Subject category:
Strategy and General Management
Published by:
Harvard Business Publishing
Version: 9 August 1999
Length: 19 pages
Data source: Field research
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Abstract
R&B Falcon is the world''s leading offshore drilling contractor. Amid surging exploration budgets and increasing deepwater drilling activity, the company makes huge investments in several new state-of-the art $300 million ultra-deepwater drilling rigs. As dayrates and utilization fall for shallow-water rigs, the company must decide whether to idle capacity to defend pricing. It must also decide whether to scale back its commitment to deepwater rig construction projects. Finally, the firm wrestles with whether to pursue "turnkey" drilling contracts, in which it would provide a complete bundle of drilling services.; Illustrates the differences between concentrated and fragmented markets. Explores industry evolution caused by both technological change and new marketing practices.
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Abstract
R&B Falcon is the world''s leading offshore drilling contractor. Amid surging exploration budgets and increasing deepwater drilling activity, the company makes huge investments in several new state-of-the art $300 million ultra-deepwater drilling rigs. As dayrates and utilization fall for shallow-water rigs, the company must decide whether to idle capacity to defend pricing. It must also decide whether to scale back its commitment to deepwater rig construction projects. Finally, the firm wrestles with whether to pursue "turnkey" drilling contracts, in which it would provide a complete bundle of drilling services.; Illustrates the differences between concentrated and fragmented markets. Explores industry evolution caused by both technological change and new marketing practices.