Drilling for Sustainable Collaborative Solutions in the Offshore Drilling Industry: A Study on how a Drilling Contractor can Increase its Competitiveness Through Market Shaping and Co-Creation in the Offshore Drilling Industry

Simon Emil Gøbel & Jonathan Blangstrup Johansen

Student thesis: Master thesis

Abstract

The purpose of this thesis is to understand how market shaping through co-creation solutions can increase a drilling contractor’s competitiveness. The thesis applies and expands on fairly novel theories in conjunction with conventional market theories, as they enable an understanding of the complexity of markets, the dynamics of and between actors, and how opportunities for co-creation can be leveraged to drive competitiveness. To that understanding, Maersk Drilling, a market leader within the offshore drilling industry, will be applied as a case firm. In the researchers’ approach to uncover these phenomena, an abductive approach is utilized to move between theory, qualitative interviews with senior managers from Maersk Drilling and an external party, surveys, and secondary data on the industry. The thesis takes its point of departure in the New Oil Reality and how it demands cost-efficiency. It is found that the cyclical nature of the industry, as well as the path dependency, results in the levels of co-creation and innovation negatively correlating with the oil price. Consequently, collaborations are abandoned and formed in upturns and downturns, respectively, which causes a loss in value capture as actors submit to the paradox of co-creation. Increased competitiveness is found in the ability to sustain collaborative solutions and maintain a Pareto equilibrium, where the increased focus on digitalization enables the industry to adopt an industry-wide cooperative mindset. Further, the success of collaborative solutions is crucial for Maersk Drilling if it is to increase competitiveness. It is found that Maersk Drilling possesses excellent dynamic and co-creation capabilities; however, the business model in the industry does not strictly allow for collaborative paths, and thus, it is found that it should be included when formulating strategies, dynamic capabilities, and business models. Maersk Drilling must conduct market shaping at the system level by relying on more powerful players, at the market offer level by developing collaborations that align with all actors’ interests, and at the technology level by demonstrating success in new commercial setups. In the latter, it is found that Maersk Drilling must include data gathering in its innovation processes, as it diminishes information asymmetry in relationships and increases the likelihood of success in its new market offerings. Also, the four value processes in these relationships must be clearly defined. Conclusively, this thesis suggests a concrete strategic suggestion for how a drilling contractor can engage in sustainable collaborative setups through a revised compensation model that addresses individualistic behavior, fluctuations in the industry, and the antecedents for sustaining collaborative solutions.

EducationsMSc in International Marketing and Management, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2019
Number of pages202
SupervisorsKarin Tollin