This research involved the conduct of a strategy analysis on Texaco Inc. An industry analysis if followed by a company analysis.
The industry analysis is presented in the contexts of an industry description and a review of the structure of the industry. A Porter's Five-Forces analysis is included as an appendix to support the review of the industry structure.
Texaco competes in the integrated petroleum industry (Mitkowski, 1994, p. 401). Industry sales in 1994 were $600 billion. Sales are projected at $645 billion in 1995, and are expected to swell to $800 billion by 1998. The major product base of the industry is comprised of refined petroleum products for use in motor vehicles, industry, and home heating. Petrochemical products such as chemicals, plastics, solvents, detergents, and fertilizers also are important industry products. The industry serves both consumers and industrial customers. The total industry market is projected to growth by 33 percent from 1994 through 1998.
The strongest influences on industry profitability are competition between the major firms operating within the industry, and the general economic environment within the world's industrial countries. The economic environment within the industrial countries determines to a great extent the intensity of demand for the products of the integrated petroleum industry. During period of stable or slackening demand, the competition among the major firms in the industry has the greatest influence on industry profitability. During periods of high demand for the industry's products, crude oil suppliers have a potential to affect industry profitability to a significant extent.
Macroeconomic factors of the greatest significance to the integrate petroleum industry are GNP trends, interest rates, inflation rates, and energy availability and cost. In a technological context, the most significant factor for the industry is the attainment of productivity im...