Case Study Sample Solution

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Oil Transportation Ltd. – PESTEL analysis

Political trends Economic trends

• Environmental and transport guidelines/ • Oil & gas sector cyclical
legislation are stricter • Sector driven by global supply and demand
• Demand for oil & gas in the future stable or declining
as economy moves to alternative energy sources

Social trends Technological trends

• Customers demand quick response and • GPS tracking
turnaround time • Automated driving technology
• Social concerns around oil transportation safety • Load optimization technology

Environmental trends Legal trends

• Truck emission standards are becoming more • Hours of Services (HOS) regulations for
stringent commercial motor vehicle

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Oil Transportation Ltd. – Porter’s five forces

Potential entrants/ • Barriers to entry include forging sustainable

barriers to entry relationships within the oil industry and the
cost of buying and maintaining trucks and
trailers
• There are numerous trucking
firms in the area serving the
oil industry

Suppliers and their Buyers and their

bargaining power bargaining power

Rivalry/competition • Firms will have some limited bargaining

• Larger firms buying new power particularly if customers need quick
in the industry
trucks every year may turnaround / delivery or have unique
have some bargaining requirements (e.g. certain truck / trailer
power with truck configurations)
dealerships

Threat of • There are few substitutes although

substitutes rail may be used in some limited
instances

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Oil Transportation Ltd. – Competitive advantage

Sources of competitive advantage

Oil Transport Ltd. Competitors

• Solid reputation for getting the job done right • Similar to Oil Transportation Ltd.
• Expert in oil field services industry requirements (including • However, many of OTL’s competitors rely heavily on
permits, safety, etc.) subcontractors. This limits their ability to respond to
• 24/7 customer service customer needs as quickly as OTL.

• Location and ability to get trucks on the road quickly

• Mix of salaried and contract workers (providing flexibility
when times are busy/slow)
• Management style and expertise is a disadvantage

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Oil Transportation Ltd. – Risks and mitigation

Risk Mitigation strategy

The business continues to suffer from Recruit a bookkeeper/accountant with

poor financial management. financial management skills or ensure
business obtains necessary professional
advice on a regular basis.

No clear exit strategy for owner/

operator. Scott wants to sell the
Develop a clear exit strategy and/or
business but will not obtain a valuation.
succession plan.
It is unclear whether his son Doug is
willing/ able to take over the business.

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Oil Transportation Ltd. – SWOT summary
Strengths
• Solid reputation for
getting job done
• Expert in oil field
requirements
• 24/7 customer service
• Location and ability to
get truck on road quickly
• Mix of salaried and
contract workers
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Weaknesses Opportunities
• Management style and • Booming oil & gas sector
expertise • GPS tracking and satellite
communications
• Load optimization
technology
• Customer demands for
quick response times
increasing
Threats
• Numerous trucking firms
in the local area
competing for the same
business
• Reduced industrial
activities decreases
demand for trucking
services