Strategy Formulation and Implementation

Name: - Paras Nangia Date: - 13th August 2021

Roll No: - 20PGDMHR25
Porters Value Chain

Oil and Gas Industry Value Chain

The three facets of the value chain are:

Upstream – Exploration and Production
Midstream – Transportation and Storage
Downstream – Refining and Retail Markets
Companies in the upstream sector are also called “Exploration and Production (E&P) companies”. These companies are primarily
involved in identifying and assessing potential Oil & Gas producing blocks, drilling exploratory wells, devising Field
Development Plans (FDPs) & developing infrastructure in economically viable oil fields to produce commercial quantities of
hydrocarbon.
Companies in the midstream sector are typically involved in transportation of hydrocarbon. The various modes of transportation
include pipelines, maritime, rail and road transportation, depending on the type of product being transported.
Companies in the downstream sector are involved in the process of refining, marketing & selling. These companies transform &
refine crude oil into a variety of derivative products such as liquefied petroleum gas, gasoline, jet fuel, diesel oil, other fuel oils
etc., which are in turn, sold to different end-users.
 Solar Industry Value Chain

From the manufacture of crystalline silicon or thin films to the building and maintenance of PV solar systems, the
solar business encompasses a wide range of operations. The photovoltaic value chain is highly complex, covering all
of the processes required to construct a utility-scale PV solar system. Raw silicon has to be produced, purified, cut
into wafers, doped, cleaned, and coated before it can be used.

The cells generated in this way are then assembled into modules, arrays, and eventually connected to electrical
components to form a complete system.

The photovoltaics value chain, like any other industry, may be broken down into a variety of entities (suppliers,
operators, and consulting organisations) that carry out the various value chain operations.

Financial, legal, consulting, and testing services are all available across the value chain since they may be needed at
any time. Staff education and training, publishing, and public relations efforts to promote solar energy, as well as
government relations services to get licences, subsidies, and support money, can all be included. There are a number
of services that are required at various levels of the value chain:

● Wholesale distribution
● Project planning and development
● Design, engineering, and construction
● Operations and Maintenance services

All of these activities might be carried out by numerous firms that have contractual agreements with one another in
an ideal economic system. Companies, on the other hand, want to optimise their cost structures through decreasing
transaction costs in practise.

It might be a pure player in the solar energy sector, or it can be more diversified, such as big fossil fuel companies
that enter the renewable energy sector as a separate economic activity, depending on the firm's age and various
competitive situations.

Diversification may also be achieved by combining multiple renewable energy sectors, such as solar and wind.
Another trade-off that companies must make is between different levels of vertical integration. Despite the fact that
there are several highly specialised firms in both the upstream and downstream industries, most enterprises are now
vertically integrated.