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Escaping the Doghouse: Winning in Commoditized Markets

Commoditization is often seen as the kiss of death for an industry. Boding ominously for profit margins, it brings slowing growth, falling prices, and increasing competition. In recent years, the process of commoditization has accelerated. Company life cycles have halved in the past 20 years—markets mature faster and incumbents are more and more at risk of commoditization.

But does commoditization have to be bad for every company? While many fail to navigate this commoditization process effectively, others are able exploit it and flourish. 

These are the best strategies to address increasing commoditization:

  • Assess the current basis and project the future basis for advantage.
  • Identify winning business models.
  • Consider resegmenting by business model.
A BCG analysis shows that a holistic approach to risk management is crucial for value creation and value protection. From a holistic view, take strategic risk decisions; in optimal case consider risk-return trade-offs. Manage risks operationally every day and thus protect your company's value. Create transparency on all risks in asset portfolio and in current business activity. And decide on risk activities to change in risk profile portfolio.
A holistic approach to risk management is crucial for value creation and value protection.

Digital Opportunities for the Oil and Gas Industry

BCG's Sylvain Santamarta explains how digital can disrupt the entire oil and gas supply chain—bringing strategic opportunities to upstream, refining, retail, and trading.

How to Thrive in an Era of Volatile Oil Prices

Volatile oil prices present challenges and opportunities for producers, energy service companies, and processing industries.

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Decommissioning Operations in Oil & Gas

Decommissioning Collaboration: Reflections from Nexstep’s First Year

Decommissioning Collaboration: Reflections from Nexstep’s First Year

Graeme Ferguson of Decom Energy on Lessons from Dunlin

The Global Urgency of Decommissioning in the Oil & Gas Industry

Jacqueline Vaessen, general manager of Nexstep, discusses the Dutch platform's goals and priorities in decommissioning.

Driving Value in Upstream Support Functions

Upstream support functions must excel in a wide range of areas, including supply chain management, logistics, asset protection, IT, and partner relationships.

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Exploration and Production Supplier Contracts: Where Does All the Value Go?

Eleven sources of value leakage between E&P companies and suppliers.

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Postmerger Integration for Energy Players

Roughly half of all mergers and acquisitions fail to create shareholder value, largely because companies pay insufficient attention to postmerger integration (PMI). Successful PMI in the energy sector maximizes cost synergies, organizes teams to mirror the value drivers of the merger, and designs a workable organization structure for the combined company.

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12 Exploration and Production Integration Lessons

Successful E&P integration efforts follow 12 critical rules about people engagement, leadership, and synergy realization.

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Three Steps Power Companies Must Take to Adapt to a Changing Industry

BCG's Sabine Stock discusses what power generators must do to adjust to the wider transformation: become more focused on cost cutting; pay more attention to flexibility, particularly when it comes to staffing; and apply new ways of approaching maintenance routines.

Fixing Europe’s Power Generation Market

The energy policies of Europe have created a seriously flawed power market that’s driving companies to rethink their business models and portfolios.

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Eight Steps to Operational Excellence for Transmission Companies

Top-performing energy network operators employ eight best practices to improve both efficiency and effectiveness.

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A Roadmap for Mitigating Greenhouse Gases

In order to mitigate greenhouse gas emissions, companies need detailed roadmaps that fit their needs and context—and that keep them focused on long-term goals.

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Next Section: Solutions
Answers for Tomorrow’s Energy Market
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