• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Purchasing & Supply Management - Case study on marathon oil.

Extracts from this document...


Purchasing & Supply Management Case Study Table of Content Summary of case study Review of problems and concerns Information on key players Problems answered in case study How the problems solved its self Global Supply Management References Case Study 14-2 centers around Bob Engel, the procurement supervisor for Marathon Oil Company, and whether or not in his capacity in procurement, he should take the initiative in submitting a plan to justify an additional International Purchasing Office based in the Sakhalin Island. The Sakhalin Island Project, a primitive piece of land with little infrastructure to work with and challenging climate located in Russia, will be home to Marathon's Oil for many years and needs facilities at the site location. How Marathon Oil came to this pressing dilemma, and the solving, by researching Marathon's roots and past global ventures brought them to the Sakhalin Island Project. In the early 1990s, Marathon Oil Corp. was a pioneer in the development of Russia's resource-rich offshore fields in the Sea of Okhotsk in the Far East. ...read more.


With the Sakhalin Island Project, and a long time commitment to see through several phases of the project they needed an onsite purchasing office, but at what price? Marathon's corporate offices are located in Houston, Texas. The late 1980's until the mid 1990's the company reorganization, mostly by downsizing and delegating duties to other onsite offices, knew that they would have to create additional manpower to oversee the project from the US or to locate an office in the Sakhalin Island. With millions of dollars invested and the prospect of millions in return, the elements associated with the island, climate is severe; arctic in the north, with heavy snowfalls and strong winds and in the south; churning seas create flooding, typhoons, and heavy rains. The geographical terrain is very mountainous, no roads, bridges, or utilities in the area of the designated offshore mark. By employing additional workers from other countries, it was still a real possibility the drilling would not start on time and this could cost many millions of dollars. So, should a procurement department supervisor submit his plan for an IPO and the research or justification for his decision? ...read more.


With this decision to pull out they swapped its 37.5 percent stake with a major partner in the consortium, Shell Oil in 2000. Marathon Oil walked away with 28 percent interest in Shell's UK operations, all Shell's interests in discoveries and prospects in this UK region as well as an eight-block area in the Gulf of Mexico, including the Ursa and Princess field discoveries. Shell Oil Ltd., with this swap, became a major shareholder in the Sakhalin Island Project. This Houston-based oil giant, pioneers in global management, with exploration and development soundly rooted international, has now embraced its place in Russia with only a few international oil majors involved in oil production in the country. This acquisition has already paid off, 35 percent of the oil supply exported to Europe and the 65 percent will stay in Russia delegated by their newly Russian based IPO. In conclusion, I would have voted for the Tokyo Office to oversee the project. Japan has a base facility and with this country in close proximity to the island and for legal residency, Japan had as much claim and or knowledge as Russia, the additional expense would be better suited with offshore and environmental issues. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our University Degree Management Studies section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related University Degree Management Studies essays

  1. Operations management case study - Primark

    Followed by distributing stock to the individual stores, whereby the prices are marked no more the 50% up. As you can see the transformation process is clearly linked to Meredith & Scott M, Shafer (1999) all these transformations help add value to the stock.

  2. A Case Study of IT Project Management

    The arrows in Figure 2 illustrate that there are positive interactions among Analysis, Design, Production and Acceptance so that the customers and developers can get effective feedbacks from each other. Advantages: The "b" Model suits small IT project with few developers.

  1. Total quality management - Federal express case study.

    Indiana has become one of the more active states in the Teamster's efforts to unionize FedEx but the union has filed 25 petitions nationwide(Francis, 1997). Thus far their efforts have failed. The United Auto Workers has also attempted to unionize FedEx off and on since the early 1990s (Francis, 1997).

  2. Jollibee case study

    Jollibee faced its first serious combat in 1980s, facing the McDonald's. However, the company, as a host player, initially secured its dominant position in the market with Five F's: flavor, fun, flexibility, family atmosphere, and friendliness(Bartlett & Connell, 1998). This philosophy fit with the habits of local customers and enabled the firm's success and expansion in Philippines.

  1. Maytag - Case Study

    resources dedicated to personal selling Secure dominance of growth markets Restructure a mature market by driving out competitors; this would require a much more aggressive promotional campaign, supported by a pricing strategy designed to make the market unattractive for competitors Increase usage by existing customers - for example by introducing

  2. Organisation, planning and control of operations Hank Kolb case study

    2 New Product & Processes Development: Marketing Engineering Operations - Quality - Capacity - Process - Inventory 3 ISO Series Introduction: - Purchasing - Design - Testing At the end of 12 weeks all functions of the company and the operation processes will be ready to manufacture a quality product efficiently.

  1. Analysis on Shell and AXXON

    Total liabilities and equity 100% 100% 100% 0% 0% 100% 100% 100% 0% 0% Table 1.2 Vertical Analyses (Income Statement and Balance Sheet) The next step is to applied vertical analysis. It can be seen from table 1.2(Section A) that the average cost of sale of Shell was higher than

  2. A Case Study on Infosys Technologies Ltd,

    to effectively integrate onsite and offshore technology services as to address the changing industry dynamics and client requirements.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work