Chevron (Value Chain + Core Competencies) Essay

1420 Words Nov 16th, 2015 6 Pages
Table of Contents
Introduction 4
The Value Chain 4
Operations 5
Outbound logistics 5
Technology 6
Core Competencies 6
Conclusion 7
References 9

Chevron Corporation is multinational energy organization engaged in every facet of the oil, natural gas and thermal energy industries. Its downstream operations include selling products such as fuels, lubricants and petrochemicals to the global market. Chevron’s success is greatly driven by their vision ‘to be the global energy company most admired for its people, partnership and performance’ (Chevron Corporation, 2015), reflecting their initiative towards being socially responsible as well as their ambition towards exceeding expectations.

Despite growing concerns
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Chevron gains a competitive advantage in the crude oil and natural gas industry through its 3 core competencies: its upstream operations, downstream operations and its management of global investments, subsidiaries and affiliates.

The upstream operations consist of developing and producing crude oil; processing, liquifieing and transporting the crude oil throughout international oil export pipelines (Trefis Team, 2014). Chevron’s abilty to make succssful strategic decisions in the upstream segment has been the critical factor in creating profit/value for the company over the long run, developing the company into the global leader of exploration and production its known for today. Under the VRIN framework, Chevron holds inimitability of its upstream operations through its development of state of the art technology; steam flooding, ‘smart oilfields’ and fracing. This technological leadership and innovation creates a sustainable competitive advantage, as competitors will find it difficult to imitate the technology without the appropriate human and financial capital, as well as Chevron’s existing business operations.

Chevron’s downstream operations include its manufacturing, product portfoilio, chemicals and transportation processes (Chevron, 2015). It’s primary strength in the downstream segment has been its ability to refine crude oil into petroleum; marketing it to the motor vehicle, rail car, petrochemical and industrial

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