Halliburton is a world wide corporation in the oil fields operating in more than 70 countries across the world. It's international network of subsidiaries, brands, divisions, and affiliates are close to 300. The head quarters of Halliburton Corporation are located at Houston, Texas in the United States of America where it's Chief Executive Officer; David J. Lesar resides and works with the mandate to focus and promote growth and development of the company's wing of eastern Hemisphere. The Energy Services Group (ESG) forms the Halliburton major business segment across the globe. However, the ESG is responsible for petroleum and natural gas provision and technical services in the same field to facilitate exploration and production. The company announced its break up with a subsidiary company of KBR which over 44 years had acted as its construction, engineering and contracting company forming a major component in the refineries, pipelines, chemical plants and oil fields in the energy industry (One Word Trust 2008, n pg).
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The company serves upstream gas and oil industry across the world in a complete life cycle of the reservoir. This ranges from locations of hydrocarbons to wells constructions and completions, management of geographical data to drilling and formation valuation through optimization of production across the world. Energy services forms the major components of the company's historical and fundamental pillar of business sustenance in the market. They include practices like digital and consulting solutions, drilling and formation assessment, fluid systems and production quantity optimization. Halliburton forms one of the largest and most profitable companies in the energy industry constituted by wide market diversification and the high prices of energy products and services across the international market (Global Forex Trading 2010, n pg).
Its major competitors are Schlumberger and the Weatherford followed by others like the Baker Hughes and Tesco Corporation. The company suffered huge losses between 2002 and 2004 of approximated to be over US $ 900 million as a consequence of high costs of asbestos - related costs and staggering losses which were witnessed in Barracuda Caratinga FPSO construction firm which was carried out at Rio - de Janeiro. Its subsidiary KBR continued to be in the 11 bracket of bankruptcy until the first quarter of 2005 when the company moved in profitability revenues and production levels. Despite this increased revenue base for Halliburton as a result of many contracts in the middle East Asian countries, its bottom line has however continue to suffer greatly and struggling to regain profitable trends. However, due to its subsidiary company KBR continued non performance trends, actions and steps to sell it through spin - off or expose it to initial public offer yield positive results which witnessed the company as an independent entity listed company in 2007 (Salvatore 2007, p, 56).
Halliburton Company enjoyed special treatments from the United States of America government especially during the Iraq war. This is attributed to its close ties with the Vice - President Cheney who was the Chief Executive Officer from 1995 to 2000. This went on to an extent that a civil servant (Bunnatine Greenhouse) with its contracting wing complained to the Federal Bureau of Investigation and the pentagon that Halliburton has been receiving special treatments in Iraq unlawfully. Halliburton began its processes of unloading its biggest subsidiary KBR in November 2006 which completed the whole process by February 2007 witnessing total independence and listed as a company on its own rather than a subsidiary of Halliburton. The company has been leading for more than 75 years in the energy industry as the best corporation with excellent man power and expertise in equipment manufacture of drilling, completion and continuance programs. In addition the company has specialists who are in a position and have expertise of tailoring jobs to meet specific customer requirements (The Economist 2009, n pg).
The company follows a distinctive strategy which ensures that it maintains a competitive business advantage in the market. The company's objectives involves the formation of a balanced assortment of products and services that is aided by well developed international infrastructure which is boosted by technological advancements and innovations through differentiation of the company with the help of a well integrated digital strategy. Their aim also focuses of achievement of operational international excellence accompanied with cost reduction with creation of real value from every activity they engage. Through their maintained dynamic work force, they strive to be regarded as the best preferred employer in the market for purposes of attracting, developing and retaining the world's best talents and potentials. Lastly, it's the company's ethical and business principles to maintain the best values in safety, health, ecological and environmental performances as stipulated by the law (Thomson Reuters 2010, n pg).
Always on Time
Marked to Standard
The seasonality experienced in business cycle and the adverse weather effects have not affected the company operations due to its advantageous geographical locations which plays a fundamental role in the mitigation efforts adopted by the company. In addition the company has more than 57,000 employees across the world as per its annual reports in 2008. The company's activities are driven by urge to have more reservoir activities increasing service intensity services through thorough process aimed at accelerating investment in human capital and infrastructural growth in the international market. This is achieved through a well integrated strategy exploiting available technology in a well formulated strategy which has continued to set the company aside in the global market (Jean & Truett 1998, p, 76).
