COMPETITIVE STRATEGIES IN THE CONTEXT OF THE OIL INDUSTRY

Formally or informally, rationally or intuitively, oil companies are forced to adopt advance practices in order to compete equally with other companies on the market. The pressure to remain competitive in an environment with great price variation has stimulated companies’ in the oil industry to ignore the conventional methods in order to explore new ways to overcome its rivals on the market. Competitive strategies are widely used throughout entire oil industry and whether one will be successful depends on the economic value one is ready to produce to gain competitive edge over its rivals. The effect of competitive strategies is relatively different for each industry and its essence is often visible in the way how managers cope with the uprising trends on the market. Thus understanding the basic structure of the oil industry and its revolving nature is de facto a fundamental step in formulating the competitive strategy. The aim of this paper is to discuss the importance of competitive strategies in the context of the oil industry, by identifying those strategies which are crucial for oil companies’ success. The primary part of the research is aimed toward reviewing the theoretical framework of the concept ofstrategy. The secondary part is focused on importance of competitive strategies for the oil industry and on identifying the type of competitive strategies oil companies need to apply specifically in the context of the oil industry by identifying the potential sources of competitive advantage. According to the author’s findings, competitive strategies are in fact an essential component of modern oil business and without clear strategic context oil companies cannot create a value to sustain its market power.

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