When the oil age began, building a company around the product wasn’t nearly as difficult as it is today. Landowners could strike “black gold” while digging wells or hunting, and many oilfields were short distances from major population centres.
But that was a long time ago, and the world has changed since then. Now, highly specialized technologies and their operators travel to all corners of the earth (and the bottom of the sea) to extract petroleum and gas products, and the operational costs alone can dissuade growth and expansion. After all, if large global players are trimming staff and tightening belts, how can a growth strategy be justified? Is the effort of finding new markets worth the trouble?
The fact remains that the world needs that energy to function. Growing – or in some cases, simply retargeting – your business to take over new markets is possible once you have laid the groundwork, but for oil and gas companies, landing on a successful strategy takes some custom solutions. Here’s how you can go global (or stay competitive while you’re there) in 2020 and beyond.
Moving Toward Global Success
Canada used to be considered a paradise for oil and gas extractors, but in recent years that attitude has shifted. Other markets have opened up, leading to companies like Calgary’s longstanding TransCanada Corporation to become TC Energy and focus more on the United States and Mexico markets, or Encana changing its name to Ovintiv, uprooting its Canadian headquarters, and moving south to Texas.
These moves allow the companies to focus on strong markets (and a bigger consumer base) across the border, which at its core is just good business: Encana themselves say that “[t]his is not a political move; this is quite simply accessing the capital trends in the marketplace.”
What are the capital trends that inform your market placement? As other companies move around, there are niches left to be filled, and knowing where you will be strongest is a key component of international success.
As we discussed in our prior article about going global, it’s not enough to simply be present in a new location – branding and customer mindset is everything. Will you proudly identify as a Canadian company selling in another country, or are you a true global entity with an overarching global brand? The stories you tell at a local, national, and global level will all be different. Local brands should speak to the communities you work in and the people on whom your operations have a direct impact, while national ones have a defining characteristic tied in with the entire country’s identity. And global brands have to transcend all of that – to be truly global, your value and promise must speak to people of all cultures and backgrounds, giving something back to each in turn.
The Future of Energy
It’s no secret that oil is non-renewable, and will eventually reach the end of its usefulness – and other factors play in as well: public opinion, economic viability, ease of extraction, environmental concerns, and so on. At some definite point in the future, by choice or by necessity, it’s a reality we will face.
Thus, companies that anticipate this stand to do better in the long run. Diversification of assets and revenue sources, penetration into other markets, and more efficient operations are all key takeaways that successful global companies must implement in order to ride the turbulent waves ahead of us.
Embrace Relevance & Avoid Replacement
New technologies and trends are emerging all the time, and the general direction of the oil and gas industry is toward green energy sources and increased efficiency. Embracing this perspective will help you face forward and meet the challenges of tomorrow as they arise, and ensure you do not get left behind in a rapidly changing global marketplace. Here are some immediate tips:
1. Redefine what’s essential: Even though it may seem impossible, it’s a good idea to analyze your whole business model and operations and keep only what is needed. This dedication to leanness will serve you well both at home and abroad, and free up valuable resources for redistribution in areas that need it. Also, we know more than most that marketing budgets are often the first ones to get cut. But, research indicates that marketing is integral to surviving, especially during economic downturn, so do consider all your options before cutting marketing all together).
2. Embrace the digital age: This idea goes beyond the simple use of software and technology like cell phones and iPads. There are dozens of programs, services, and apps that will enable you to streamline your operations, make plans from your analytics and data, predict where your best performance will be, and ultimately, promote your business to the world. And, taking advantage of technology doesn’t have to be expensive or time consuming. Find the right partners to help you make the right decisions).
3. Plan for the long-term: Everyone has more confidence in a company that plans to be around through thick and thin. When you create a long-term plan and have it available to analyze, reference, and deploy, it shows people both within and outside of your organization that you’re taking that idea seriously and making progress toward your goals. It also means you can measure that progress more objectively, allowing for fine-tuning of the process along the way.
If one thing is for certain, it’s that the oil and gas industry is built on adaptation. Local companies and corporate giants alike must be proactive about making tough business decisions in order to stay competitive, stay focused, and be successful. Taking your business global in this economy is one thing, but keeping it there is entirely another. The key is to not go in to panic mode – know who you are, what you stand for, and the values on which you will not compromise. Look at your costs, think strategically, reassess the importance of what you’re doing, and be bold. And, when in doubt, reach out to a trusted source who’s done it before.