Essay Example on Gran Tierra International Strategy

Introduction

Case analysis refers to the process of data collection by managers to determine the external and internal factors that influence an organization's business environment, customers, and capabilities. The situational analysis process enables managers to gain the knowledge required to identify possible market opportunities or challenges. It also enables an enterprise to identify the brand's weaknesses and strengths, depending on the products or services delivered.

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Consequently, situational analysis is an essential aspect of managerial thinking. It helps a manager define the nature of a problem and thus facilitate solutions to the problem. It also plays a significant role in defining new strategies and plans that contribute to an enterprise's progress. Managers also use situational analysis to determine the enterprise's current situation, thus defining new goals and strategies.

To fulfill a situation analysis, one has to review the company profile, conduct customer analysis, and review its environment. As already covered in the first part of this discussion, the initial stage of situational analysis revolves around customers' elaboration. Gran Tierra, situated in Calgary, Canada, was shaped in 2005 by three senior-level heads — a geologist, a designer, and a money master — with demonstrated histories in worldwide upstream oil and gas who united with three establishing pioneering chiefs with many years of wide global involvement with the upstream and oil administrations industry. This dominant group imagined a global oil and gas organization that could quickly distinguish and profit by underestimated and neglected open doors in the energy business.

The organization's origination came when a few South American nations were making political, lawful, and monetary changes in their public systems to pull in more unfamiliar speculation. The supervisory crew had broad involvement with this locale and knew about a few occasions to get to underestimated and immature resources.

With the help of a little network of Calgary based enterprising financial specialists, Gran Tierra had the option to pull in the underlying seed subsidizing that permitted the group to start seeking after these changes. Two ensuing financings from the more extensive monetary network in Canada, the United States, and Europe permitted Gran Tierra to catch a little arrangement of resources and tasks in Argentina and move into Colombia and Peru throughout the next year half.

Gran Tierra started as a global oil and gas organization with an underlying spotlight on select nations in South America. The point was to construct the organization through a two-stage way to deal with development. First, set up a base of creation by particular acquisitions; and second, accomplish future development through investigation and the advancement of new fields. This plan of action would be imitated in different zones as circumstances emerged.

Also, the organization didn't put resources into innovative work. All things being equal, the organization used previously existing advances and cycles inside the nations they wandered. The oil and gas industry was exceptionally serious. Contenders went from nearby organizations to more modest global autonomous organizations, for example, Pacific Rubiales, to significant worldwide oil and gas organizations, for example, BP and ConocoPhillips. The business players fundamentally contended to get to real estate licenses for land to investigate and create, secure agreements with administration organizations to lead work, and draw in exceptionally qualified faculty.

Gran Tierra additionally had a special methodology regarding how the association set up a presence in neighborhood purviews. The leader group tried employing whatever the nearby staff could be allowed and utilizing ostracizes for restricted or momentary specialized tasks to fill basic holes when neighborhood ability was inaccessible.

The neighborhood specialty units took responsibility for the everyday tasks of the organization. Simultaneously, staff in the Calgary office was liable for the general procedure, business advancement, specialized help, solidifying of working outcomes, and answering to stock trade controllers and investors (Gran Tierra was recorded on both the Canadian TSX and American NYSE stock trades).

Gran Tierra likewise made huge network ventures identified with wellbeing, schooling, and foundation. Nearby tasks that profited networks included keeping up streets and seepages, supporting horticulture and fishery activities, supporting clinical and dental detachments, supporting training activities by giving school materials and grants, and numerous different undertakings explicit to the requirements of the neighborhood networks close to every activity.

Performance of the Company

Gran Tierra had uncommon achievement and found the biggest and second-biggest light oil fields in Colombia in 20 years. As the remainder of the world started to get up to speed to how Colombia had become a more appealing nation in which to contribute, rivalry and costs expanded for land and concessions. The appeal of accessible land diminished over the long run, as the early contestants (counting Gran Tierra) had caught the best real estate.

Admittance to new quality resources to proceed with Gran Tierra's development direction became progressively troublesome, making it considerably more hard for the organization to keep developing. This pushed Gran Tierra to by and by taking a gander at new nations for additional development.

In 2006, Gran Tierra procured two investigation blocks in the Marañon bowl in northern Peru. Peru's topography here was like Colombia's, however with more prominent possibilities, and appeared to be the most regular move for the organization. The Argentinian office oversaw the Peruvian tasks until a neighborhood nation chief was employed in 2011 because of a nearby procurement. Situated in the Amazon, the Marañon bowl in Peru was an incredibly earth touchy and generally far off and unexplored territory home to indigenous populaces.

