about the hard software ignoring the development of software. Some is used to be judged based on rich experience of engineers whereas competitors develop a lot of software which reform the oilfield services. For example, COSL doesn’t have applied hydraulic software to conduct operations, presently.

5.1.3 SWOT matrix approach

Based on the above analysis, using SWOT analysis, the author establishes a matrix indicating in Table 9. Some internal and external factors are listed in the table, then by using a matrix, the internal and external factors are grouped in order to analyze and conclude solutions.

Table 9 SWOT analysis

talents. opportunities and treats of COSL, which definitely defines the problems what COSL faces, the chance what COSL confront and weaknesses what COSL has. Also, the author proposes the suggestion how to solve these problems based on Table 9.

Chapter6 Conclusion

By knowing about the development of COSL and analyzing the history and industry pattern, the thesis vividly describes the difference between COSL and the three main counterparts. Recently, there are also some problems although COSL makes great progress, for example, the insufficient of core technologies and top talents. COSL can learn a lot from the development, history and experience of giants as the following.

Firstly, giants establishes advanced laboratories and research centers in the world, which can support global operations, while if we look back COSL, the research bases are totally in mainland China. Limited the distance and time zones, the research centers in China can’t support the world-wide operations in 24 hours. Further, the research cost of COSL is still low comparing with its counterparts and the total patents are 170. Thus, COSL should establish overseas research centers to serve local market and invest more money in researches. Also, it is better to cooperate with universities and competitors to narrow the gap.

Secondly, the weight of revenue of COSL is mainly from China while the revenue of giants distributes in continents, Figure 16 and Figure 17 has explicitly indicated the huge difference, thus, it is important for COSL to persist to internationalized strategy and positively to develop and increase overseas market share. Also, COSL should rely on the assistance of its mother company-CNOOC and develop the business to other countries, this is a unique advantages.

Thirdly, merging and re-organization is the successful factors based on the development histories of the three giants. Making an acquisition is a good example for COSL, but the steps are still slow. Relaying on abundant funds and the support of CNOOC, COSL should continue to buy good quality assets to enhance its capabilities.

Fourthly, integration is also important, the three big companies earn large amounts of money each year due to integration business while COSL just provide limited integration services and the main client is CNOOC. Therefore, the author believes that the largest difference between COSL and giants is that COSL doesn’t manage core technologies, for example, as for drilling fluids service, the core technology is the material, which directly decides the success of the well. If the quality of materials doesn’t meet the requirements or is terrible, it is very hard to win integration contract from clients. Consequently, COSL should develop its own core technology.

Fifthly, “cost leading” is a good strategy. However, If look around the giants salary to employees, it is not difficult to draw a conclusion that the payment of employees in COSL is extremely low. Thus, to keep the competiveness and save top talents, COSL should increase the expenditure of human resource.

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