The case of seadrill highlights the challenge

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Unformatted text preview: nslates into cost savings and more revenues. Context for Firm Strategy and Rivalry Statoil’s dominance in the Norwegian oil and gas market has put the company in a unique position to develop suppliers and encourage innovation. On its own, Statoil is not recognized as an innovation leader in the industry. As is the case with national R&D outcomes, Statoil’s results from R&D spending are mediocre. Statoil spends 0.31% of sales on R&D, while Exxon Mobil spends 0.21%. In their 10 ­K, ExxonMobil reports more than 11,000 patents, while Statoil’s filing with the SEC contains no mention of patents, an The oil & gas cluster in Norway 22 indication that their patenting output is not compelling enough to share with investors. ExxonMobil has 749 patents filed with the Norwegian Industrial Property Website, while Statoil only has 677, even though Statoil’s 2010 revenues in Norway were 14 times more ($84 billion vs. $6 billion) (NIPO and Capital IQ, 2012). Statoil recognizes in their 20 ­F filed with the SEC that “much of our technology development is carried out in close cooperation with national and international universities, research institutions, and suppliers. Our performance is strongly dependent on our supplier’s performance. We work closely with our suppliers.” Statoil is a demanding customer that drives innovation from suppliers. With $24 billion spent in procurement and 12,000 suppliers, Statoil has created a best in class supplier mentoring program. It uses “Statoil Technology Invest” to take equity stakes in 20 oil and gas technology or renewable companies. It has the LOOP Program, which gives funding, project support, and pilot testing to suppliers for specific technology concep...
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This document was uploaded on 03/30/2014.

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