Rivalry among existing firms ConocoPhillips is one of 23 Integrated Oil and Gas companies.

It has the highest rate of sales growth among the top five oil companies, averaging 37.78% over the past 9 years. While 23 companies may seem like a lot of competition, it is in fact relatively small when compared to the size of the industry. It is important to note that ConocoPhillips’ sales are on improvement after the crises of 2008-2009, so is likely to increase in the future years. Its main integrated oil competitors are ChevronTexaco, ExxonMobil, and BP. These companies deal in both up upstream and downstream operations. Upstream operations involve exploration and production while downstream operations include refining and marketing. ConocoPhillips has other competitors, whose entire business is focused on either downstream or upstream operations. ConocoPhillips has a competitive advantage over these companies because being involved in both downstream and upstream operations allows the company to remain profitable when one operation delays. If prices or competition in one operation becomes unfavorable, the other operation can cover the losses. ConocoPhillips is the third largest integrated energy company in the United States and second largest refiner in the United States. Worldwide, ConocoPhillips has the fifth largest proved reserves and is the fourth largest refiner. Because of this, ConocoPhillips is one of the major players in the 23 Integrated Oil and Gas companies and applies more pressure on competing firms than it receives. Because the energy business has very high demand and there are relatively few competitors in the industry, existing firms do not engage in price wars. Instead, they compete on non-price dimensions. One of the major non-price dimensions firms compete on is the size and reach to which they can offer their products. In the Oil and Gas Industry, size is king. The larger your operations become, the

so their customers are ready to switch from one competitor to the other based on price. so their customers are ready to switch from one competitor to the other based on price. However. Keeping these two factors in check will ultimately lead to success in the oil and gas market. In a perfect case. As Americans. The price sensitivity of consumers is at an all time high. vertical integration. the sensitivity of buyers is one of unique case in the oil and gas field. Bargaining Power of Buyers When considering the bargaining power of buyers. The degree of differentiation for ConocoPhillips and its competitors is low. Due to low alternatives and low switching costs (Chevron/Texaco. etc.products of this refinement are undifferentiated. end. but has a competitive advantage over most of these companies due to their size.). The degree of differentiation for ConocoPhillips and its competitors is low. we must consider two important factors: price sensitivity and comparative bargaining power.higher probability your firm will prosper. Shell. consumers have an extreme dependence on oil and gas. The oil and . With the refinements of oil and gas. consumers are very dependent on current prices. Because existing firms do not engage in price wars. buyers are more sensitive when the product they are consuming is undifferentiated with little substitute. ConocoPhillips also offers products other than oil and gas. Price sensitivity is the extent on which ConocoPhillips cares to bargain on price and the bargaining power is how influential ConocoPhillips can be in forcing the price down. firms focus on increasing the size and reach to which they can offer their products and offer other products such as asphalts and chemicals. and scope of operations. ConocoPhillips has competitors in both the integrated and segmented energy industry. This is evident by the constant mergers and acquisitions that might be observed in this industry. ConocoPhillips makes no exception to this trend.

the number of buyers is reaching all time highs. Overall. The bargaining powers of buyers in the oil and gas field are limited. The price fluctuations that are experiencing day to day at the pump are a cost that consumers must pay in order to substitute or engage in daily life. This increased productivity will provide beneficial in investors in the end. Another option that consumers have is to take part in the upcoming trend of total electric or hybrid vehicles. meaning it operates in both the upstream and downstream portions of the industry. With such power being limited in the oil and gas industry. With little alternative to fossil fuels and the increasing of China’s economy. buyers have the ability to put pressure on the oil and gas industry to reduce their price per barrel down. and social pressure. This drop in consumption would reduce revenue and drive prices down. legislation and bills. Less dependence on gas would equal a consumption drop for oil and gas producers. A major supply concern for ConocoPhillips is the politics in oil producing countries. ConocoPhillps must maintain this fine line of price sensitivity and bargaining power. Bargaining power is the cost of one party not doing business with the other party. The high numbers of buyers in combination with ample resources is the driving force pushing these prices. Therefore. Bargaining Power of Suppliers Since ConocoPhillips is integrated oil and Gas Company. most of its suppliers are countries with oil reserves. One level of bargaining power that buyers have is legislation. With acts of Congress. any adjustment towards the positive that ConocoPhillips could make would enhance their overall productivity and output. A large portion of ConocoPhillips proved oil reserves come from foreign countries.gas industry’s lack of bargaining is a direct result of their dependence on this raw material. ConocoPhillips is highly affected by the prices of oil set by .

. ConocoPhillips is its own supplier for most of the major assets the company uses to explore. In total. refine.This leading edge could enhance the value of ConocoPhillips not only to itself. This investing increase could push ConocoPhillips to new heights. but also to its shareholders and investors. ConocoPhillips attempts hard to have open lines of communication with its suppliers to eliminate problems. if ConocoPhillips can maintain the balance between itself and its suppliers. and marketing. produce.organizations such as OPEC. it will have lower costs and a leading edge in the industry . ConocoPhillips seeks suppliers that can uphold its core values and provide the quality and service needed for the best cost.

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