The situation made it trying to get grants for oil and gas investigation and creation exercises. On the off chance that Gran Tierra had a fruitful revelation, the potential gain potential for quite a little organization could be groundbreaking. Peru likewise had very great financial terms that could result when a revelation was made, however because of the broad natural danger and subsequent guideline, the leader group realized it could take a long time to procure the increases.

Every one of the business sectors Gran Tierra had entered in its initial years had been gainful to the organization's development in an unexpected way. Argentina was a viable base for more modest scope creation and Gran Tierra to use as its principle working base in South America. The organization had been fruitful in Colombia, which had been groundbreaking regarding discovering saves, developing creation rapidly, and producing income to support future development openings.

The Colombian market was currently important to SOEs, majors, and free thinkers the same. The dominant group understood that the brisk development that Gran Tierra had recently experienced in Colombia couldn't be effectively rehashed because of expanded rivalry for lower-quality land. Peru had tremendous, undiscovered oil and gas saves, yet development made certain to be moderate on account of the ecological sensitivities and long license measure.

Advantages of Gran Tierra

As a small multinational company, Gran Tierra stirred little attention when it started its operations in Argentina. The company's low profile enabled it to easily assimilate into the market and set up its operation with ease. Moreover, it also enabled the company to easily access undervalued assets as the government and other stakeholders underrated the startup. After setting up its base in Argentina, the company adopted a similar approach entering the Colombian market where they recorded high profits within three years. However, unlike Colombia, where success was tremendous, the Peruvian market had complications due to environmental protection issues concerned with oil and gas exploration within the Amazon areas.

Since the company needed a new market for growth, it had to consider moving forward hence the contemplation of Brazil as the next market. In August 2010, as an initial step to building up Brazilian activities, Gran Tierra obtained a 70 percent interest in four coastal squares in the Recôncavo bowl. The Recôncavo bowl was an adult region with regular creation that was gradually declining. A preferred position to Gran Tierra was that there was at that point a charitable foundation in the territory.

The squares furnished Gran Tierra with creation just as investigation potential gains could fill in as a solid starting stage for additional extension in Brazil. Likewise, there was the possibility to present North American innovation, for example, flat boring and multi-stage cracking incitement that was not utilized coastal in Brazil. There were solid likenesses between the Recôncavo bowl and bowls in North America, for example, Bakken and Eagle Ford, two where exercises were blasting because of the usage of these advances. While Gran Tierra didn't have the specialized mastery in-house to play out these undertakings, it expected these administrations could be moved to the Brazilian market through agreements with administration organizations.

The group's system was to invert declining creation by misusing innovation. By producing expanded action for existing fields, it would likewise add to the production of new openings in neighborhood networks. Notwithstanding, its prosperity, at last, depended on Petrobras conceding its admittance to the foundation and advertising the eventual outcomes. This was not seen as a significant obstruction, since the group expected that Petrobras would likewise discover these open doors alluring, particularly when the economy was all the while recuperating from the 2008 monetary accident and the plunge that the business had encountered because of the decrease in the normal cost of raw petroleum in 2008–2009.

In September 2011, Gran Tierra had two seaward ranches in shallow water — joining forces with the Norwegian SOE Statoil and Petrobras. Statoil was the administrator of one understanding, while Petrobras was the administrator of another. These were high-hazard open doors for Gran Tierra, with an expected one-in-six possibility of accomplishment. Yet, on the off chance that effective, the organization would be changed because of the possibilities' colossal capability.

Despite the great danger, these open doors were appealing, given that Brazilian seaward assets were viewed as among the most encouraging territories universally. Albeit shallow water tasks were tantamount to zones where the dominant group had the comparable seaward experience, Gran Tierra's ebb and flow portfolio were altogether coastal. The organization depended on the two's broad experience—a lot bigger coordinated (and halfway state-claimed) oil and gas organizations. Gran Tierra entered the seaward arrangements as a non-working accomplice with humble 10% and 15 percent working interests, separately, because of the significant expenses anticipated from seaward activities.

Brazilian Market

Brazil's difficulties became progressively apparent after the underlying ventures and inland activities moved slower than foreseen. The group started to detect that it had not completely considered the vulnerability of Petrobras' needs. The supervisory group had realized that Brazil was viewed as very relationship-situated in its way of dealing with work.