Vertical integration in the oil industry: gaining competitive advantage
Vertical integration in the oil industry: gaining competitive advantage

Summary/Abstract: Vertical integration is one of the most widely used strategies throughout all industries in the world. As a part of today’s business environment, vertical integration has emerged as an extremely important component for the successful management of oil corporations. The extensive growth of manufacturing activities and the conceptual unification of key operating segments had contributed toward altering the current perception of strategic managers in the oil industry. The structure of this paper, both theoretical and practical, elaborates on the importance of vertical integration in the global oil industry. This paper refers specifically of the practical application of vertical integration in the oil industry in general by focusing on the leading oil corporations in the world. The aim of this paper is to present the process of the concept of vertical integration in the oil industry by analyzing primarily the key theories of vertical integration and elaborating the practical advantages which vertical integration generates for oil companies. The research is concentrated on the value chain analysis as a means of creating competitive advantage in the oil industry by using Super Major companies as a quantitative platform. The analysis results indicate that vertical integration can indeed be beneficial for oil companies and concludes the essential areas for achieving sustainable competitive advantage in the oil industry.

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