Competition in the market
To capture the wide international market, Halliburton has gone beyond the market competition in all its markets across the world. In the international oil fields, the company is considered as the only one with the capacity to perform a turn of key performance drilling and completion of any project from start to end. This gives them a higher comparative advantage in production, drilling and marketing thereby commanding a larger international market share and market area size. Despite stiff competition from other major gas and oil companies in the international front, Halliburton has developed a wide capability to deliver services with the requirements stipulated in good time and proper conditions. Another strategy that the company exploits is the ability of command in the market through the massive and vast resources it enjoys, with the rapid increase of oil prices per barrel, small and medium sized companies are gradually exiting the market while large companies like Halliburton are able to meet the market requirements due to large scale production (Brooker 2007, p, 34).
The strategic positioning of the company in all the countries it operates with government authorities offers an opportunity for the company to exploit its potentials fully. This eases the environment of doing business and the managers besides other employees have sufficient time to concentrate on other productive and innovative activities. The large capital base of Halliburton gives them an opportunity to persevere hard economic times like global recessions where they opt to utilize their profits in any expansion and operating expenses when the financial crunch and money supply in economies is minimal as shown by the data below.
Source: Thomson Reuters 2010.
During seasonality in the global market, credit availability becomes a challenge for many companies without a strong capital base especially in the highly volatile energy industry unlike Halliburton which mitigates these challenges from the wide capital base it enjoys. Lastly diversification of services in the market offers Halliburton Company a market advantage since it can provide drilling, production and completion services all by itself enjoying large scale economies (Salvatore 2007, p, 69).
Decision making process
The company is managed by 10 to 14 directors who are elected during the company's annual general meeting. The board of directors composes of not more than two members who are company employees to act as directors, whereas two thirds of the directors must be independent parties. There is also a corporate and a nominated governing committee which considers board nominations and together with the board of directors is responsible for decision making process of the company and its subsidiaries. The Halliburton Company has been adversely affected in financial terms due to their unethical decisions they implement and mostly in the social responsibility field. Due to these unethical practices in the decision making process of the company, many corporate entities and businesses have distanced themselves and are closely watching the company greatly reducing their activity level which threatens their downfall in the international market. The management of Halliburton resolved to relocate their headquarters from Houston in United States to Dubai United Arab Emirates in 2007. This move received mixed reactions from across American legislatures who blamed the Halliburton management team for incompetency and greed in the decision making process as full of selfishness and corrupt practices (Brooker 2007, p, 57).
Marketing in Halliburton
The marketing aspect in Halliburton is a priority whether in the headquarters or in any of their subsidiaries. The stiff competition that has emerged in the last decade in the oil, energy and gas industry has witnessed the dynamisms in the market approach of the company. They have adopted an all inclusive program to capture the wide competitive market. To organize themselves strategically in the market, the company performs drilling to completion of any project locking out any competitor in the projects they undertake. Their diversification is another market strategy and approach adapted by the company in their quest to be the market leaders in drilling and energy sector industry for a large market area size not only in America but also across the international market (Jean & Truett 1998, p, 84).
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To enhance performance of the company, the subsidiaries are granted the autonomy to perform all the market operations in their respective jurisdictions guided by profit optimization without interference from any quota including the company headquarters. This is demonstrated by their marketing strategy in Egypt where the company works independently in relation to marketing and production of products and services. The company's strategic positions in networking of partnership with key players in the market have greatly boosted the company's marketing strategy. The company has received many and fundamental tenders in drilling and fueling fields by prominent players and government agencies across the world, a fact that has boosted its credibility and offered it a market advantage over other companies in the same industry (Salvatore 2007, p, 75).
Costs and production
The international market competition has recently intensified due to emergence and entry of new companies in the same industry accompanied by increasing costs of production and acquisition of raw materials. This has witnessed the Halliburton implementing cost cutting measures while maximizing their production to maintain or increase the activity levels in operations which consequently increases the revenue at reduced costs. The company has also implemented cost cutting measures through adoption of new and advanced technology to maximize output at all levels. This move has witnessed the company reducing cost be 11 per cent while increasing its revenue by 7 per cent annually with the greatest and significant action in 2007 when Halliburton was contracted by the United States government to assist in supply for its Iraq soldiers (One Word Trust 2008, n pg).
The company as stated earlier has its locational headquarters at Houston in the United States of America. However, the management in Houston has passed a suggestion to re - locate the head office from Houston to Dubai, United Arab Emirates. These decisions by the management team has attracted a world wide criticism especially from the united states of America congress which have termed it as disrespect to the very country that helped and played a vital responsibility to assist in its growth.